About the Bank
Frequently Asked Questions
The Bank's management
- Board of Directors
- 1. What is the role of the Board of Directors?
2. How are the directors appointed?
3. What are the directors paid?
- Governor and Senior Deputy Governor
- 4. What is the role of the Governor?
5. How is the Governor appointed?
6. Who can be appointed Governor?
7. Can the government dismiss the Governor?
8. Why is the Governor appointed for seven years?
9. What are the salaries of the Governor and the Senior Deputy Governor and how are they determined?
1. What is the role of the Board of Directors?
The Board of Directors must ensure that the Bank is managed competently.
The Board is responsible for reviewing the Bank's general policies on matters other than monetary policy and for approving the Bank's corporate objectives, plans and annual budget.
The Board of Directors includes the Governor, the Senior Deputy Governor, twelve outside directors and the Deputy Minister of Finance (who has no vote).
Monetary policy is neither formulated nor implemented by the outside directors. In this area, the directors' job is to keep the Bank informed about prevailing economic conditions in their respective regions.
The directors are also responsible for appointing the Governor and Senior Deputy Governor.
2. How are the directors appointed?
The Minister of Finance appoints directors to fill vacant seats on the Board for a three-year term, subject to the approval of the Governor in Council (the Cabinet).
3. What are the directors paid?
Each director is paid:
- an annual retainer of $7,300-$8,600
- a per diem of $565-$665 for each day he or she attends a Board or Committee meeting as well as for each additional day of travel to or from a meeting
Each director who is also member of the Executive Committee is in addition paid an annual retainer of $2,600-$3,500.
In addition, each director is paid a per diem of $565-$665 for each day he or she is, at the request of the Bank, engaged in special work for the Bank outside services ordinarily required of a director.
4. What is the role of the Governor?
The Governor of the Bank of Canada performs the same role as the president of a corporation. He or she is the Bank's chief executive officer, and, as such, has control and full authority over the business of the Bank. The Governor also presides over the Board of Directors.
5. How is the Governor appointed?
The Governor, like the Senior Deputy Governor, is appointed by the outside directors with the approval of the Governor in Council (the Cabinet) for a term of seven years.
6. Who can be appointed Governor?
The Governor of a country's central bank must have a thorough understanding of financial markets and the economy and possess wide experience in international finance.
There are eligibility requirements laid down in the Bank of Canada Act, which stipulate that the Governor must:
- be a Canadian citizen
- be under 75 years of age
- not be a member of the Senate or the House of Commons, nor of a provincial legislature
- not be employed by the federal or provincial public service
- not be a director, partner, officer, employee or shareholder of any bank or other financial institution
7. Can the government dismiss the Governor of the Bank?
The Governor is appointed for a term of seven years, and cannot be relieved of his or her duties at the whim of the government.
If a profound disagreement were to occur, the Minister of Finance, with the Cabinet's authorization, could issue a written directive to the Governor specifying a change in policy. This would most likely result in the resignation of the Governor. In the absence of a directive, the Governor has the entire responsibility for monetary policy.
8. Why is the Governor appointed for seven years?
Giving the Governor a seven-year mandate allows him or her to adopt the medium and long-term perspective essential to conducting effective monetary policy. This decision was made in 1934 when the Bank of Canada Act was passed.
9. What are the salaries of the Governor and the Senior Deputy Governor and how are they determined?
The salary range for the Governor is $336,600 to $396,000; for the Senior Deputy Governor, it is $235,600 to $277,200. The directors set the salaries of the Governor and the Senior Deputy Governor within preset ranges, subject to the approval of the Governor in Council (the Cabinet).
The salary ranges are set by a Public Service advisory group, including members of the private sector, that recommends the pay range for senior officials and officers of Crown corporations. They take into account the qualifications required for that position and compare it with similar positions in the private sector, among other things.