Bank of Canada Act (R.S.C., 1985, c. B-2)

Marginal note:Inspection

• 22.1 (1) The Bank may require that the Superintendent of Financial Institutions perform, for a specified purpose, an inspection of any financial institution within the meaning of the Office of the Superintendent of Financial Institutions Act.

• Marginal note:Costs

  (2) Where an inspection is made under subsection (1), such costs incurred in relation thereto as in the opinion of the Superintendent of Financial Institutions are extraordinary shall be borne by the Bank.

Marginal note:Prohibited business

23 The Bank shall not, except as authorized by this Act,

• (a) engage or have a direct interest in any trade or business whatever;

• (b) purchase, or make loans on the security of, its own shares or the shares or membership shares of any bank, except the Bank for International Settlements;

• (c) lend or make advances on the security of any real property or immovable, except that, in the event of any claims of the Bank being in the opinion of the Board endangered, the Bank may secure itself on any real property, or obtain security on any immovable, of the debtor or any other person liable and may acquire that property, which shall be resold as practicable after the acquisition;

• (d) make loans or advances without security;

• (e) pay interest on any money deposited with the Bank; or

• (f) allow the renewal of maturing bills of exchange, promissory notes or other similar documents purchased or discounted by or pledged to the Bank, except that the Board may make regulations authorizing in special circumstances not more than one renewal of any such bill of exchange, promissory note or other document.

Marginal note:Fiscal agent of Canadian Government

• 24 (1) The Bank shall act as fiscal agent of the Government of Canada.

• Marginal note:Charge for acting

  (1.1) With the consent of the Minister, the Bank may charge for acting as fiscal agent of the Government of Canada.

• Marginal note:To manage public debt

  (2) The Bank, if and when required by the Minister to do so, shall act as agent for the Government of Canada in the payment of interest and principal and generally in respect of the management of the public debt of Canada.

• (2.1) If the Minister may, under any other Act of Parliament that expressly authorizes him or her to do so, lend, at the request of an agent corporation as defined in subsection 83(1) of the Financial Administration Act, money out of the Consolidated Revenue Fund to that corporation on any terms and conditions that he or she may fix, the Minister may authorize the Bank to manage the lending of money to that corporation on his or her behalf, on any terms and conditions that he or she may establish.

• Marginal note:Canadian Government cheques to be paid or negotiated at par

  (3) The Bank shall not make any charge for cashing or negotiating a cheque drawn on the Receiver General or on the account of the Receiver General, or for cashing or negotiating any other instrument issued as authority for the payment of money out of the Consolidated Revenue Fund, or on a cheque drawn in favour of the Government of Canada or any of its departments and tendered for deposit in the Consolidated Revenue Fund.

Marginal note:Definition of financial institution

• 24.1 (1) In this section, financial institution has the same meaning as in section 3 of the Office of the Superintendent of Financial Institutions Act.

• Marginal note:Information requirement

  (2) A financial institution shall provide the Bank with such information as the Bank may require, at such times and in such form as the Bank may require.

• Marginal note:Limitation

  (3) A financial institution shall not be required under subsection (2) to provide the Bank with information about the accounts or affairs of any particular person.

Note Issue and Removal

Marginal note:Sole right of note issue

• 25 (1) The Bank has the sole right to issue notes and those notes shall be a first charge on the assets of the Bank.

• Marginal note:Arrangements for issue and removal

  (2) It is the duty of the Bank to make adequate arrangements for

  • (a) the issue of its notes in Canada and the supply of those notes as required for circulation in Canada; and

  • (b) the removal from circulation in Canada of

    • (i) its notes that are worn or mutilated, and

    • (ii) its notes that are the subject of an order made under paragraph 9(1)(b) of the Currency Act, regardless of whether the order has come into force.

• Marginal note:Denominations

  (3) Notes of the Bank shall be in such denominations and shall be printed and signed or otherwise executed as the Governor in Council by regulation determines.

