Official launch on December 6th, 2018 at the Bank of Canada Museum in Ottawa. Click here to view photos of the event.

THE GOVERNORS OF THE BANK OF CANADA
from 1875 to the present

Jean Chevrier, Gerald G. Gummersell & D. L. Daigneault, Editors

ISBN 978-1-987832-16-7
$29.95 (taxes included)

Foreword
The Bank of Canada

James Powell
Former chief of the Bank of Canada’s International Department
and author of A History of the Canadian Dollar.

The Bank of Canada is Canada’s central bank. It is one of our most important national institutions. Its mandate, given to it by Parliament and set out in the Bank of Canada Act, is “to regulate credit and currency in the best interest of the economic life of the nation, to control and protect the external value of the national monetary unit and to mitigate by its influence fluctuations in the general level of production, trade, prices and employment, so far as may be possible within the scope of monetary action.” The Bank is also charged more generally “to promote the economic and financial welfare of Canada.” The central bank’s actions with respect to interest rates, our currency and the financial system affect the lives of all Canadians, both directly and indirectly. Its most visible product, bank­notes, is literally the money in our pockets.

The Bank was established during the depth of the Great Depression by the Conservative government of R. B. Bennett following a recommendation of a Royal Commission on Banking and Currency headed by Lord Macmillan, an eminent British jurist. At the time, there was widespread criticism of both the chartered banks and the Canadian financial system. The creation of a central bank was seen as a way to help alleviate the economic crisis in Canada fuelled by the global slump in demand and drought in the prairies.

Prior to this time, Canada had made do without an official central bank. The chartered banks provided credit to a largely rural population through their widespread branch networks. They also issued most of the banknotes in circulation. Through the nineteenth and early twentieth centuries, the Bank of Montreal, which was the single-most important financial institution in Canada, assumed some the activities typically associated with a central bank. Most importantly, it acted as financial agent for the federal government, both domestically and internationally, as well as for provinces and municipalities. In many respects, the Bank of Montreal became Canada’s banker. It was associated with the financing of this country’s great projects of the era, such as building the Canadian Pacific Railway during the 1880s. Notwithstanding the central role that the Bank of Montreal played in Canadian financial life, there was little scope for active monetary policy during these years. This changed when the Bank of Canada opened for business in March 1935 under the leadership of its first Governor, Graham Towers.

From opening day, the Bank of Canada immediately assumed responsibility for monetary policy and took over other central banking functions previously carried out by government departments. It also began issuing Canada’s banknotes. Currency issued by the chartered banks was slowly phased out. As well, the Bank began acting as advisor to the government on economic and financial issues, and later took responsibility for managing the government’s debt.

Initially, the Bank of Canada was a widely held private institution. The Government of the day believed a privately owned central bank would be freer from political interference than a publicly owned institution. At that time, most of the world’s central banks were privately owned. After the election of a Liberal government under William Lyon Mackenzie King in 1936, the Bank of Canada was nationalized.

The economic and financial environment in which the Bank of Canada operates has changed dramatically over the decades. But the mandate given to the central bank by Parliament in the mid-1930s continues to be as relevant now as it was more than eighty years ago. Today, the Bank preserves the domestic purchasing power of our currency by keeping inflation low, stable and predictable. Inflation control is not viewed as an end in itself, but the contribution the central bank can make toward sustained economic growth and a high level of employment. As the sole supplier of Canada’s banknotes, the Bank meets the public’s demand for currency and keeps our money secure from counterfeiting. As the government’s banker or fiscal agent, it manages foreign exchange reserves and the Canadian dollar accounts of the federal Receiver General through which flow all government’s receipts and payments. It also acts on the government’s behalf with respect to issues of marketable debt as well as retail debt instruments. Finally, since a healthy financial system is vital for a healthy economy, the Bank fosters a stable and efficient financial system, which includes financial institutions, such as banks and credit unions, financial markets, and payment and settle­ment systems.

Since what happens abroad can affect Canada, the Bank of Canada also cooperates with other central banks, foreign governments and international financial institutions such as the International Monetary Fund in Washington, D.C., and the Bank for International Settlements in Basel, Switzerland to promote a robust, global economic and financial system.

Today, the Bank of Canada is recognized as one of the world’s leading central banks. In 2018, Central Banking, a London-based journal, named the Bank of Canada as the central bank of the year. It wrote: “The Canadian central bank has stood out for its ever-improving levels of transparency, forward-looking management and best-practice review of its policy mandate… [It] represents something of a benchmark for a modern-day, operationally independent central bank.” The Bank’s success is a testament to the economic and financial acumen of the Bank’s staff and the strong leadership of successive governors.

Authors

Steve Ambler (David Allison Dodge) is a professor of economics at the Université du Québec in Montréal. A past president of the Société canadienne de science économique and a former secretary-treasurer of the Canadian Economics Association, he holds the David Dodge Chair in Monetary Policy at the C. D. Howe Institute.

Anita Anand (Stephen J. Poloz) is the J. R. Kimber Chair in Investor Protection and Corporate Governance at the University of Toronto. She was a Visiting Scholar at the Bank of Canada in 2009-2010.

Mark S. Bonham (Mark Carney) is a senior fellow at Massey College, University of Toronto, and a contributing financial editor to The Canadian Encyclopedia.  He was listed by The Financial Times of London (UK) as one of the top 100 outstanding global business leaders in 2017.

Tim Kennish (John Crow) is a retired partner and former co-chair of the Osler, Hoskin & Harcourt law firm where he practiced in the areas of competition and corporate law.

C. Ian Kyer (Gerald Keith Bouey; Gordon G. Thiessen), PhD in medieval history, is an historian who became a lawyer and now writes Canadian legal and business history. He is the author of Next Best to World Class: The people and events that shaped the Canada Deposit Insurance Corporation.

Allan Levine (Louis Rasminsky) is a Winnipeg historian and writer and the author of 15 books. His most recent is Seeking the Fabled City: The Canadian Jewish Experience, published in 2018.

Joe Martin (Graham Ford Towers) is President of the Canadian Business History Association, Director of the Canadian Business History Initiative at the Rotman School of Management as well as President Emeritus of Canada’s History Society.

James Powell (Foreword; James Coyne) is a retired, senior central banker and the author or co-author of a number of books on Canadian economic history and central banking including The Bank of Canada of James Elliot Coyne: Challenges, Confrontation, and Change.