Our actions worked
Before the pandemic, the Bank had never done QE and had used forward guidance only once. Coming out of the crisis, Canadians have asked us: did they work?
Bank staff have researched how effective these tools were in the pandemic. This research shows that QE and extraordinary forward guidance helped lower longer-term interest rates, which made borrowing cheaper for households and businesses. Monetary and fiscal policy responses, along with the rapid rollout of vaccines, helped the Canadian economy recover relatively quickly from the COVID-19 crisis.
The economic recovery meant QE was no longer needed. In October 2021, we became the first major central bank to end our QE program. We began the next phase in April 2022: quantitative tightening (QT), where we allow bonds to mature and roll off our balance sheet. We expect to complete QT sometime in 2025.
