Bank of Canada Independence Under Scrutiny Amid Sweeping Policy Shifts
A C.D. Howe Institute report warns against assuming the Bank of Canada's independence is secure, as federal and provincial governments enact significant policy changes across finance, trade, and energy.
A recent observation from the C.D. Howe Institute highlights growing concerns that Canada must not assume the Bank of Canada’s independence is secure. The organization warns that Ottawa should proactively safeguard the central bank from political influence to ensure it can continue delivering low and stable inflation.
Economic and Policy Realignments
This call to action comes as the Bank of Canada’s regulatory scope expands, with Budget 2025 proposing Bill C-15, the Stablecoin Act, to place stablecoin issuers under its supervision. Bank of Canada Governor Tiff Macklem has indicated that flexibility will be a key consideration in the upcoming 2026 mandate review, particularly concerning supply shocks and housing affordability. Concurrently, Prime Minister Mark Carney announced a one-year waiver for the 2026 federal Zero Emissions Vehicle (ZEV) mandate’s 20-percent sales requirement, initiating a 60-day review. This pause acknowledges ZEV sales below original targets.
Further economic adjustments include the new Canadian Mutual Recognition Agreement, signed by all provinces, territories, and the federal government, which takes effect next month to reduce interprovincial trade barriers. The Calgary Chamber of Commerce has consistently advocated for such measures to bolster economic resilience. In the energy sector, a significant agreement between Prime Minister Mark Carney and Alberta Premier Danielle Smith has eliminated the federal oil and gas emissions cap and exempted Alberta from federal clean electricity regulations, a move praised by the Canadian Association of Petroleum Producers but viewed with caution by the Canadian Climate Institute regarding potential climate policy implications. These dynamic shifts underscore a period of active governmental intervention and policy realignment across Canada’s economic landscape.