Fact sheet: Bank of Canada Celebrates 75 years
Born in the worst years of the Great Depression, and guiding Canada's economy ever since, the Bank of Canada celebrates its 75th year starting on 11 March 2010. The Bank of Canada was created by an Act of Parliament to foster the economic and financial well-being of all Canadians and is considered the country's pre-eminent macroeconomic institution. The central bank has sole authority to conduct monetary policy, working to preserve the value of money by keeping inflation low and stable.
Bank of Canada Facts
- The Bank of Canada Act received Royal Assent on 3 July 1934; the Bank began operations on 11 March 1935 and issued its first bank notes. Since then the Bank has issued five more series of bank notes, with the next to be launched in 2011.
- The Bank of Canada began as a privately-owned institution, with shares sold to the public at a par value of $50. In 1938, all shares were purchased by the Government of Canada and the Bank became a Crown corporation.
- The Bank of Canada building on Ottawa's Wellington Street was completed in April 1938 at a cost of about $1 million.
- During World War II, the Bank of Canada's nine victory Bond campaigns raised almost $12 billion for the war effort. After the war, the program was continued with Canada Savings Bonds.
- During World War II, vaults deep beneath the Bank of Canada's headquarters provided a safe haven for tons of gold secretly moved from European central banks.
- The Canadian dollar was allowed to float on currency markets (rather than being pegged to the US dollar) in September 1950. The dollar's exchange rate was fixed again from 1962 to 1970; it has floated ever since.
- In the mid-1950s, the Bank began to develop a market for government bills and bonds in Canada.
- In 1961, a fundamental disagreement between the then-Governor of the Bank, James Coyne, and Finance Minister Donald Fleming led to Parliamentary debates and hearings and Coyne's eventual resignation. The "Coyne affair" led to an amendment to the Bank of Canada Act in 1967 enshrining the Bank's operational independence and creating a mechanism for resolving policy disagreements between the government and the Bank.
- In the early 1960s, the Bank of Canada became one of the first central banks to use computer-based economic forecasting models.
- In 1975, members of the Bank's staff served on the new Anti-Inflation Board, created by the government to reduce inflation (which hit 11 per cent in 1974) by influencing public behaviour and expectations.
- Acclaimed British Columbia architect Arthur Erickson led the design of the new Bank of Canada glass towers built between 1972 and 1979 and encompassing the Bank's original granite headquarters.
- The Currency Museum opened in December 1980 to house Canada's National Currency Collection, which consists of about 100,000 bank notes, coins, tokens, and other artifacts.
- In February 1991, the Bank and the federal government introduced targets aimed at reducing inflation to 3 per cent by late 1992 and 2 per cent by late 1995. The 2 per cent target was achieved more quickly than expected and the inflation-targeting agreement has been renewed four times. The current agreement, which targets a 2 per cent rate of inflation within a 1-3 per cent inflation-control range, expires in 2011.
- The Bank's Governing Council was created in 1994 to take collective responsibility for monetary policy decisions.
- The Monetary Policy Report, which explains the analysis and economic outlook upon which the Bank makes monetary policy decisions, was launched in May 1995.
- The Bank spent three years preparing for the turn of the century; the Y2K Project ensured that the Bank's technological systems would continue to function properly when computer clocks switched to 1 January 2000.
- Starting in December 2000, the Bank began making interest rate announcements on eight pre-specified dates per year.
- Following the terrorist attacks in the United States on 11 September 2001, the Bank lowered its key policy rate by 1 3/4 per cent to underpin confidence and support the Canadian economy.
- The Financial System Review began publication in 2002, to raise awareness of risks posed by financial sector developments and how to address them.
- The Bank's Fellowship Program was launched in 2002 to provide funding for academic research of interest to the Bank and to improve its links with Canada's academic community. The Bank launched the Governor's Award September 2007 to recognize outstanding academics at a relatively early stage in their careers who are working at Canadian universities in areas of research critical to the Bank's mandate.
- In 2003, the Bank began to broadcast Governors' public speeches live on the Internet.
- On 8 October 2008, in response to the worsening global financial market crisis, the first internationally-coordinated interest rate cut was announced by six central banks - the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, Sveriges Riksbank (Sweden) and the Swiss National Bank.
- During the global financial crisis and worldwide recession of 2008-09, the Bank of Canada reduced its overnight rate by a total of 425 basis points, reaching 0.25 by April 2009, a historic low and its lowest possible level. At the same time, the Bank made a commitment to hold this very low rate until the end of the second quarter of 2010, conditional on the outlook for inflation.
- In response to that crisis, the Bank put in place a range of temporary extraordinary facilities to provide repayable funds to otherwise-solvent financial institutions to help them meet short-term obligations and continue to lend to Canadian households and businesses.
- On March 11, 2010, the Bank of Canada celebrated its 75th anniversary.
For more on the Bank of Canada's history and legacy, the Bank has produced the following:
By All Accounts: Outside Perspectives on the Bank of Canada: This is the fifth and final book in the Bank's souvenir history series. This volume, written by retired Financial Post editor-in-chief Neville Nankivell, presents a portrait of the Bank from the perspective of outside observers, particularly journalists and editorial cartoonists. (2010)
Beads to Bytes: Canada's National Currency Collection: This volume explores money and the role it has played, and continues to play, in society, through the lens of Canada's National Currency Collection. The Collection is an extraordinary repository of coins, bank notes, and related paraphernalia from around the world. (2008).
More Than Money: Architecture and Art at the Bank of Canada: This volume will take you on a tour of the head office complex, highlighting interesting features of architecture, interior design, and decoration, as well as elements of restoration and preservation. It also features pieces from the Bank's art collection. (2007).
The Art and Design of Canadian Bank Notes: This volume offers readers a behind-the-scenes look at the demanding world of bank note design, highlighting the beauty of Canada's bank notes and celebrating the engraver's art. (2006).
The Bank of Canada: An Illustrated History: Published to commemorate the Bank's 70th anniversary, this souvenir book depicts the history of the Bank through descriptive text, photographs, and reproductions of cartoons, newspaper clippings, posters, and other artifacts. (2005).
Copies of these books are available for $25 at the Bank of Canada's Currency Museum or by contacting Publications Distribution at 1 877 782-8248 (toll free, North America).
By All Accounts: 75 years of Central Banking exhibit in the Bank of Canada's Currency Museum.
Light and Space: the Architecture of the Bank of Canada: This short video describes the beautiful, historic buildings that house the Bank of Canada and its staff in the national capital, with particular emphasis on the contribution of renowned Canadian architect Arthur Erickson. Features an interview with Phyllis Lambert, founder of the Canadian Centre for Architecture. Available for viewing in the Currency Museum or via the Bank's YouTube channel.