The Government of Canada and the Bank of Canada jointly review and renew the Bank’s monetary policy framework every five years. The Bank then independently conducts monetary policy to achieve the framework’s goals. The Government and the Bank agree that monetary policy must work to promote the economic and financial well-being of Canadians. We also agree that the best way monetary policy can do this is by keeping inflation low, stable, and predictable, thereby protecting Canadians from large increases in the cost of living. A credible and well-understood monetary policy framework that focuses on price stability helps the economy grow, supports investment and job creation, and fosters confidence in Canada’s economy. Over the past five years, the global and Canadian economies have been hit by repeated shocks. Post-pandemic disruptions in supply chains, rapid shifts in demand, and geopolitical conflicts have pushed up inflation around the world, including in Canada. During this period, the Bank of Canada acted forcefully to restore price stability. While the adjustment was difficult for households and businesses, the policy response worked: inflation returned to the 2% target and the 1% to 3% control range. The experience of the past five years has reinforced the value of a clear and credible inflation-targeting framework that provides the Bank with the mandate and the flexibility to respond decisively to changing economic conditions. The Bank of Canada has reflected on the period of elevated inflation and its policy response. The episode underscored that high inflation imposes significant costs on households and businesses, eroding Canadians’ purchasing power and their sense of the fairness of our economic system. Will the renewed framework lower Canadian household costs? No, the renewal maintains the 2% inflation target without new price controls or immediate bill reductions.