The Bank of Canada (English: Bank of Canada; French: Banque du Canada) is the central bank of Canada, established by the Bank of Canada Act of 1934. It is positioned as a non-commercial bank that does not provide banking services to the public, but is responsible for the country's monetary policy formulation, legal tender issuance, Financial Institution Group supervision, etc., to maintain the stability of the Canadian economy and financial system. It is also a state-owned company wholly owned by the Ministry of Finance, but it is not a government department. It has considerable independence from other departments of the Canadian federal government. Its headquarters is located in the Bank of Canada Building between Wellington Street and Bank Street in Downtown Ottawa.

History

The Bank of Canada headquarters building in Ottawa

In 1913, Parliament formally discussed the establishment of a national bank. At that time, MP McLean proposed a motion to establish a private bank outside the control of the government to perform the functions of a national bank in the country. However, it was rejected by the Prime Minister. Prime Minister Boden replied: "I don't see the need for such a bank to exist".

During the 1930s, the Great Depression dealt a heavy blow to the Canadian economy. At that time, Canada was a mainly decentralized rural economy with a large number of local community-level commercial banks. There was little demand for the establishment of a national bank.

In the early 1930s, the political climate changed. The lagging of the country's existing financial structure led to a lack of national income, which led to a wave of criticism from the public. In 1933, Prime Minister Bennett established a royal commission to study "the banking system as a whole, the monetary system, and the reasons for or against the establishment of a national banking institution." The royal commission subsequently supported the establishment of a national bank, the prime minister adopted its recommendations, and an appendix report at the time became the framework for the Bank of Canada Act.

On July 3, 1934, the government introduced the Bank of Canada Act, which received Royal Assent shortly after. In March 1935, the Bank of Canada was officially established and opened its doors as a private institution, selling shares to the public. But soon, the new government introduced new laws to nationalize the Bank of Canada.

In 1938, the Bank of Canada was nationalized and remains so today. However, the Bank of Canada is not a government department and operates with strong independence.

Objectives

The objective of the Bank of Canada is to enhance the overall economic and financial well-being of Canada.

"WHEREAS it is desirable to establish a central bank in Canada to regulate credit and currency in the best interests of the economic life of the nation, to control and protect the external value of the national monetary unit and to mitigate by its influence fluctuations in the general level of production, trade, prices and employment, so far as may be possible within the scope of monetary action, and generally to promote the economic "The Central Bank of Canada is hereby established for the purpose of promoting the general economic and financial well-being of Canada within the scope of financial measures, to regulate credit and money in the best interests of national economic life, to control and protect the exchange rate of the national monetary unit, and to mitigate the impact of exchange rate fluctuations on the overall level of production, trade, prices and employment."

- Preface to the Bank of Canada Act

Organizational Structure

The Bank of Canada consists of: Board of Directors, Management Committee and Senior Management.

Board of Directors

The Board of Directors provides the Bank's strategic planning, as well as internal policies on financial accounting matters, risk management, human resources, etc., and oversees the management and administration of the Bank in an overall manner.

Board of Governors and Senior Management

The Board of Governors is the decision-making body of the Bank. It consists of the President, the Executive Vice President, and four Vice Presidents. It is responsible for monetary policy and determines the strategic direction aimed at promoting a sound and stable financial system and the development of banks.

Successive Presidents

Former Governor of the Bank of Canada Mark Carney

President of the Bank of Canada Date of Appointment Time of Exit Name 1September 8, 1934 December 31, 1954 Graham Towers 2January 1, 1955 July 13, 1961 James Coyne 3July 1961 February 1, 1973 Louis Rasminski 4February 1, 1973 February 1, 1987 Gerald Bowie 5February 1, 1987 February 1, 1994 John Crow 6February 1, 1994 January 31, 2001 Gordon Tyson 7February 1, 2001 2008 January 31 David Dodge 8 February 1, 2008 June 1, 2013 Mark Carney 9 June 3, 2013 June 3, 2020 Stephen Poloz 10 June 3, 2020 Incumbent Tiff Macron

Policy Rate

Bank of Canada to Overnight Rate Target as Policy Rate.

Date Overnight Rate Target Change Source March 2, 2022 0.50% + 0.25% April 13, 2022 1.00% + 0.50% June 1, 2022 1.50% + 0.50% July 13, 2022 2.50% + 1.00% September 7, 2022 3.25% + 0.75% October 26, 2022 3.75% + 0.50% December 7, 2022 4.25% + 0.50% January 25, 2023 4.50% + 0.25% June 7, 2023 4.75% + 0.25% June 7, 2023 4.75% + 0.25% July 12, 2023 5.00% + 0.25%