Bank of Canada 2023 Financial Statements

Summary#

Bank of Canada published its audited financial statements for the year ending December 31, 2023 (posted in the Canada Gazette on May 11, 2024). The statements show a 2023 net loss of $5,652 million and an accumulated deficit of $6,738 million, leaving the Bank with a total deficiency of $5,846 million at year end.

What it does#

• Publishes the Bank’s audited annual financial statements and the independent auditors’ report. The audit opinion was signed by Ernst & Young LLP and KPMG LLP on February 22, 2024.
• Shows the Bank’s financial position at year end:
  • Total assets: $316,776 million.
  • Total liabilities: $322,622 million.
  • Bank notes in circulation: $119,430 million.
  • Investments reported include Government of Canada bonds carried at amortized cost ($84,613 million) and at fair value ($184,443 million).
  • A derivative asset described as indemnity agreements with the Government of Canada: $23,406 million.
• Reports the Bank’s 2023 net loss ($5,652 million) and comprehensive loss ($5,749 million), and explains how remittances to the federal government are being treated under federal legislation (see next point).
• Notes that the Budget Implementation Act, 2023, No. 1 requires the Bank to apply any ascertained surplus to its accumulated deficit until certain conditions are met. As a result, remittances that would normally go to the Receiver General for Canada are affected.

Who's affected#

• Government of Canada and the Receiver General: the Bank’s usual remittance of surpluses is being affected by the accumulated deficit and the Budget Implementation Act rule.
• Canadians generally: the publication provides transparency about the finances of the country’s central bank, which has a public-interest role.
• Financial-system participants (for example, members of Payments Canada and other depositors at the Bank): the statements list large deposit balances (e.g. $120,567 million from members of Payments Canada), so changes in the Bank’s costs and balance sheet are relevant to system liquidity and bookkeeping.
• Bank employees and pension plan stakeholders: the report discloses pension-plan assets and obligations and related changes.

If it is unclear who else is affected, the statement itself does not identify other specific groups.

Why it matters#

• It shows the central bank recorded a large loss in 2023. The statements explain that, in simple terms, interest paid on deposits exceeded interest income from investments, contributing to the loss.
• The publication is a formal transparency step: it lets the public and government see the Bank’s finances, including assets, liabilities and pension positions.
• Because of the way federal law now treats the Bank’s surplus, the loss means the Bank will not send surplus cash to the Receiver General until the specified conditions in the Budget Implementation Act, 2023, No. 1 are met. The report also says the Bank still has sufficient cashflow to continue operations and meet its obligations.