The Bank of Canada is the nation's central bank. Our main role is “to promote the economic and financial welfare of Canada,” as defined in the Bank of Canada Act.
Our main areas of responsibility are:
- Monetary policy: We influence the supply of money circulating in the economy, using our monetary policy framework to keep inflation low and stable.
- Financial system: We promote safe, sound and efficient financial systems, within Canada and internationally. We also conduct transactions in financial markets in support of these objectives.
- Currency: We design, issue and distribute Canada’s bank notes.
- Funds management: We are the “fiscal agent” for the Government of Canada, managing its public debt programs and foreign exchange reserves.
- Retail payments supervision: We supervise payment service providers, according to the Retail Payment Activities Act.
We were founded as Canada’s central bank in 1934 and opened our doors in March 1935. In 1938, we became a Crown corporation belonging to the federal government.
The Bank of Canada Act has been amended several times, but the preamble to the Act has not changed. We still exist “to regulate credit and currency in the best interests of the economic life of the nation.”
Who runs us
The Governing Council leads the Bank. As our policy-making body, it is responsible for:
- conducting monetary policy
- promoting a safe and efficient financial system
The Governing Council is made up of the Governor, the Senior Deputy Governor and the Deputy Governors.
The Governing Council's main tool for conducting monetary policy is the policy interest rate. This rate is normally set on eight fixed announcement dates per year. The Council reaches its decisions about the rate by consensus—rather than by individual votes, as is the case at some other central banks.
The Executive Council is made up of the Governing Council, the Chief Operating Officer and the Executive Director – Supervision. Together, they chart the strategic direction of the Bank.
As our Chief Executive Officer, the Governor ultimately has full control over the business of the Bank. The Governor:
- chairs the Board of Directors
- leads our Governing Council
- conducts monetary policy to achieve an inflation target agreed upon by the Bank and the Government of Canada
The Board of Directors appoints the Governor:
- for a seven-year term, to allow the medium- and long-term perspective essential for effective monetary policy
- with the approval of the Governor in Council (the federal Cabinet)
The Senior Deputy Governor
Overseeing the Bank’s strategic planning and operations, our Senior Deputy Governor:
- shares responsibility for the conduct of monetary policy as a member of the Bank’s Governing Council
- is a member of the Bank’s Board of Directors
- is appointed by the Board of Directors for a seven-year term
How we’re separate from the political process
The Bank of Canada is a special type of Crown corporation, owned by the federal government, but with considerable independence to carry out its responsibilities.
- The Governor and Senior Deputy Governor are appointed by the Bank's Board of Directors (with the approval of Cabinet), not by the federal government.
- The Deputy Minister of Finance sits on the Board of Directors but has no vote.
- We submit our expenditures to our Board of Directors, whereas federal government departments submit theirs to the Treasury Board.
- Our employees are regulated by the Bank itself, not by federal public service agencies.
- Our books are audited by external auditors appointed by Cabinet on the recommendation of the Minister of Finance, not by the Auditor General of Canada.
An independent monetary institution separates the power to spend money from the power to create money.
As a central bank separate from the political process, we are able to adopt the medium- and long-term perspectives essential to conducting effective monetary policy.
We are committed to publishing information about how we work.
- The Bank of Canada Act requires us to submit our audited financial statements each year, accompanied by a report from the Governor to the Minister of Finance.
- The Payment Clearing and Settlement Act gives us responsibility for the oversight of payments and other clearing and settlement systems in Canada, for the purpose of controlling systemic risk.
- Our Annual Report includes audited financial statements, and we also publish a Quarterly Financial Report.