The Bank of Canada (BoC) has reinforced its commitment to the country’s long-standing 2% inflation target, declaring it will not reconsider or revise this anchor in the 2026 policy framework review. Governor Tiff Macklem stressed that the target remains critical for maintaining public trust, ensuring monetary stability, and guiding expectations in a turbulent global economic climate.

What the Announcement Means

Macklem emphasized that the 2% target will stay in place, ruling out speculation that the BoC might consider shifting to a broader range (such as 1–3%) or a higher benchmark.
The Governor argued that altering the inflation anchor could destabilize financial markets and weaken Canada’s monetary policy credibility.
The central bank acknowledged housing costs and shelter inflation continue to distort overall inflation data but clarified that changing the target would not address these structural issues.

Why It Matters for Borrowers

Stable Outlook for Rates: The decision means interest rate adjustments will continue to be guided by the same inflation anchor, reducing the risk of abrupt policy swings.
Confidence in Planning: Homebuyers and mortgage holders can better forecast rate environments, allowing more accurate long-term budgeting.
Mortgage Strategy Clarity: Borrowers weighing fixed vs. variable options can strategize with more certainty, as the BoC has made it clear that monetary policy stability is a priority.

Mortgage-Expert Insights

Predictability in Volatile Times
While global trade tensions and housing affordability challenges persist, the BoC’s stance provides borrowers and lenders with a stable framework for planning.
Shelter Costs in Focus
Macklem acknowledged that shelter inflation is distorting headline inflation. Although this doesn’t change the target, it signals the BoC may adjust how it communicates and interprets inflation data moving forward.
Borrower Takeaway
- Fixed-rate borrowers can rest assured that policy remains anchored, minimizing the risk of sudden hikes.
- Variable-rate borrowers should continue to monitor BoC’s rate decisions, but expectations for measured, transparent changes are now stronger.

Quick Summary

Focus Area	BoC Position & Impact
Inflation Target	Remains fixed at 2% — no revision planned in 2026.
Housing Costs	Acknowledged as a challenge but not altering the inflation anchor.
Borrower Implication	Stable inflation target supports predictable mortgage planning and rate expectations.

The Bank of Canada’s firm stance on maintaining its 2% inflation target signals stability at a time of uncertainty. For Canadian borrowers, this means greater clarity in mortgage strategies—whether renewing, refinancing, or buying. Stability in policy anchors helps Canadians plan better in an otherwise unpredictable housing and economic environment.

With the Bank of Canada reaffirming its 2% inflation target, mortgage strategies now have a more predictable foundation. Whether you’re renewing, refinancing, or buying your first home, stability in policy means it’s the right time to review your options.

👉 Talk to a Mortgage Expert Today