New $20 & $50 delayed? New signatures?

News: Welcome to the Canadian Paper Money Forum.

Hi, there.

With an upcoming election later in June, will there be a new Governor or Deputy Governor as a result, resulting in another signature change on our banknotes?

Also, will the election result in the delay of the launching of the new Journey $20 and $50 notes?

See what you think.

Later, Jonathan

Interesting question.  I recall from the news at the time that the appointment of David Dodge was very much a political appointment.  Now Mr. Dodge is a highly talented economist, but he didn't rise through the ranks of the Bank of Canada, nor was his background in central banking.  His career was in the department of finance and I'm pretty sure he was assistant deputy minister.  Since (now prime minister) Paul Martin was Minister of Finance then, he and Mr. Dodge would have worked closely together.

So now assuming the likely scenarios in decreasing liklihood:

1. Slim liberal majority - Mr. Dodge's job is safe.
2. Liberal minority - Mr. Dodge's job is safe.
3. Conservative minority - Mr. Dodge's job is safe for now but his term may not be renewed.  I don't think Mr. Harper would be looking for any major upheaval at the central bank until his hold on power is assured - ie a conservative majority.
4. NDP majority - Look for quick changes - Alexa McDonough will become the first woman governor and Svend Robinson will become the first gay Deputy Governor.

The BoC employees "civil servants". They're like warts, you can get read of them, but it's going to take some time.

These positions have a pretty iron-clad term associated with them. I don't believe (though I bet Bob would know for sure), that a standing Governor or Deputy have ever been displaced by an incoming Government.

So...   do you think that the upcoming election will possibly delay the launch of the $20 and $50 Journey notes?

It's not an impossibility but I really doubt the bank would "stop" working because an election campaign is underway.  As for the governors, their job is pretty safe. Dodge's term is until 2008.  Regardless of who wins the election, don't look for signature changes.  The Liberals will get at best a minority, hopefully they'll be sent to the opposition this time around.  I've always had a slight right-wing bend. I think that's all I need to say for my political opinions....  

The Bank of Canada is essentially at an "arms-length" from the government and not under political control.  However, one does need to mention that the government does technically have the power to veto Bank actions.

An example (actually, if I recall correctly, the only example) of when this political intervention was used was during the reign of J.E.Coyne as governor.  In the late 1950s/early 1960s, inflation was on the rise, and in an effort to quell that effect, Mr. Coyne ordered a decrease in the money supply (anyone with an economics background will know this doesn't mean how many banknotes are in circulation).  The prime minister, John Diefenbaker, did not agree with this decision, so through the Minister of Finance, he ordered its reversal.  Mr. Coyne refused so the prime minister attempted to have him fired.  However, only Parliament can fire the governor of the Bank of Canada, and they didn't.  Alas, the political fallout over this issue was the cause of Mr. Coyne's resignation in 1961 and it is considered to be one of the leading causes behind the subsequent defeat of the ruling Conservatives in 1963.

This is to my knowledge, the first and last time that the government's "veto" (for lack of a better word) was used.  Until then, and ever since, the Bank of Canada has remained politically separate from the government.

So... the bottom line...
No, I do not believe the current election fever will cause any impact or delay in Bank operations such as the release of new banknotes, and further, I do not believe it will impact who is at the helm of the Bank, namely Mr. Dodge and Mr. Jenkins.

I curious if anyone knows....  

I agree that incidences like the Coyne affaire happen rarely, as political interference in the central bank could destabilize the economy.

However whether or not a high ranking indivudual in the bank is selected to become governor may have political influence.   For example, when Mr. Thiessen retired, his senior deputy governor Malcolm Knight was passed over for promotion (as were the other 4 deputy governors) in favour of David Dodge who was the favorite of the politicians, and who came from the Finance Ministry.  

How often has this happened?  There have been several senior deputy governors who never advanced to the governor's job including Mr. Osborne, Mr. Gordon, Mr. Beattie, Mr. Lawson, Mr. Bonin and Mr. Knight.

I understand that Mr. Osborne was seconded from the Bank of England where he returned once the Bank of Canada was well established.  What about the others? Any politics involved in those decisions?

It could very well be that they never wanted the Governor's job?

Coyne, Bouey, Crow and Thiessen are the only ones to have had their signature on both sides.  Lawson we never knew much about I don't think, there's nothing about him on the BoC's web site.  Maybe he had something to do with politics?

Just a thought.