The Bank of Canada’s target rate is the interest rate that the Bank of Canada wants major financial institutions to use when lending one-day (overnight) funds to each other.
The target rate therefore sets the “overnight lending rate” and is often referred to as the Bank’s key interest rate or key policy rate.
Changes in the target rate influence other interest rates as well, such as those for consumer loans and mortgages.
In November 2000, the Bank introduced a system of eight “fixed” dates each year on which it announces whether or not it will change the target rate.
Partial Source: Bank of Canada