Bank of Canada Weighs Clearer Playbook to Handle Supply Shocks

The Bank of Canada is weighing whether to spell out how it responds to supply shocks in its monetary policy framework, including how much emphasis it places on the strength of the economy when tackling inflation.

The central bank renews its framework every five years, with the 2026 review due by year-end. Policymakers have increasingly argued that the next iteration must reflect a more volatile inflation environment shaped by rising global protectionism, geopolitical tensions and the disruptive potential of artificial intelligence.