Bank of Canada's Balance Sheet
The Bank has a zero bookvalue policy on its balance sheet—matching total assets to total liabilities—and transfers any equity above this amount as a dividend to the Government of Canada. The Bank of Canada owns 61 billion in Government of Canada debt and had a net income in 2011 of 1.25 billion. The Bank of Canada matches its liabilities of 61 billion in currency outstanding—to its assets owning 61 billion in Government of Canada debt. The bank notes in circulation have changed from 55.4 billion in two years to 61 billion. In 2008, the Bank of Canada had its highest annual report total asset, total liabilities number at 78 billion. The Bank of Canada lists cash on its 2012 second quarter balance sheet at $8.3 million in currency and foreign deposits. The Bank of Canada's books are audited by external auditors who are appointed by Cabinet on the recommendation of the Minister of Finance, and not by the Auditor General of Canada.
It is important to note, the balance sheet policy employed by the Bank of Canada is that this base money is not permanent, as for each created dollar of credit there is a matching liability created on the Bank of Canada's balance sheet—and is a zero sum once the debt is paid off. True money is only issued as reserve currency for commercial bank lending by the government. Also called high-powered money, this money can then be multiplied by a factor outside of government control through bank lending.
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