Who is responsible for monetary policy?
The inflation-control target one of the two cornerstones of Canada’s monetary policy is set jointly by the Bank and federal government. However, the day-to-day administration of monetary policy is the responsibility of the Bank’s Governing Council, composed of the Governor, Senior Deputy Governor, and Deputy Governors. The Bank of Canada Act requires regular consultations between the Governor and the Minister of Finance on the direction of monetary policy. If a profound disagreement were to occur between the Bank and the government, the Minister of Finance could issue a written directive to the Governor specifying a change in policy. This would most likely result in the Governor’s resignation. However, such a directive has never been issued.
