By Canadian Press

Bank of Canada plans to keep eye on climate change impact on inflation

Nov 3, 2021 | 11:57 AM

OTTAWA — The Bank of Canada says it plans to more closely monitor how increasingly frequent and severe weather events could impact the prices consumers pay for goods as part of its mandate to keep inflation in check.

The central bank’s promise today, which it linked to the UN climate summit in Glasgow, Scotland, will also see it more publicly explain how climate change could impact the path of the Canadian economy.

The announcement comes just ahead of a report the bank intends to make public about the risks climate change poses to the financial system, including granular details on sectoral impacts, and a renewal of the Bank of Canada’s mandate.

The central bank is mandated to keep annual inflation rates hovering around two per cent, but its monetary policy framework gets renewed every five years.

Conservative Leader Erin O’Toole warned Prime Minister Justin Trudeau in a letter late last month that his party will oppose any “growth or other social mandate expansions” to the Bank of Canada’s mandate.

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Although not officially part of the Bank of Canada’s marching orders, other central bankers argue they should take more of a leading role in helping economies adapt to climate change.

This report by The Canadian Press was first published Nov. 3, 2021.

The Canadian Press