It's not that the Bank of Canada doesn't have an implicit target of unemployment, it does implicitly, because it believes in some notion that there's a kind of NAIRU out there, a non-accelerating inflationary rate of unemployment. So what it wants to do is keep that economy within a certain band, which has prevented unemployment in Canada from going below 6%, basically, if you look at the last 20 years. In that regard, there's an implicit one there.
What I'm saying is that we should be able to have it explicitly, and it should be something lower than that NAIRU--that's my concern. And we should allow that band for the inflation targeting to be wider, to allow for the possibility of getting that unemployment rate lower, if indeed we do have a NAIRU there.
My belief is that if you look at the actual work and research done—I'm sure some would support me on this—there's no NAIRU here that is a constant. It varies with the unemployment rate. That's why it becomes a bigger problem. You have a central bank that believes there's something out there that exists that will prevent inflation from actually going up, which is an unemployment rate of around 6% or 7%. But, then, there are those who are saying that this NAIRU is not some constant. Hence, if you look at that work, it would suggest they have a problem even with the implicit one, as I said, that they do not officially talk about but that is there.
Now, with regard to what should be an unemployment target, I'm old enough to remember back in 1965, when they set up the old Economic Council of Canada. They came out with some very precise figures as to what should be the full employment in Canada. Indeed, in 1966 we had reached an unemployment rate in Canada of around 3.5% or less, if I remember correctly. We know that we've had unemployment rates that are far lower than the 6%, 7%, or 8% range that we've been living with over the last 20 years. My point is simply that what should be on the radar screen of the central bank should be a concern about whether that unemployment rate should be a lot lower here than what they think it should be because of the inflationary pressures argument along the lines of the NAIRU.
What should it be exactly? As I said, I could go back to the old Economic Council one of 3.5%, but it surely should be less than that 6%.