About the Bank

What the Bank Does

The Bank of Canada is the nation's central bank. Its principal role is "to promote the economic and financial welfare of Canada," as defined in the Bank of Canada Act. The Bank’s four main areas of responsibility are:

• Monetary policy: The Bank influences the supply of money circulating in the economy, using its monetary policy framework to keep inflation low and stable.
• Financial system: The Bank promotes safe, sound and efficient financial systems, within Canada and internationally, and conducts transactions in financial markets in support of these objectives.
• Currency: The Bank designs, issues and distributes Canada’s bank notes.
• Funds management: The Bank is the "fiscal agent" for the Government of Canada, managing its public debt programs and foreign exchange reserves.

Read more about how the Bank works through its core functions.

The Governing Council

The Bank of Canada is led by the Governing Council, the policy-making body of the Bank, which is responsible for:

• the conduct of monetary policy
• promoting a safe and efficient financial system
• charting the strategic direction of the Bank

The Governing Council is made up of the Governor, the Senior Deputy Governor and four Deputy Governors.

The Governing Council's main tool for implementing monetary policy is the target for the overnight rate (also known as the key policy rate). This rate is normally set on eight fixed announcement dates per year. The Council arrives at its decisions about the rate by consensus, rather than by individual votes, as is the case at some other central banks.

See who is on Governing Council and the Bank's Senior Management.

The Governor

As the Bank’s Chief Executive Officer, the Governor ultimately has full control over the business of the Bank. His responsibilities include:

• chairing the Board of Directors;
• leading the Bank’s Governing Council; and
• conducting monetary policy to achieve an inflation target agreed upon by the Bank and the Government of Canada.

The Governor and the Senior Deputy Governor are appointed by the independent directors with the approval of the Governor in Council (the federal Cabinet) for a seven-year term. This allows the Governor to adopt the medium- and longer-term perspective essential to conducting effective monetary policy.

The Senior Deputy Governor

The Senior Deputy Governor is the deputy executive of the Bank of Canada. She:

• oversees the Bank’s strategic planning and operations;
• shares responsibility for the conduct of monetary policy as a member of the Bank’s Governing Council; and
• is a member of the Bank’s Board of Directors.

The Board of Directors

The Board of Directors is appointed by the Minister of Finance for a three-year term, subject to the approval of the Governor in Council. It is composed of the Governor, the Senior Deputy Governor, 12 outside directors and the Deputy Minister of Finance (who has no vote). Their responsibilities include:

• providing general oversight of the management and administration of the Bank
• reviewing the Bank's general policies (on matters other than monetary policy and for approving the Bank's corporate objectives, plans and annual budget)
• keeping the Bank informed about prevailing economic conditions in their respective regions
• appointing the Governor and Senior Deputy Governor

Monetary policy is neither formulated nor implemented by the outside directors.

See who is on the Board of Directors.

Bank of Canada organization chart

Canada’s central bank was founded in 1934 and opened its doors in March 1935. In 1938, it 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. The Bank still exists "to regulate credit and currency in the best interests of the economic life of the nation."

Find out more about the Bank’s past, how it has worked and who shaped it in the history section.