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globeandmail.com: Bank of Canada eyes a lower inflation target
HEATHER SCOFFIELD

Toronto — The Bank of Canada’s 15-year-old inflation targeting regime has been successful at bringing Canadians stable prices and prosperity, but the time has come to think about overhauling that regime to suck even more inflation out of the economy, the central bank says.

Efficient inflation targeting has delivered to Canada an era of low interest rates, macroeconomic stability, protection from financial shocks and stable long-term labour contracts, the Bank of Canada boasts in a new analysis of inflation.

However, the central bank says Canadians need to consider a new inflation regime that might push price changes closer to zero — with a nod to the growing number of seniors living on a fixed income.

“Although the erosion in purchasing power is difficult to notice year by year, it can still pose a serious problem on a cumulative basis,” the bank says in a background document. “This erosion is particularly acute for those pensioners on a fixed income.”