Canada's inflation target setting could be better

CANADA - The Bank of Canada's new regime for setting inflation targets is an improvement on the old, but the bank could do even better, according to a new report from the C.D. Howe Institute.

The system would work better if the bank replaced its current target for annual changes in the consumer price index with a longer-term average that would give Canadians more confidence that inflation would remain around 2 per cent a year, said Shay Aba, an economist at the institute.

The bank's decade-old