Short Title Short title 1 This Act may be cited as the  Balancing the Bank of Canada’s Independence and Accountability Act . R.S., c. B-2 Bank of Canada Act 2 The preamble to the  Bank of Canada Act  is  repealed . Bank of Canada Act Clause 2 : Text of the preamble: WHEREAS it is desirable to establish a central bank in Canada to regulate credit and currency in the best interests 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, and generally to promote the economic and financial welfare of Canada; 3 Section 2 of the Act is amended by adding the following in alphabetical order: Permanent Committee   means the Permanent Committee on Monetary Policy; ( comité permanent ) Clause 3 : New. 4 The Act is amended by adding the following  after  section 4: Bank mandate  4.1 The mandate of the Bank is to ensure the financial stability of Canada and of Canadian financial institutions and to promote sustainable and equitable prosperity and the well-being of all Canadians.  Clause 4 : New. 5 Subsection 8(1) of the Act is replaced by the  following :  Powers of Governor 8 (1) The Governor of the Bank is the chief executive  officer  of the Bank and ,  on behalf of the Board ,  has the direction and control of the business of the Bank ,  with authority to act in connection with the conduct of the business of the Bank in all matters that are not by this Act or by the by-laws of the Bank specifically reserved to be done by the Board , by the Executive Committee or by the Permanent Committee . Clause 5 : Text of subsection 8(1): 8 (1) The Governor of the Bank is the chief executive officer of the Bank and on behalf of the Board has the direction and control of the business of the Bank with authority to act in connection with the  conduct  of the business of the Bank in all matters that are not by this Act or by the by-laws of the Bank specifically reserved to be done by the Board or by the Executive Committee. 6 The Act is amended by adding the following  after  section 13: Permanent Committee on Monetary Policy Constitution of Permanent Committee on Monetary Policy  13.1 (1) The Bank is to have a permanent committee on monetary policy that is to be responsible for setting the monetary policy of Canada. Composition (2) The Permanent Committee is to be composed of the following nine members:  (a) the Governor and the Deputy Governor; (b) a Deputy Governor responsible for economic analysis, or any equivalent duty, appointed under subsection 7(1); and (c) six external members appointed under this section. Chair (3) The Governor presides at meetings of the Permanent Committee. Observer member (4) In addition to the members referred to in subsection (2), the Deputy Minister of Finance may attend meetings of the Permanent Committee as an observer, without the right to vote.  Disqualifications and restrictions — external members (5) No person may be appointed or continue as an external member of the Permanent Committee if they (a) are not a Canadian citizen at least 30 years of age; (b) are a member of the Senate or House of Commons or a member of a provincial legislature; (c) are employed in any capacity in the federal public administration or the public service of a province or holds any other office or position for which any salary or other remuneration is payable out of public  moneys ; (d) except as authorized by or under any Act of Parliament, are a director, partner, officer, employee or shareholder of (i) the Canadian Payments Association, (ii) a  clearing house  or  participant , as defined in section 2 of the  Payment Clearing and Settlement Act , (iii) an investment dealer that acts as a primary distributor of new Government of Canada securities, or (iv) an institution that controls or is controlled by an institution referred to in any of subparagraphs (i) to (iii); (e) have a criminal record or is a bankrupt within the meaning of the  Bankruptcy and Insolvency Act ; or (f) are not recognized in their field for their skills and knowledge in at least two of the following subjects: (i) open-economy macroeconomics, (ii) the financial system, (iii) the labour market, (iv) supply chains, and (v) risk management. Selection — external members (6) External members are to be appointed through an open and transparent process jointly conducted by the Governor, the Deputy Minister of Finance and a qualified third person selected by the Governor and the Deputy Minister of Finance. Term of office and continuation in office (7) External members serve a renewable term of three years. If no new external member is appointed after the end of an external member’s term of office, the external member may continue in office until a new external member is appointed under subsection (6). Votes (8) In the transaction of the business of the Permanent Committee, each member of the committee has one vote, excluding the observer. No remuneration (9) Nothing in this section is to be construed as entitling any person to remuneration or to benefits of any kind for the duties they perform on the Permanent Committee. Powers 13.2 (1) Despite any provision of this or any other Act of Parliament, the Permanent Committee may (a) participate in discussions about setting the policy rate; (b) set the policy rate by vote; (c) adopt the annual cost-benefit analysis framework that supports policy rate decision-making; (d) supervise the assessment of the effectiveness of monetary policy — that is to say, whether the targets are met, what economic effects monetary policy has on prices, employment, growth, investment and productivity, and what financial and redistributive effects it has on households and businesses; (e) ensure that the use of non-traditional tools is  consistent  with the Bank’s mandate and the objectives of monetary policy; and (f) represent the Bank in negotiating and drafting the agreement with the Government of Canada provided by section 14.4 and include monetary policy targets in the agreement. Minimum number of meetings (2) The Permanent Committee must meet at least eight times per year, on dates announced in advance, to set the policy rate referred to in paragraph 13.2(1)(b).  