Is it really true that official inflation rate represents Canadians’ actual expenses?

A large number of Canadians say that official inflation numbers don’t actually reflect the real burden of the growing costs they are facing, says Lawrence Schembri, deputy governor at the Bank of Canada.

According to him, this perception difference will probably affect the central bank’s policy, which have been targeting annual inflation at 2% for about 30 years already.

Schembri says the COVID-19 pandemic is a serious test for the reliable expectations that targeted inflation has usually set.

“It’s not than just a number. Keeping our inflation target on a continuing basis supports growing standards of living for all Canadians,” – Schembri noted. “When people and businesses know what the rate of inflation will be, they can make more accurate long-term plans for their careers, savings and investments.”

Now, the central bank is reviewing its inflation target before the renewal of its agreement with the federal government concerning the monetary policy for 2021.

The Bank of Canada has launched its “Let’s Talk Inflation” public consultation earlier in order to find out the Canadians’ opinion on its policy.

The online survey will be available until Oct. 1. It gathers public perceptions concerning inflation and other methods that the BoC may use for providing price stability and economic strength.

“The Bank of Canada is committed to accountability and transparency. All the actions we take and how well we do our job influences the lives of all Canadians. And great planning starts with great listening, so we want to hear from you,” – noted BoC Governor Tiff Macklem. “I hope you use this chance and let us know how economic changes are affecting your lives. Please, tell us what matters to you.”