• Marginal note:Form and material

  (4) The form and material of the notes of the Bank shall be subject to approval by the Minister, but each note shall be printed in both the English and French languages.

• Marginal note:Notes previously printed

  (5) Notwithstanding anything contained in this section, each note of the Bank printed before June 23, 1936, whether issued before, on or after that date, is a valid and binding obligation of the Bank.

• Marginal note:Distinction

  (6) Notes of the Bank are neither promissory notes nor bills of exchange within the meaning of the Bills of Exchange Act.

Redemption of Notes Other than Those of the Bank

Marginal note:Liability for notes

• 26 (1) The Bank is responsible for the redemption of notes payable to bearer on demand that were issued and outstanding on March 11, 1935 and immediately prior to that day constituted a direct liability of Canada, and such notes are and continue to be legal tender.

• Marginal note:Idem

  (2) The Bank is responsible for the redemption of notes of the Canadian banks listed in Schedule R of the Bank Act, chapter B-1 of the Revised Statutes of Canada, 1970, that were issued prior to January 1, 1950 and intended for circulation in Canada.

Reserve Funds

Marginal note:Reserve fund

27 The Bank shall establish a reserve fund and, after making the provision that the Board thinks proper for bad and doubtful debts, depreciation in assets, pension funds and all other matters that are properly provided for by banks, the ascertained surplus available from the operations of the Bank during each financial year is to be applied by the Board as follows:

• (a) if the Bank’s reserve fund is less than the paid-up capital, one third of the surplus is to be allocated to the reserve fund, and the residue is to be paid to the Receiver General and form part of the Consolidated Revenue Fund;

• (b) if the reserve fund is not less than the paid-up capital, one fifth of the surplus is to be allocated to the reserve fund until the reserve fund reaches an amount five times the paid-up capital, and the residue is to be paid to the Receiver General and form part of the Consolidated Revenue Fund; and

• (c) if the reserve fund is not less than five times the paid-up capital, the whole of the surplus is to be paid to the Receiver General and form part of the Consolidated Revenue Fund.

Marginal note:Special reserve fund — unrealized valuation losses

• 27.1 (1) Despite section 27, the Bank may establish a special reserve fund and may, pursuant to a resolution passed by the Board, allocate to the fund out of the ascertained surplus available from the operations of the Bank during each financial year an amount to offset unrealized valuation losses due to changes in the fair value of the investment portfolio of the Bank.

• Marginal note:Maximum

  (2) The amount that may be held in the fund shall not be more than $400,000,000 at any time.

Audit

Marginal note:Appointment of auditors

• 28 (1) The Governor in Council shall, on the recommendation of the Minister, appoint two firms of accountants eligible to be appointed as auditors of a bank to audit the affairs of the Bank.

• Marginal note:Term of office

  (2) Every firm of accountants appointed after November 30, 1980 shall be appointed to perform annual audits for the five fiscal years following the year of its appointment except that one of the first two firms of accountants appointed after November 30, 1980 shall be appointed to perform annual audits for the three years following the year of its appointment.

• Marginal note:Vacancies

  (3) Where any vacancy occurs in the office of auditor of the Bank, notice thereof shall forthwith be given by the Bank to the Minister who thereupon shall appoint some other firm of accountants eligible to be appointed under this section to audit the affairs of the Bank for the balance of the term of the firm of accountants so replaced.

• Marginal note:Persons who may not act

  (4) No firm of accountants of which a director is a member is eligible for appointment as an auditor and no auditor of the Bank is eligible for appointment for a second successive term.

• Marginal note:Reports to Minister

  (5) The Minister may from time to time require the auditors to report to the Minister on the adequacy of the procedure adopted by the Bank for the protection of its creditors or shareholders and the sufficiency of their own procedure in auditing the affairs of the Bank, and the Minister may, at his discretion, enlarge or extend the scope of the audit or direct that any other procedure be established or that any other examination be made by the auditors as the public interest may seem to require.

