Bank of Canada 2023 Financial Statements

Summary#

The publication presents the audited financial statements of the Bank of Canada for the year ended December 31, 2023. The independent auditors (Ernst & Young LLP and KPMG LLP) gave an unqualified opinion, and the statements show a net loss of $5,652 million and a larger comprehensive loss of $5,749 million for 2023.

What it does#

• Publishes the Bank’s audited statements prepared under International Financial Reporting Standards for the year ended December 31, 2023.
• Shows the Bank’s main totals:
  • Total assets: $316,776 million (down from $410,710 million in 2022).
  • Net loss for the year: $5,652 million; comprehensive loss: $5,749 million.
  • Accumulated deficit at year‑end: $6,738 million (vs $1,086 million at end of 2022).
• Breaks out what caused the loss in simple terms: interest expense exceeded interest revenue (large increases in interest paid on deposits), producing a net interest expense of $4,976 million before operating costs.
• Includes details about other items that matter to finances and operations:
  • Investment holdings and how they are measured (including Government of Canada bonds).
  • A derivative indemnity asset tied to previous bond‑purchase programs ($23,406 million).
  • Pension and other employee benefit positions (the Pension Plan’s assets were $2,345 million with a pension obligation of $2,044 million, producing a net defined‑benefit asset).
  • Commitments, contingencies and swap facilities the Bank participates in.
• Notes the effect of recent legislation: under the Budget Implementation Act, 2023, No. 1, the Bank must apply future ascertained surpluses to reduce its accumulated deficit before remitting surplus amounts to the government.

Who's affected#

• The Government of Canada (the Bank’s shareholder) and the Receiver General for Canada, because the Bank’s ability to remit surpluses is affected by the accumulated deficit and the 2023 Budget Implementation Act rule.
• Members of Payments Canada, domestic banks and other depositors who use the Bank’s deposit services (the Bank reports large deposit balances and related interest costs).
• Holders and users of Canadian bank notes (the Bank reports on bank notes in circulation, $119,430 million).
• Employees and retirees covered by the Bank of Canada Pension Plan and related benefit plans (pension assets, obligations and contribution rules are reported).
• People who follow Canada’s financial stability and central‑bank operations, including markets and analysts who watch the Bank’s balance sheet and policy‑related programs.
• General public and taxpayers indirectly, because the Bank’s financial position can influence how and when it remits funds to the government and because central‑bank operations affect the broader economy.

If it is unclear who will be directly affected by a specific line item or contingency, the statements present the detail but do not always identify immediate real‑world impacts.

Why it matters#

• A large reported loss and the resulting $6,738 million accumulated deficit change how the Bank handles future surpluses. Under the current rule, future surpluses will be used to reduce this deficit before any remittance to the government.
• The loss mainly reflects interest costs rising faster than interest income. That links directly to higher market interest rates and the Bank’s balance‑sheet structure — a practical example of how changes in the economy and policy tools show up in official accounts.
• The statements show the Bank remains operationally able to meet obligations and to provide liquidity to the financial system (it can create Canadian‑dollar liquidity as needed). They also disclose contingencies and swap facilities that matter for financial stability in stress events.
• For pension plan members, the published asset and liability numbers and the funding comments give a picture of plan health and potential contribution expectations.