The Bank of Canada is Canada’s central bank. It conducts monetary policy to keep inflation low and stable, promotes a safe and efficient financial system, issues Canadian bank notes, and provides funds-management services to the Government of Canada and other clients. The Bank is a Crown corporation, publicly owned and operationally independent within its mandate.
| Type | Central bank • Crown corporation (publicly owned) |
|---|---|
| Established | 1934 (operations began 1935) |
| Primary objective | Low, stable inflation and a well-functioning financial system |
| Policy target | 2% inflation (midpoint of a 1–3% control range) |
| Main instrument | Target for the overnight interest rate (policy rate) |
| Headquarters | 234 Wellington Street, Ottawa, Ontario (Bank of Canada complex & Museum) |
| Governance | Governing Council (Governor, Senior Deputy Governor, Deputy Governors) with oversight by a Board of Directors |
| Official site | bankofcanada.ca |
Mandate and core functions
The Bank’s work is organized around four pillars:
- Monetary policy — Sets the target for the overnight interest rate to keep inflation at the 2% midpoint within a 1–3% control range.
- Financial system — Promotes the stability and efficiency of Canada’s financial system; provides liquidity to the system when warranted and oversees key financial market infrastructures.
- Currency — Designs, issues, and distributes secure polymer bank notes and works with law-enforcement and retailers to deter counterfeiting.
- Funds management — Manages the Government of Canada’s cash balances, public debt program operations, and Canada’s official international reserves (with the Department of Finance).
Monetary policy framework
Canada’s inflation-control target is jointly renewed by the Government of Canada and the Bank on a regular cycle. The Bank steers short-term money-market conditions by setting a target for the overnight rate and operating a corridor system using the Bank Rate (upper bound) and deposit rate (lower bound). When conventional policy is not sufficient, the Bank may use extraordinary measures such as large-scale asset purchases or term liquidity facilities.
Communications and schedule
- The Bank announces its policy rate on eight fixed dates per year.
- A detailed Monetary Policy Report (MPR) with projections is typically published four times a year alongside selected rate decisions.
- Speeches, press conferences, and staff research papers explain analysis and decisions.
Financial system role
The Bank monitors systemic risks (e.g., market liquidity, funding stress, cyber threats) and works with domestic and international partners on standards and crisis preparedness. It acts as lender of last resort to solvent financial institutions facing exceptional liquidity needs and provides routine standing liquidity facilities to settlement participants.
Payments, clearing, and settlement
The Bank oversees systemically important and prominent payment, clearing, and settlement systems to help ensure they meet high resilience and risk-management standards. Under federal legislation, the Bank also administers the framework for the supervision of certain retail payment service providers.
Currency (bank notes)
The Bank issues Canada’s polymer bank-note series, which incorporates advanced security features (transparent windows, raised ink, holographic elements) and durable substrates. It researches accessibility features, counterfeit deterrence, and environmentally responsible design, and operates the Bank of Canada Museum to support public education about money and the economy.
Funds management
On behalf of the Government of Canada, the Bank:
- Executes domestic debt operations (treasury bills and marketable bonds) and supports a well-functioning market.
- Manages daily cash and invests the Exchange Fund Account (Canada’s foreign-exchange reserves) within defined risk parameters.
- Provides banking and custodial services to certain public bodies.
Governance and independence
The Bank is a Crown corporation wholly owned by the federal government but operates at arm’s length.
- Governing Council sets monetary policy and strategic direction for core functions.
- A Board of Directors (largely non-executive) provides corporate governance and oversight of administration; it does not set monetary policy.
- The Governor and Senior Deputy Governor are appointed for fixed terms. The Bank reports to Parliament through the Minister of Finance and publishes audited financial statements and plans.
History (brief)
- 1934–35: Bank of Canada Act establishes the central bank; operations begin in 1935.
- 1950s–1990s: Development of modern monetary policy tools; expansion of economic research and market operations.
- 1991: Adoption of explicit inflation-control targeting (1–3% range, 2% midpoint), renewed on a regular cycle.
- 2008–09 and 2020–21: Extraordinary liquidity and asset-purchase programs deployed during global financial stresses and the pandemic.
- 2010s–present: Polymer bank-note series; enhanced financial-system oversight; modernization of payments and data/analytics.
Research, data and education
The Bank produces analysis on inflation, labour markets, financial stability, digital finance and payments, climate-related financial risks, and productivity. It publishes working papers, staff analytical notes, high-frequency indicators, and educational resources for students and teachers.
Visiting and the Museum
The Bank of Canada Museum—located within the Bank’s Ottawa complex—offers exhibits on money, inflation, and the economy, with a large numismatic collection and interactive displays.
See also
- Economy of Canada • Canadian dollar • Inflation in Canada • Government of Canada
- Public safety in Canada • Emergency management in Canada • Statistics Canada
External links (official)
- Bank of Canada — Home: https://www.bankofcanada.ca/
- Monetary policy — Fixed announcement dates & MPR: https://www.bankofcanada.ca/rates/interest-rates/
- Bank notes & anti-counterfeiting: https://www.bankofcanada.ca/banknotes/
- Financial system & payment systems oversight: https://www.bankofcanada.ca/financial-system/
- Funds management & market operations: https://www.bankofcanada.ca/markets/
- Bank of Canada Museum: https://www.bankofcanadamuseum.ca/