• Marginal note:Copies of reports to be sent to Minister

  (6) A copy of every report made by the auditors to the Bank under this section shall be transmitted to the Minister by the auditors at the same time as that report is transmitted to the Bank.

Returns

Marginal note:Weekly financial information

• 29 (1) The Bank shall, as soon as practicable after the last business day of each week, post on its website financial information about its assets and liabilities.

• Marginal note:Monthly balance sheet

  (2) The Bank shall, as soon as practicable after the last business day of each month, post on its website its balance sheet as at the close of business on that day. The balance sheet shall set out information regarding the Bank’s investments in securities issued or guaranteed by the Government of Canada.

Marginal note:Fiscal year

• 30 (1) The fiscal year of the Bank shall be the calendar year.

• Marginal note:Financial statements to Minister

  (2) Within two months after the end of each financial year, the Bank shall send to the Minister its audited financial statements for the financial year, in the form prescribed by the by-laws of the Bank.

• Marginal note:Signing of statements

  (2.1) The financial statements must be signed by the Governor or the Deputy Governor and the Chief Accountant or Acting Chief Accountant of the Bank.

• Marginal note:Other information

  (2.2) The financial statements must be accompanied by any summary or report by the Governor that the Governor considers desirable or that is required by the Minister. A copy of the signed and audited financial statements must without delay be published in the Canada Gazette.

• Marginal note:Report to Parliament

  (3) The Minister shall lay the copy of the accounts and Governor’s report mentioned in subsection (2) before Parliament on any of the first twenty-one days that either House of Parliament is sitting after the Minister receives it.

Liability

Marginal note:No liability if in good faith

30.1 No action lies against Her Majesty, the Minister, any officer, employee or director of the Bank or any person acting under the direction of the Governor for anything done or omitted to be done in good faith in the administration or discharge of any powers or duties that under this Act are intended or authorized to be executed or performed.

Offences and Punishment

Marginal note:Holding office when ineligible

31 Every person who holds office or continues to hold office as the Governor or as a Deputy Governor or director of the Bank, knowing that he or she is not eligible for that office, is guilty of an offence and liable on summary conviction to a fine of not more than one hundred thousand dollars or to imprisonment for a term of not more than six months or to both.

Marginal note:Verifying false statement, account or list

32 Every director, officer or auditor of the Bank who verifies any statement, account or list required to be furnished to the Minister pursuant to this Act, or who has to do with the delivering or transmitting of that statement, account or list to the Minister, knowing it to be false in any material particular, is guilty of an offence and liable on summary conviction to a fine of not more than one hundred thousand dollars or to imprisonment for a term of not more than six months or to both.

Marginal note:Contravention of Act

33 Any officer of the Bank or any officer of a bank or any other person who fails or omits to comply with any provision of this Act is guilty of an offence and, unless otherwise provided by this Act, liable on summary conviction to a fine of not more than one hundred thousand dollars or to imprisonment for a term of not more than six months or to both.

Liquidation or Winding-up

Marginal note:Insolvency and winding-up

34 No statute relating to the insolvency or winding-up of any corporation applies to the Bank and in no case shall the affairs of the Bank be wound up unless Parliament so provides, but if provision is made for winding up the Bank the notes of the Bank outstanding are the first charge on the assets.

By-laws

Marginal note:By-laws

• 35 (1) The Board, with the approval of the Governor in Council, may make by-laws with respect to

  • (a) the calling of meetings of the Board and of the Executive Committee and what number of persons shall constitute a quorum in each case, and how questions considered at those meetings shall be determined;

  • (b) the fees of directors;

  • (c) the duties and conduct of officers and employees of the Bank;

  • (d) the form of the annual statement of accounts; and

  • (e) generally, the management and disposition of the stock, property and undertakings of the Bank.

• Marginal note:Publication

  (2) Every by-law and every amendment or repeal thereof shall take effect when published in the Canada Gazette.