Regulations Amending the Bank of Canada Notes Regulations: SOR/2019-256
Canada Gazette, Part II, Volume 153, Number 14
SOR/2019-256 June 25, 2019
BANK OF CANADA ACT
P.C. 2019-923 June 22, 2019
Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 25(3) footnote a of the Bank of Canada Act footnote b, makes the annexed Regulations Amending the Bank of Canada Notes Regulations.
Regulations Amending the Bank of Canada Notes Regulations
1 Section 3 of the Bank of Canada Notes Regulations footnote 1 is replaced by the following:
3 The notes referred to in section 2 shall bear facsimiles of the signatures of the Governor in office at the time the notes are printed and of the Deputy Governor appointed under subsection 6(1) of the Bank of Canada Act in office at the time the notes are printed, or in the event that the Deputy Governor is absent or unable to act or the Deputy Governor’s office is vacant, the signature of an additional Deputy Governor appointed under subsection 7(1) of that Act.
Coming into Force
2 These Regulations come into force on the day on which they are registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Section 3 of the Bank of Canada Notes Regulations requires that Canadian bank notes bear facsimiles footnote 2 of the signatures of both the Governor of the Bank of Canada and the Deputy Governor of the Bank of Canada footnote 3 who are in office at the time the notes are printed. If the Governor is absent or unable to act, a facsimile signature of the Deputy Governor may appear in the place of the Governor’s signature and act as its replacement. footnote 4 However, if the Deputy Governor is absent or otherwise unable to act, neither the Bank of Canada Act nor the Bank of Canada Notes Regulations permit an alternative signature to appear on bank notes as a replacement for the Deputy Governor’s signature.
Since bank notes must bear facsimiles of the signatures of the Governor and the Deputy Governor, delaying a scheduled print run until a new Deputy Governor is appointed or the current Deputy Governor is able to act could result in an insufficient supply of bank notes.
The Bank of Canada Notes Regulations (the Regulations) require that facsimiles of the signatures of the Governor and the Deputy Governor of the Bank of Canada who are in office at the time a bank note is printed appear on each note. However, the Regulations do not provide a contingency plan for a vacancy or incapacity of the Deputy Governor. If a scheduled printing for bank notes coincides with a period when that office is vacant, the printing would need to be rescheduled. In this case, the Bank of Canada would be exposed to the contingent risk of having to incur substantial costs to reschedule one or more print runs for bank notes.
While it has never occurred, the Bank of Canada previously identified this issue as a potential impediment to bank note production in 2013 in conjunction with the appointment of the current Governor. Theoretically, the issue may arise again as the Bank of Canada prepares for the appointment of a new Governor in 2020 and a potential change in the individual holding the office of Deputy Governor or a vacancy in the office. Any such vacancy could mean that bank notes are prevented from being printed on time.
The objective of this amendment is to allow an additional deputy governor’s signature to appear in the place of the Deputy Governor’s if that office is vacant. This would eliminate the risk that arises when the position of the Deputy Governor is vacant or if the individual appointed to this position is unable to act, forcing the Bank of Canada to delay any scheduled print runs of Canadian bank notes until a new Deputy Governor is appointed or the current Deputy Governor is able to act. Such a delay could result in an insufficient supply of bank notes, as well as the Bank of Canada incurring additional costs in the hundreds of thousands of dollars.
Section 3 of the Bank of Canada Notes Regulations is amended to provide that, if the office of the Deputy Governor of the Bank of Canada is vacant, the second required facsimile signature that must appear on every newly printed Canadian bank note may be the facsimile signature of one of the additional deputy governors appointed by the Bank of Canada’s Board of Directors under subsection 7(1) of the Bank of Canada Act. The Act does not specify how many deputies are to be appointed; there are currently four.
The Bank of Canada, which requested this amendment, and the Canadian Bank Note Company (the company that prints Canadian bank notes) are the only stakeholders affected by this amendment. The amendment is not expected to have any business or financial impact on either the Bank of Canada or the Canadian Bank Note Company.
Modern treaty obligations and Indigenous engagement and consultation
No impacts have been identified with respect to the Government’s obligations in relation to Indigenous rights protected by section 35 of the Constitution Act, 1982, or its modern treaty obligations.
Authorizing an alternate to the Deputy Governor’s facsimile signature on Canadian bank notes can only be achieved through a regulatory amendment because the requirements for Canadian bank notes are prescribed in the Regulations. Therefore, there is no other delegated instrument or authority that could be relied on (e.g. policy or directive) to achieve this objective.
Costs and benefits
There are no costs associated with this amendment for the Government of Canada, businesses, or Canadians.
This amendment makes a minor technical change to the Regulations to address a contingent risk that could occur when the office of the Deputy Governor of the Bank of Canada is vacant or the Deputy Governor is not able to act in his or her position. The amendment eliminates this risk, and only impacts internal Bank of Canada operations.
The amendment lowers the risk of the Bank of Canada incurring hundreds of thousands of dollars in costs from having to reschedule one or more scheduled print runs of bank notes. A stable supply of bank notes is necessary to ensure that Canadian businesses and the broader economy are able to operate. Similarly, the supply of bank notes available to the public is vital to the maintenance of the money supply in Canada. Without enough bank notes in circulation, economic activity in general could slow, and the ability of Canadians to conduct cash transactions could be substantially negatively impacted.
Small business lens
The small business lens does not apply to these amendments, as they would not impose costs on small businesses.
The “One-for-One” Rule does not apply to these amendments, as there is no change in administrative costs for businesses.
Regulatory cooperation and alignment
This amendment is not related to a work plan or commitment under a formal regulatory cooperation forum (e.g. the Canada–U.S. Regulatory Cooperation Council, the Canadian Free Trade Agreement Regulatory Reconciliation and Cooperation Table, the Canada-European Union [EU] Comprehensive Economic and Trade Agreement Regulatory Cooperation Forum).
Strategic environmental assessment
In accordance with The Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that this amendment would not result in positive or negative environmental impacts. Therefore, a strategic environmental assessment is not required.
Gender-based analysis plus
No gender-based analysis plus (GBA+) impacts have been identified for this proposal.
Implementation, compliance and enforcement, and service standards
This amendment comes into effect upon registration. The Bank of Canada would implement the change by coordinating with the Canadian Bank Note Company (the company that prints Canadian bank notes) to print a facsimile of the signature of an additional deputy governor, should the need arise.
Funds Management Division
Financial Sector Policy Branch
Department of Finance Canada