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

Short Title

Marginal note:Short title

1 This Act may be cited as the Bank of Canada Act.

Interpretation

Marginal note:Definitions

2 In this Act,

authorized foreign bank

authorized foreign bank has the meaning assigned to that expression by section 2 of the Bank Act; (banque étrangère autorisée)

Bank

Bank means the Bank of Canada; (Banque)

bank

bank means a bank listed in Schedule I or II to the Bank Act; (banque)

Board

Board or Board of Directors means the Board of Directors of the Bank; (conseil)

Deputy Governor

Deputy Governor in sections 5, 6, 8, 13, 15, 30 and 31 means the Deputy Governor appointed under section 6; (sous-gouverneur)

director

director means a member of the Board of Directors other than the Governor or the Deputy Governor or the member acting by virtue of subsection 5(2); (administrateur)

Governor

Governor means the Governor of the Bank or the person acting for the Governor pursuant to this Act; (gouverneur)

Minister

Minister means the Minister of Finance; (ministre)

notes

notes means notes intended for circulation in Canada. (billets)

Constitution of the Bank

Marginal note:Bank constituted

• 3 (1) There is hereby established a bank to be called the Bank of Canada.

• Marginal note:Body corporate

  (2) The Bank is a body corporate.

Marginal note:Head office

• 4 (1) The head office of the Bank shall be in the city of Ottawa.

• Marginal note:Branches and agencies

  (2) The Bank may establish branches and agencies and appoint agents or mandataries in Canada and may also, with the approval of the Governor in Council, establish branches and appoint agents or mandataries elsewhere than in Canada.

Management

Marginal note:Board of Directors

• 5 (1) The Bank shall be under the management of a Board of Directors composed of a Governor, a Deputy Governor and twelve directors appointed in accordance with this Act.

• Marginal note:Deputy Minister of Finance to be member of Board

  (2) In addition to the members of the Board as constituted by subsection (1), the Deputy Minister of Finance or, if he or she is absent or unable to act or the office is vacant, such other officer of the Department of Finance as the Minister may nominate, is a member of the Board but does not have the right to vote.

Marginal note:Governor and Deputy Governor

• 6 (1) The Governor and Deputy Governor shall be appointed by the directors with the approval of the Governor in Council.

• Marginal note:Qualifications

  (2) The Governor and Deputy Governor shall be persons of proven financial experience and shall devote the whole of their time to the duties of their offices under this Act or any other Act of Parliament.

• Marginal note:Tenure and remuneration

  (3) The Governor and Deputy Governor

  • (a) shall each be appointed for a term of seven years during good behaviour;

  • (b) are eligible for re-appointment on the expiration of their terms of office; and

  • (c) subject to the approval of the Governor in Council, shall be paid such salaries as the directors determine, but no such remuneration shall be in the form of a commission or be computed by reference to the income or profits of the Bank.

• Marginal note:Disqualifications

  (4) No person is eligible to be appointed or to continue as Governor or Deputy Governor who

  • (a) is not a Canadian citizen;

  • (b) is a member of the Senate or House of Commons or a member of a provincial legislature;

  • (c) is employed in any capacity in the federal public administration or the public service of a province or holds any office or position for which any salary or other remuneration is payable out of public moneys; or

  • (d) except as authorized by or under any Act of Parliament, is a director, partner, officer, employee or shareholder of

    • (i) a member of the Canadian Payments Association,

    • (ii) a clearing house or participant, as defined in section 2 of the Payment Clearing and Settlement Act,

    • (iii) an investment dealer that acts as a primary distributor of new Government of Canada securities, or

    • (iv) an institution that controls or is controlled by an institution referred to in any of subparagraphs (i) to (iii).

  • (e) [Repealed, 2007, c. 6, s. 392]

• Marginal note:Prohibitions — federal credit union

  (5) Neither the Governor nor the Deputy Governor shall

  • (a) directly or indirectly hold any interest or right in membership shares of a federal credit union, within the meaning of section 2 of the Bank Act, in excess of the minimum number of membership shares of the federal credit union that is required for membership; or

  • (b) exercise any right he or she has as a member of such a federal credit union, except any right that he or she has as a customer of the federal credit union.

Marginal note:Additional Deputy Governors

• 7 (1) The Board may appoint one or more additional Deputy Governors who shall perform such duties as are assigned to them by the Board.

• Marginal note:Not members of Board

  (2) A Deputy Governor appointed under this section is not a member of the Board.

Marginal note:Powers of Governor

• 8 (1) The Governor of the Bank is the chief executive officer of the Bank and on behalf of the Board has the direction and control of the business of the Bank with authority to act in connection with the conduct of the business of the Bank in all matters that are not by this Act or by the by-laws of the Bank specifically reserved to be done by the Board or by the Executive Committee.

• Marginal note:Absence, etc., of Governor

  (2) If the Governor is absent or unable to act or the office is vacant, the Deputy Governor has all the powers and functions of the Governor.

• Marginal note:Absence, etc., of Governor and Deputy

  (3) The Board may authorize one of the directors or one of the persons appointed under section 7 to act as the Governor in the event that the Governor and Deputy Governor are absent or unable to act or the offices are vacant, but no such person has authority to act as Governor for a period exceeding one month without the approval of the Governor in Council.

