track record of success with inflation targeting, which reinforces its effectiveness. as i said, the inflation target is really a beacon to guide our policy. by grounding our actions in our framework, we will always be working toward bringing the economy near capacity with full employment. policy and the pandemic a successful inflation - targeting monetary policy framework has a number of core ingredients. clearly, we need to agree on a measure of inflation to target. we need to assess how much demand is in the economy relative to its productive capacity or supply. we need tools to influence demand, or spending, and bring it in line with supply. we also need an outlook for the economy because it takes time for our tools to affect spending and inflation. and because there are many unknowns, we need an understanding of the risks to the outlook. 1 / 4 bis central bankers'speeches these are the basic ingredients of inflation targeting. and covid 19, combined with structurally low interest rates globally, is affecting all of them. a measure of inflation let ’ s start with our measure of inflation. our target is the 12 - month rate of change in statistics canada ’ s consumer price index ( cpi ) — the most common and comprehensive inflation measure out there. we target the 2 percent midpoint of a 1 to 3 percent range for the annual inflation rate. but in any given month, the cpi can be quite volatile and not reflect its long - term trend. that ’ s because prices of items such as fresh fruit and vegetables or gasoline can jump around a lot, affecting the cpi. so, we look at several specific measures of core inflation to get a better sense of the underlying trend in inflation. total cpi is weighted to reflect the buying patterns of the average canadian household. in normal times, for example, canadians spend a lot more on gasoline than on alcohol, so gasoline has a larger weight in the index. but these aren ’ t normal times. because of the pandemic, canadians are spending much less on gasoline and air travel, and more on food purchased from stores. and until very recently, they weren ’ t spending anything on haircuts. the implication is that the cpi isn ’ t fully reflecting people ’ s current inflationary experience. bank staff have been working with statistics canada to better understand the implications of these shifts in spending patterns. as the economy reopens, many of these shifts will unwind. we will be working to look through temporary shifts while capturing any more enduring changes.

mark carney : summary of the latest monetary policy report opening statement by mr mark carney, governor of the bank of canada and chairman of the financial stability board, at the press conference following the release of the monetary policy report, ottawa, ontario, 17 april 2013. * * * good morning. tiff and i are pleased to be here with you today to discuss the april monetary policy report, which the bank published this morning. • global economic growth has evolved broadly as anticipated in january. • in the united states, the economic expansion is continuing at a modest pace, with gradually strengthening private demand partly offset by accelerated fiscal consolidation. • significant policy stimulus has been introduced in japan. • europe, in contrast, remains in recession, with economic activity constrained by fiscal austerity, low confidence and tight credit conditions. • after picking up to very strong rates in the second half of 2012, growth in china has eased. • commodity prices received by canadian producers remain elevated by historical standards and, despite recent volatility, overall they are little changed since january. • the bank expects global economic activity to grow modestly in 2013 before strengthening over the following two years. • following a weak second half of 2012, growth in canada is projected to regain some momentum through 2013 as net exports pick up and business investment returns to more solid growth. • consumer spending is expected to grow at a moderate pace over the projection horizon, while residential investment declines further from historically high levels. growth in total household credit has slowed and the bank continues to expect that the household debt - to - income ratio will stabilize near current levels. • despite the projected recovery in exports, they are likely to remain below their prerecession peak until the second half of 2014 owing to restrained foreign demand and ongoing competitiveness challenges, including the persistent strength of the canadian dollar. • on a quarterly basis, growth in canada is expected to pick up to about 2. 5 per cent in the second half of this year. despite this expected pickup, with the weak growth in the second half of 2012, annual average growth is now projected to be 1. 5 per cent in 2013. the economy is then projected to grow by 2. 8 per cent in 2014 and 2. 7 per cent in 2015, reaching full capacity in mid - 2015. this is later than anticipated in january. • total cpi and core inflation have remained low in recent months, broadly in line with expectations in january. muted core inflation reflects material excess supply in the economy