Canadians broadly support keeping the central bank’s 2 percent inflation target in place, but many still feel the pinch of prices that rose sharply in recent years and have never come back down a tension captured in a new report from the Bank of Canada released ahead of its next policy framework renewal.
The findings stem from nationwide public consultations conducted before the Bank’s 2026 monetary policy review, a process the central bank undertakes every five years. The conversations brought together everyday Canadians, private-sector economists, consumer advocates, and think tanks from coast to coast.
The headline finding was clear: Canadians want the current system to stay. Support for flexible inflation targeting and the 2 percent goal was described as strong throughout the consultations. But dig a little deeper into the report, and a more complicated picture emerges one shaped by years of strained household budgets and a growing sense that official numbers don’t always reflect life at the checkout counter.
That distinction matters more than it might seem. Inflation peaked at 8.1 percent in mid-2022, the highest rate Canada had seen in nearly four decades. Since then, the Bank of Canada’s aggressive rate hike cycle has brought that figure back toward the 2 percent mark. But lower inflation is not the same as lower prices groceries, rent, and insurance costs have continued to climb, just at a slower pace. For many households, the damage has already been done.
Participants in community conversations made clear they did not want prices to rise any further. At the same time, many viewed higher interest rates as compounding rather than solving their financial struggles an uncomfortable bind that the Bank of Canada now has to navigate as it shapes its next policy mandate.
Canadians also told the central bank they prefer gradual, predictable shifts in interest rates over sudden moves, citing the importance of stability when managing household finances. The preference reflects a broader desire for an institution that moves carefully and communicates clearly not one that surprises markets or families.
One of the more striking threads running through the consultations was the disconnect between official inflation data and what Canadians actually experience when they shop. Many participants said the Consumer Price Index the standard measure of living costs and the benchmark for the Bank’s interest rate decisions simply does not match their reality.
That gap has consequences. When people feel the numbers don’t reflect their lives, trust in the data erodes, and trust in the institution that relies on that data tends to follow. Consumer and business groups urged the Bank to rethink how it communicates inflation figures, asking for messaging that better captures the lived experience of households and small businesses rather than abstract statistical averages.
The Bank of Canada acknowledged this concern directly in its report. Rebuilding that trust, participants said, starts with transparency being open about what data drives interest rate decisions, and why.
The current inflation-control framework, a joint agreement between the Bank of Canada and the federal government, sets the official target at 2 percent the midpoint of a 1 to 3 percent control range. That arrangement is up for renewal in 2026, and the consultations were designed to inform what the next version should look like.
Based on the public feedback, a dramatic overhaul appears unlikely. Canadians are not asking the central bank to abandon its approach they’re asking it to be more honest, more measured, and more attuned to what inflation actually feels like when you’re buying groceries or renewing a lease. Whether the Bank can meet that bar while staying true to its core mandate is the challenge it now heads into renewal carrying.
