If you thought the answer to be around 2% then you, along with most Canadians, subscribe to the long-run targeted rate of inflation by the Bank of Canada. A more robust answer to this question is a measured one. This is because there is a myriad of ways inflation is measured, and the measure that matters depends on who is asking. The average Canadian is most concerned with the rise in their cost of living. On the other hand, the Bank of Canada is most concerned with identifying the average underlying trend in inflation that looks through temporary changes. Some observers even question the methodologies of measuring inflation, and have come up with several viable alternatives that give quite different results. While varied measures exist, inflation considerations are a basic starting point when constructing portfolios for the long-run…

Download file below for full content:

What is Canada’s Inflation Rate?