People today have more erroneous ideas about money than Victorians had about sex, so please read the following with care. These notes, and checks drawn on the Bank of Canada, are the only legal money in Canada. By contrast, he does not have to accept your check drawn on a private bank, or even a certified check of a private bank. Furthermore, it costs the banks billions of dollars to maintain the payments system that clears your check back to your account and to keep the necessary records. All those nice, or not so nice, people who work in those banks, deciding who gets a loan and what happens if they can't pay have to be paid their salaries.
Banks also have to pay phone bills, electricity, heat and so on.
What they create is intangible, but at the same time very real. Today only about 4 percent of the money in circulation in Canada is Bank of Canada legal tender. In 1945 the Bank of Canada accounted for 27 percent of our money. At that time the bank rate of interest was only 1.5 percent and the Canadian economy boomed. This promise is what a private bank provides for you when you take out a loan with the promise to repay it with interest.