Bank of Canada
About the Bank
Frequently Asked Questions
The Bank's roles
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1. What is the Bank of Canada?
The Bank of Canada is the country's central bank. Its role, as defined in the original Bank of Canada Act of 1934, is "to promote the economic and financial welfare of Canada."
2. Can I open an account at your bank?
No. The Bank of Canada is not a commercial institution. It does not provide regular banking services, nor does it accept deposits from the general public. Its clientele are the federal government, other central banks, commercial banks and certain other financial institutions.
For information on commercial banks in Canada, see the Canadian Bankers Association.
3. Who owns the Bank of Canada?
The Bank was founded in 1934 as a privately owned corporation. In 1938, the Bank became a Crown corporation belonging to the federal government. Since that time, the Minister of Finance has held the entire share capital issued by the Bank.
4. Is the Bank of Canada a government department?
No, it is a special type of Crown corporation. The Bank has considerable autonomy to carry out its responsibilities.
5. Why do we need a central bank?
The Bank of Canada was created to be the sole issuer of bank notes and to facilitate management of the country's financial system.
Having an independent monetary institution allows for the separation of the power to spend money from the power to create money.
Separating the central bank from the political process enables it to adopt the medium- and long-term perspectives essential to conducting effective monetary policy.
6. What does the Bank do?
The Bank of Canada is responsible for:
- Monetary Policy
The goal of monetary policy is to contribute to solid economic performance and rising living standards for Canadians by keeping inflation low, stable, and predictable. - Bank Notes
The Bank issues Canada's bank notes and is responsible for their design (and anti-counterfeiting features), distribution, and replacement. - Financial System
The Bank actively promotes safe, sound, and efficient financial system, both within Canada and internationally. - Funds Management
The Bank of Canada provides high-quality, effective, and efficient funds-management services for the government, the Bank and other clients.
7. Can I file a complaint with the Bank of Canada regarding a bank?
No. The Bank of Canada does not play any part in the regulation or daily administration of commercial banks. To file such a complaint, contact the Office of the Superintendent of Financial Institutions.
8. How does the Bank of Canada pay its operating expenses?
The revenues generated by the Bank each year greatly exceed its operating expenses.
The revenues derive from the Bank of Canada's role as the issuer of bank notes to Canada's financial institutions. Institutions pay the Bank when they withdraw bank notes from it. The Bank then invests these funds in government bonds and treasury bills. The interest earned on these investments is the Bank's main source of revenue.
The difference between the interest the Bank earns and its operating expenses is its net profit, which is given to the federal government. In recent years this profit has averaged about $1.7 billion annually.
This process, whereby a central bank earns revenue in exchange for its role as the issuer of a country's currency, is called seigniorage.