Prima: The Bank of Canada’s New Projection and Policy-Analysis Model—An Overview Staff analytical paper 2026-47 Donald Coletti, Martin Kuncl, Martin Harding, Dmitry Matveev, Tolga Özden, Yang Zhang Prima is the Bank of Canada’s new model for projection and policy analysis. It builds on the economic foundations of earlier Bank models, adding detail on how sectoral pressures affect production costs and their pass-through to consumer prices. Content Type(s): Staff research, Staff analytical paper JEL Code(s): C, C4, C43, C8, C82, E, E3, E30, E31, E37 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
Sector-based producer price indexes: New measures of producer price pressures in Canada Staff analytical paper 2026-46 Yena Joo, Ali Rouhghalandari, Vivian Chu, Xin Ha Producer price indexes measure changes in the prices that producers receive for their outputs or that they pay for their inputs. Statistics Canada publishes a range of producer price indexes for specific products and industries. For the first time, these series have been combined into a small set of broad sectoral measures. Content Type(s): Staff research, Staff analytical paper JEL Code(s): C, C4, C43, C8, C82, E, E3, E30, E31, E37 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Economic models, Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
What happens after Governing Council sets the policy interest rate: Inside the implementation framework that makes monetary policy work Staff analytical paper 2026-45 Kaetlynd McRae Setting the target rate is the most visible part of monetary policy, but the monetary policy implementation framework is what helps ensure that decision is reflected in financial markets. Through the design and use of its tools and facilities, the Bank of Canada helps keep short-term market interest rates close to the policy target, while preserving incentives for market participants to trade and actively manage liquidity. Content Type(s): Staff research, Staff analytical paper JEL Code(s): E, E4, E41, E42, E5, E51, E52, E58 Research Theme(s): Financial markets and funds management, Funds management, Monetary policy, Monetary policy framework and transmission, Monetary policy tools and implementation, Money and payments, Payment and financial market infrastructures
Why asking rents have surged in Canada since 2021 Sparks at Bank article Benjamin Straus Renting has become significantly more expensive in Canada in recent years. Asking rents—those advertised for vacant units—rose sharply as demand grew faster than supply. As tenants move and sign new leases, changes in asking rents gradually spread to the average rents captured in the consumer price index. Content Type(s): Staff research, Sparks at Bank article Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting, Structural challenges, Demographics and labour supply
The budget pressures faced by different households since 2020 Sparks at Bank article Yaz Terajima Although inflation has come down from pandemic highs, many households are still feeling the effects of higher prices. Between 2020 and 2025, younger and lower-income households generally saw spending outpace income gains while older and higher-income households fared better. Together, these differing experiences meant income gains for the average household kept up with higher spending. Content Type(s): Staff research, Sparks at Bank article Research Theme(s): Monetary policy, Inflation dynamics and pressures
Automation and Inequality: How Robots Shift Income Between Workers and Owners Staff working paper 2026-34 Gabriela Galassi, Gaelan MacKenzie This paper examines the direct effects of industrial robot adoption on workers and owners within Canadian private corporations. Adoption increases firm scale and per-worker payroll but does not decrease the labor share of value added. Conventional accounting of labor income earned by owners masks the impact on non-owner workers. Content Type(s): Staff research, Staff working papers JEL Code(s): D, D2, D22, D3, D33, J, J2, J23, J3, J31, O, O3, O33 Research Theme(s): Structural challenges, Digitalization and productivity
A New Approach to Estimating Portfolio-Balance Models of the Yield Curve Staff working paper 2026-33 Antonio Diez de los Rios Portfolio-balance models of the yield curve are notoriously hard to estimate. This paper offers a simple, two-step estimation approach that can be implemented with standard term structure estimation methods. In our application to U.S. Treasury data, our method recovers economically interpretable drivers of the yield curve. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E4, E43, E44, G, G1, G12, H, H6, H63 Research Theme(s): Financial markets and funds management, Funds management, Models and tools, Econometric, statistical and computational methods
Liquidity Optimization in Gross Settlement Systems with Quantum Reordering: Application to TARGET2∗ Staff working paper 2026-32 Valerio Astuti, Adriano Baldeschi, Luca Bastianelli, Giuseppe Bruno, Riccardo Russo, Ajit Desai, Danica Marsden Building on our earlier quantum algorithm, this paper shows that reordering queued payments can significantly reduce liquidity needs. The algorithm performs well on smaller payment batches, while traditional algorithms can process larger batches and deliver greater savings. Machine learning also helps identify which payment patterns offer the greatest potential for improvement. Content Type(s): Staff research, Staff working papers JEL Code(s): C, C6, C61, C63, C8, C83, E, E4, E42, E5, E58 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Money and payments, Payment and financial market infrastructures
Labor Markets, Financial Crises, and Inflation: Jobless and Wageless Recoveries* Staff working paper 2026-31 Guillermo Calvo, Emilio Colombi, Fabrizio Coricelli, Pablo Ottonello We document the macroeconomic patterns that characterize labor market recovery from financial crises. Using a sample of postwar recession episodes from around the world, we show that financial crises are typically followed by jobless recoveries, with a sluggish recovery in employment relative to output. Content Type(s): Staff research, Staff working papers JEL Code(s): E, E2, E3, E31, E4, E44, F, F3, F32 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Real economy and forecasting
Climate Change and Monetary Policy: Navigating Physical Risks Staff analytical paper 2026-44 Tatjana Dahlhaus Weather-related disasters can reduce output while increasing inflation, creating difficult trade-offs for monetary policy. This note reviews evidence on the macroeconomic effects of physical climate risks and uses a structural model to assess how more frequent and severe disasters could shape future monetary policy challenges. Content Type(s): Staff research, Staff analytical paper JEL Code(s): C, C6, C68, E, E1, E12, E3, E31, E5, E52, F, F4, F41, Q, Q5, Q54 Research Theme(s): Monetary policy, Inflation dynamics and pressures, Monetary policy framework and transmission, Structural challenges, Climate change