Clause 6 : New. 7 The heading before section 14 and section 14 of the Act are replaced by the following: Monetary Policy Definition of  full employment 14 (1) In this section,  full employment  means the maximum sustainable level of employment. Objectives of policy (2) The objectives of monetary policy are to (a) achieve and maintain relative stability in the general level of prices over the medium term; and (b) achieve and maintain full employment. Policy rate (3) The Bank must publish the policy rate on its public website. Cost-benefit analysis (4) At least once every 12 months, the Bank must publish on its public website a cost-benefit analysis of the various scenarios the Permanent Committee contemplated for the policy rate. Disclosure to public (5) Despite any provision of this or any other Act of  Parliament , (a) the Bank must publish on its public website the minutes of the meeting at which the policy rate was set and the result of the vote; and (b) the members of the Permanent Committee are  authorized  to disclose to the public, in writing, the reasons for the policy rate that they set. Assessment of monetary policy 14.1 (1) At least once every three years, the Permanent Committee must assess the effectiveness of monetary policy. Matters to be taken into account (2) The assessment must take into account (a) the time frames for meeting monetary policy targets; (b) the specific economic effects of monetary policy on prices, employment, growth, investment and productivity; and (c) the financial impact on households, businesses and governments and the redistributive effects of monetary policy on the regions and groups specified by the Permanent Committee. Summary (3) Within 30 days after the assessment is made, the  Permanent  Committee must prepare a summary of the assessment and cause it to be tabled in each House of Parliament. Coordination of monetary and fiscal policies 14.2 (1) At least four times per year, the Deputy Minister of Finance must meet with the Permanent Committee to discuss the interactions between monetary policy and fiscal policy and the consequences of those interactions. Summary (2) Within 10 days after each meeting, the Bank must publish a summary of the discussions on its public website. Agreement between Government of Canada and Bank 14.3 (1) At least once every five years, the Minister must, on behalf of the Government of Canada, enter into an agreement with the Bank to renew the monetary policy framework. Content of agreement (2) The agreement must contain (a) the monetary policy framework; (b) the targets for monetary policy; (c) the methodology used to make the annual assessment of the economic and financial costs and benefits and the wealth distribution effects of monetary policy; and (d) the triennial process for assessing the effectiveness of monetary policy provided by subsection 14.1(1). Clause 7 : Text of the heading and section 14: Government Directive 14 (1) The Minister and the Governor shall consult regularly on monetary policy and on its relation to general economic policy. (2)  If, notwithstanding the consultations provided for in subsection (1), there should emerge a difference of opinion between the Minister and the Bank concerning the monetary policy to be followed, the Minister may, after consultation with the Governor and with the  approval  of the Governor in Council, give to the Governor a written directive concerning monetary policy, in specific terms and applicable for a specified period, and the Bank shall comply with that directive. (3) A directive given under this section shall be published forthwith in the  Canada Gazette  and shall be laid before Parliament within  fifteen  days after the giving thereof, or, if Parliament is not then sitting, on any of the first fifteen days next thereafter that either House of Parliament is sitting. 8 Subparagraph 18(g)(i) of the Act is replaced by the following:  (i) buy and sell from or to any person securities and any other financial instruments — other than instruments that evidence an ownership interest or right in or to an entity — that comply with the policy established by the  Permanent Committee  under  section 14 , and Clause 8 : Text of relevant portions of section 18: 18 The Bank may . . . (g) for the purposes of conducting monetary policy or promoting the stability of the Canadian financial system, (i) buy and sell from or to any person securities and any other financial instruments — other than instruments that evidence an ownership interest or right in or to an entity — that comply with the policy established by the Governor under subsection 18.1(1), and 9 The Act is amended by adding the following  after  section 35: Review 36 Five years after this section comes into force and at the end of each subsequent period of five years, a committee of the Senate, of the House of Commons or of both Houses of Parliament shall be designated or established for the purpose of reviewing this Act. Clause 9 : New.