Bank of Canada inflation target won’t change in 2026 mandate review: Macklem
Summarize this article with:
Article contentThe head of the Bank of Canada is looking to a new frontier for digital currencies but he says one thing that won’t be changing is the central bank’s two per cent inflation target.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentGovernor Tiff Macklem spoke to a business crowd in Montreal on Tuesday where he reflected in prepared remarks on “a pivotal year for the global economy.”Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentUnited States’ tariffs and protectionist trade policy bumped up against other structural economic changes in 2025 like the rise of artificial intelligence and the impacts of climate change.Article contentArticle contentMacklem said the economy will likely continue its restructuring in 2026 — the same year the Bank of Canada’s mandate from the federal government is up for renewal.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentWhile he said the central bank is taking a “fresh look” at how it conducts monetary policy, Macklem was unwavering in his commitment to the bank’s flexible inflation target, which he said proved its mettle when costs soared during the post-pandemic recovery.Article content“Flexible inflation targeting has proven to be more successful and more durable than anything that came before,” Macklem said.Article content“Faced with a more shock-prone world, the anchor provided by the two per cent target looks more important than ever.”Article contentMacklem also touched in his remarks on the central bank’s upcoming roles regulating stablecoins and other looming updates to payments and banking in Canada.Article contentIn draft legislation from last month’s federal budget, Ottawa outlined a framework for stablecoins — a form of cryptocurrency backed by another asset like an existing currency. The value of these cryptocurrencies is typically more stable than fluctuating assets like Bitcoin, which tend to act as an investment vehicle rather than something used to pay for goods and services.Article contentArticle contentMacklem said it’s not clear how much of a role stablecoins will play in the future of money. But he said the Bank of Canada will be regulating these emerging digital currencies so Canadians can use them safely and confidently alongside physical cash.Article content“The technology is evolving rapidly and the regulatory framework will need to evolve to keep pace with the changing landscape,” he said.Article contentMacklem said stablecoins will need to be pegged at a one-to-one ratio to a central bank currency and backed by high-quality liquid assets — treasury bonds are one possible example — so it can always be converted to cash.Article contentHe said conditions for buying and redeeming stablecoins and any associated fees will need to be made clear to consumers and businesses for the successful adoption of any proposed framework.Article contentThis report by The Canadian Press was first published Dec. 16, 2025.Article contentTrending The Federal Reserve’s rate cut was a clear signal to investors Investor Posthaste: A metric that tells how Canadians are really doing is improving for the first time in years News McKinsey plots thousands of layoffs in consulting slowdown Work CRA's 100-day plan results are not the presents Canadians want or need Taxes Garry Marr: How raiding your TFSA before the end of year could save you thousands Personal Finance Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.
The Federal Reserve’s rate cut was a clear signal to investors Investor Posthaste: A metric that tells how Canadians are really doing is improving for the first time in years News McKinsey plots thousands of layoffs in consulting slowdown Work CRA's 100-day plan results are not the presents Canadians want or need Taxes Garry Marr: How raiding your TFSA before the end of year could save you thousands Personal Finance