Earning the trust of Canadians

In her first speech with the Bank of Canada, Senior Deputy Governor Carolyn Rogers talks about how independence and accountability help the Bank build and maintain trust.

Canadians benefit from our independence

The Bank of Canada needs to be separate from the banking sector and removed from the political process so we can guide the economy in the long-term best interests of Canadians. That’s why the Bank of Canada Act sets out what our objectives should be but lets us decide how to achieve them.

The monetary policy framework that we agree on every five years with the Government of Canada is the best example of this independence. Most recently updated in 2021, the framework lays out a target level for inflation but allows us to decide on the best way to meet it. This approach has helped us keep inflation, on average, close to our target of 2% for 30 years, and it has anchored Canadians’ expectations of future inflation.

The Bank’s Board of Directors includes 12 independent members. They aren’t involved in monetary policy decisions, but they recommend candidates for Governor and Senior Deputy Governor, who serve seven-year terms. This provides accountability and continuity that outlasts election cycles.

We’re independent but also accountable

Statistics Canada publishes the consumer price index every month. That means Canadians can easily see if we’re achieving our objective of keeping inflation on target.

Since adopting the 2% inflation target, we’ve communicated more often and more clearly about our goals through our Monetary Policy Report, speeches and press conferences.

We’re accountable in other ways too:

• The Governor and Senior Deputy Governor regularly appear before parliamentary committees.
• While this power has never been used, the Minister of Finance can table a written directive to the Bank in Parliament if the Minister and the Governor ever disagree on monetary policy.
• The Bank is audited by two independent firms every year—a requirement that doesn’t apply to any other federal Crown corporation.
• The Auditor General of Canada has legal authority to investigate and audit some of our activities and records.

The Bank also engages with individual Canadians and businesses on a wide variety of topics, such as the most recent Canada-wide consultations on the renewal of our monetary policy framework.

Trust is always key—especially in uncertain times

The Bank took extraordinary steps to support Canadians during the COVID-19 pandemic. We dropped the policy rate to its effective lower bound, purchased government bonds and committed to keeping rates low until the economy recovered.

We took these steps to lower borrowing costs for Canadian households and businesses—not to help commercial banks or fund government spending.

And when we took these unusual steps, we increased the transparency around our actions and boosted our efforts to explain them as clearly as we could for Canadians. Maintaining public trust is particularly important when uncertainty is high.

Canadians trusted us to respond with strength and conviction when the economy needed support during the pandemic. And they’re counting on us now to lower inflation. We take that trust seriously. We’ve taken concrete steps to bring inflation back down to the 2% target. Interest rates will need to rise further, but we’ll be watching closely to see how the economy responds.