Unless you’re an economist, you’re likely not overly familiar with the Bank of Canada Act. But this Act nevertheless plays an important role in the lives of many Canadians (particularly those with variable interest rates). Not only does it dictate the Bank of Canada’s mandate—but it’s also the driving force behind Canadian monetary policy.
Given that the Bank’s decision to lower and raise interest rates has been rather important to the Canadian economy in recent years—particularly since the 2008 financial crisis—many economists believe it’s time to revisit the Act. Written more than 85 years ago, a lot has changed—including the role of the Bank.
According to this opinion piece in the Globe, the Bank has unofficially expanded its mandate in recent years. While its goal was always to support price stability through monetary policy, it has since taken strides to support job growth as well. The author, Diane Bellemare, believes we should make this balanced and responsible approach official by enshrining it into law—like other countries have in recent years, including the US, Australia and New Zealand.
If you’re interested, you can read the entire case for a new Bank of Canada Act here. After you do, send me a note and let me know what you think! I’d be interested in hearing your thoughts.