Enacted by Parliament of Canada Date commenced March 1935 | Date assented to July 3, 1934 | |
 | ||
Introduced by 1933 Royal Commission on Banking and Currency | ||
The Bank of Canada Act is a statute that sets out the governance structure and powers of the Bank of Canada, which was created in 1934 as Canada’s central bank.
Prior to 1934, Canada had no central bank and fragmented control of the banking system.
The Canadian Bankers Association took the role of regulating the bank system since 1891 and the Bank of Montreal was the government's banker.
It was initially a private bank and became a government-owned corporation in 1938.
Amendments to the act allowed the Bank of Canada to divide the capital of the bank into one hundred thousand shares of a value of fifty dollars each, which were issued to the Minister of Finance to be held on behalf of Her Majesty in right of Canada. .
The Bank of Canada is given considerable independence in the conduct of its business through provisions in the Act which set out its powers as permissive ("may") rather than instructive ("shall"), and through a provision that makes it extremely difficult to remove its governor during his or her seven-year term.
The Act requires all banknotes of the Canadian dollar to be approved by the Minister of Finance for "form and material".