Bank of Canada Act

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.