External Deputy Governor Nicolas Vincent gives a behind-the-scenes look at how the Bank of Canada’s Governing Council arrives at its monetary policy decisions.
Gathering information and advice
Eight times a year, Governing Council decides whether to raise, maintain or lower the policy interest rate—the Bank’s main tool for keeping inflation low, stable and predictable.
These decisions affect households and businesses in many ways, and they are taken with the utmost care.
Starting about a month before each decision is announced, Governing Council goes through a rigorous process of gathering and analyzing information and advice.
Economic data are important, but they have limits. They’re based on the past and don’t reflect the variety of experiences lived by Canadians. So, along with hard data, Governing Council also considers:
- information from the Bank’s surveys of consumers and businesses
- information from meetings with businesses and community groups across Canada
A week before making the decision, Governing Council meets with advisors to debate different courses of action. Everyone …