This is a good question.
Let me answer you first and then I will give the floor to Paul.
In 1991, the government and the Bank of Canada tried to find a formula for slowing down inflation, which was very high at the time. Thus, deflation targets were established until 1995. This is how the inflation rate went from 4 to 2% at the end of that period.
In 1995, we agreed to keep the target at 2%; we have renewed it twice since then. A range of 1% either way was provided, because of normal variations in inflation.
Canada was the second country to adopt this kind of system. It was a pioneer in the field. The 2% rate was not based on past experience, because the system was new, but after a few years, other countries followed our example and adopted targets. The European bank, for example, adopted a target rate of 2% or less. England also adopted a 2% rate. In other countries, the rate is 2.5 or 3%. Japan and the United States are also considering adopting such a system.
Paul might have something to add.