Marginal note:Directors

• 9 (1) The Minister, with the approval of the Governor in Council, shall appoint directors to hold office, during good behaviour, subject to removal by the Governor in Council at any time for cause, to replace the directors whose terms of office have expired. The term of a director begins on the day he or she is appointed and ends immediately before March 1 of the year that is three years after the year in which the term of office of the director’s predecessor expired.

• Marginal note:Continuation in office

  (1.1) If, on the expiry of a director’s term of office, no new director is appointed, the director whose term of office expired may continue in office until a director is appointed under subsection (1).

• Marginal note:Vacancy

  (2) If a person ceases to be a director during the term for which he or she was appointed, the Minister shall, with the approval of the Governor in Council, appoint a qualified person to hold office for the remainder of the term.

• Marginal note:Votes

  (3) In the transaction of the business of the Bank, each director has one vote.

• Marginal note:Re-appointment

  (4) A director on the expiration of the director’s term of office is eligible for re-appointment.

Marginal note:Selection of directors

• 10 (1) The directors shall be selected from various occupations.

• Marginal note:Ineligible persons

  (2) No person is eligible to be appointed or to continue as a director if the person is a director, a partner, an officer or an employee of any of the following institutions:

  • (a) a direct clearer as defined in the by-laws of the Canadian Payments Association;

  • (b) a clearing house of a clearing and settlement system designated under subsection 4(1) of the Payment Clearing and Settlement Act;

  • (c) a participant in the Large Value Transfer System, or its successor, operated by the Canadian Payments Association;

  • (d) an investment dealer that acts as a distributor of new Government of Canada securities; or

  • (e) an institution that controls, or is controlled by, an institution referred to in any of paragraphs (a) to (d).

• Marginal note:Control

  (2.1) For the purpose of paragraph (2)(e),

  • (a) an institution controls a body corporate if securities of the body corporate to which are attached more than fifty per cent of the votes that may be cast to elect directors of the body corporate are beneficially owned by the institution and the votes attached to those securities are sufficient, if exercised, to elect a majority of the directors of the body corporate;

  • (b) an institution controls a trust, fund or partnership (other than a limited partnership) or an unincorporated association or organization, if more than fifty per cent of the ownership interests, however designated, into which the trust, fund, partnership, association or organization is divided are beneficially owned by the institution and the institution is able to direct the business and affairs of the trust, fund, partnership, association or organization; and

  • (c) the general partner of a limited partnership controls the limited partnership.

• Marginal note:Restriction on share ownership

  (3) Any person who beneficially owns a share in an institution referred to in any of paragraphs (2)(a) to (e) at the time of being appointed director of the Bank shall dispose of that beneficial ownership interest within three months after the appointment. A director of the Bank shall not otherwise beneficially own a share of an institution referred to in any of those paragraphs.

• Marginal note:Restriction — membership shares of federal credit union

  (3.1) If a federal credit union is an institution referred to in any of paragraph (2)(a) to (e), any person who, at the time of being appointed director of the Bank, directly or indirectly holds any interest or right in more than the minimum number of membership shares of the federal credit union, within the meaning of section 2 of the Bank Act, that is required for membership shall, within three months after the appointment, dispose of all membership shares that exceed that minimum number.

• Marginal note:Restriction — rights of members

  (3.2) If a federal credit union is an institution referred to in any of paragraph (2)(a) to (e), no director of the Bank who is a member of a federal credit union, within the meaning of section 2 of the Bank Act, shall exercise any right that the director has as a member of the federal credit union, except any right that the director has as a customer of the federal credit union.

• Marginal note:Disqualifications

  (4) No person is eligible to be appointed or to continue as director who

  • (a) is not a Canadian citizen ordinarily resident in Canada; or

  • (b) is employed, on a full-time basis, in any capacity in the federal public administration or the public service of a province or holds any office or position, other than as a part-time member of any board or advisory body of an agency or department of the government of Canada or a province, for which any salary or other remuneration is payable out of public moneys, except that a director may perform temporary services for the government of Canada or a province for which that director may be reimbursed actual travel and living expenses.

  • (c) [Repealed, 2007, c. 6, s. 393]

• (5) [Repealed, 2001, c. 9, s. 190]

Marginal note:Disclosure of conflict

• 10.1 (1) A director shall disclose to the Bank, in writing or by requesting to have it entered in the minutes of a meeting of the Board, the nature and extent of the director’s interest if the director

  • (a) is a party to a material contract or transaction, or proposed material contract or transaction, with the Bank;

  • (b) is a director or an officer of, or has a material interest in, any person who is a party to a material contract or transaction, or proposed material contract or transaction, with the Bank;

  • (c) is or is likely to be materially affected by any action taken or proposed to be taken by the Bank or the Governor under the Payment Clearing and Settlement Act; or

  • (d) is a director or an officer of, or has a material interest in, any person who is or is likely to be materially affected by any action taken or proposed to be taken by the Bank or the Governor under the Payment Clearing and Settlement Act.

• Marginal note:Time of disclosure

  (2) The disclosure shall be made as soon as the director becomes aware of the contract, transaction or action.

• Marginal note:Restriction on voting

  (3) A director who is required to make a disclosure shall not vote on any resolution to approve the contract, transaction or action, unless it relates to directors’ fees.

• Marginal note:Continuing disclosure

  (4) For the purpose of this section, a general notice to the Board by a director, declaring that he or she is a director or officer of or has a material interest in a person, and that he or she is to be regarded as interested in a contract or transaction entered into with that person or an action that affects that person, is a sufficient declaration of interest in relation to a contract or transaction with that person or action that affects that person.