I'm Tiff Macklem.
I'm a dad, I'm a husband,
I like sports,
especially outdoor sports.
I'm also the Governor
of the Bank of Canada.

What is inflation?

Imagine you're saving
up to buy something,
maybe you want to buy
a new cell phone.

They're expensive.

It's going to take a while to save
up enough money to buy one.

And then you go and you buy one
and you discover the price
has gone up.

You can't afford it anymore.

Well, when prices of most goods
and services are going up,
that's inflation.

What's the problem with inflation?

When there's too much inflation,
prices tend to move around
a lot, and it's hard to plan.

It's hard to know how much you
need to save to buy things.

When inflation is too high,
it messes up how the
economy works.

And that's bad for everyone.

How do you stay on top of that?

At the Bank of Canada,
we spend a lot of time analyzing
the forces at work on the economy,
and that helps us anticipate
where inflation's going so
we can get ahead of it
and try and keep inflation close
to the 2% target.

2% inflation
is a little bit like

the story of Goldilocks
and the Three Bears.

2%, it's not too hot,
it's not too cold.

When inflation's too hot or too
high, prices are going up.

They're unpredictable,
and it's hard to plan.

When inflation is too low,
or too cold,
the economy is usually struggling.

There's not enough spending,

There are not enough jobs
in the economy.

What we've found is that
by keeping inflation
around 2%,
the economy is well balanced
and is creating growth
and jobs for Canadians.

Have we ever had
really high inflation?

Back in the 1970s,
when I was a teenager,
inflation was more than 10%,
and I didn't really
understand inflation,
but what I could see was
it seemed to make
everybody angry.

There were a lot of worker strikes.

Everybody seemed to
feel ripped off that
their paycheck didn't buy as
much as they thought it should.

In 1991 the Bank of Canada
began targeting inflation.

And since then,
inflation has been very stable
and much more predictable
around its 2% target.

That's helped the economy
work better.

We work for Canadians to control
inflation,
and that's a pretty cool job.