In the 1970s, oil prices rose due to geopolitical events significantly impacting Canada's inflation since it is an oil-exporting country. The inflation affected the price of producing oil as well which resulted in a price increase on both ends. The wage-price spiral in the same period was due to workers asking for higher wages because of the increasing prices. That period of time saw an increase in both costs and prices. Around the same time, in the 70s, Canada shifted to a floating exchange rate system providing flexibility and resulting in fluctuations in import prices with inflationary tendencies. In 1980, Canada faced serious inflation in the 1980s and 1990s when the consumer price inflation (CPI) index hit 13 percent in 1980 and was still at 75% in 1991. To cut this problem the Bank of Canada and the Minister of finance agreed on a plan to bring the target level. Initially it was 6percent, but it was lowered down to 2percent. The bank of Canada used the overnight rate to control inflation. Another example could be the post 2010 inflation with Canada aiming for a 2% inflation rate after 2010. Canada was exposed to global challenges, increases in prices and