The Ministry of Finance has released an updated 5-year inflation mandate for the Bank of Canada – under the auspices of the Deputy PM & Minister of Finance Chrystia Freeland. The inflation target is unchanged at 2%, and economists noted that there was very little substantive change to the institution’s directives. One interesting change is that the new mandate pushes the BOC to take more stock of the country’s labour market when determining rate changes (or non-changes).

The mandate made no mention of the BOC being required to maintain full employment, a core mandate of the U.S. Fed. On the housing markets, economists did not see anything in the new mandate that reflect any change in thinking about the housing market. Price growth remains the number one goal of the Bank. The value of Canada’s household and mortgage debt now exceeds that of the country’s GDP, and its relative size has doubled since 1990, according to documents published by the BOC.

While a full employment requirement was not included, the new mandate did include flexibility for the BOC to moderately overshoot the inflation target to “support maximum sustainable employment.” Overall, the new mandate is a rubber stamp for status-quo continuity. It also adds legitimacy to the Bank keeping rates low despite high inflation to help economic recovery and job growth – points the BOC made well before they were embedded into the new mandate.