What Is The Role Of The Minister Of Finance In Canada?
If you have conducted any research on the Canadian government, one of the questions that may have arisen is: What is the role of the minister of finance in Canada?
The finance minister presides over the Canadian finance department.
Canada has had 40 finance ministers, the current one being Chrystia Freeland. One of the significant roles of the finance department is to prepare the government's budget annually. The finance minister then presents it.
The History of the Canadian Finance Department
Canada's finance department researches, advises on and analyzes the country's national economic and financial affairs. These affairs include fiscal policy, debt management, and taxation.
The department was first created in 1869. It inherited the title and structure from the small finance department of the pre-Confederation Province of Canada.
In the starting years, the department's primary function was bookkeeping. It administered the collecting and spending of government money, and it was also the department's role to service the national debt.
The government did not borrow money or tax the citizens until the First World War when Victory Loans and income taxes were formulated. Although this did not alter the department's tasks, it brought forth some complications.
The finance department started employing national economic managers when the Second World War began. It also started employing university-trained economists to run senior offices, and the Gross National Product increased by ten times during this time.
The growth also led to the department's expansion, and the federal government grew. The government, through the finance department, changed its financial structure permanently.
Unemployment insurance and family allowances were introduced to the department. However, things started changing in 1939 when the officials introduced taxing powers and spending policies. They did this to influence economic development.
This was different from the previous years, where they would balance expenditures with revenues.
Evolution of Finance Department and What It Is Today
The department still plays a primary role in helping the Canadian government formulate social and economic policies. These policies help improve the standards of living and quality of life of the citizens.
The finance department is small, with less than 1,000 people. It is established under section 14 of the Financial Administration Act, and section 15 of the act states that the finance minister manages and directs the department.
They also control and oversee all matters of financial affairs. The other functions of the finance minister are explained later in the article. But before we delve into that, let’s answer the question: Who is the minister of finance in Canada?
Who is the Minister of Finance in Canada?
Now that you already know the history of the Canadian finance department, who is the finance minister of Canada and what does the minister of finance do?
The Honourable Chrystia Freeland holds two positions in the Canadian government as the deputy prime minister and the minister of finance. She first served in the government as a Member of Parliament for Toronto Centre in July 2013.
In 2015 Freeland became the Member of Parliament for University-Rosedale. She was re-elected again in October 2019 and September 2021.
Freeland also served as Canada's minister of international trade from November 2015 to January 2017. In that role, she oversaw the successful negotiation of Canada's free trade agreement with the European Union.
Freeland was also the minister of foreign affairs for Canada from January 2017 to November 2019. She is an advocate for democracy, human rights, and multilateralism globally.
In November 2019, Freeland became the deputy prime minister of Canada. She was also appointed as the minister of intergovernmental affairs, and Freeland became the Minister of Finance in August 2020.
Freeland went to Harvard University and later to the University of Oxford; a Rhodes scholarship was offered to her. She started her career as a freelance journalist, where she worked for the Financial Times.
While still freelancing in journalism, Freeland also worked with The Washington Post and The Economist. She got a higher rank and joined the Toronto-based Globe and Mail as an editor, where she worked from 1999 to 2001. She returned to financial times as the deputy editor.
Freeland joined the Canadian-owned Thomson Reuters in 2010, where she served as the managing director and editor of the consumer news. However, she wanted a change and decided to join politics in 2013.
Freeland is also an author of three books: Sale of the Century: The Inside Story of the Second Russian Revolution; Plutocrats: The Rise of the New Global Super-Rich; and The Fall of Everyone Else.
Plutocrats won the Lionel Gelber Prize and has been an international best-seller.
What Does the Minister of Finance Do?
At this moment, let’s look at the roles of the minister of finance in Canada.
Responsible For Bank Of Canada
The Bank of Canada formulates the country's monetary policy and promotes a safe financial system. It has the authority to issue Canadian banknotes and provide banking services and money management to the government under the finance minister.
Offers Budget Advice And Process, And Reviews Government Programs
The finance minister manages the government finances, and it's their responsibility to go through the federal budget. Once the budget is ready, they present it to the House of Commons to vote.
Accountable For Government's Finances
The minister takes care of all the government monies. They regulate the banks in the country, and they also govern the banking industry. The department also manages the financial management framework, including grants and procurement policies.
Member Of The Treasury Board Of Canada
The treasury board oversees the government's spending and is the principal employer of the public service. When ministers present their department's expenditure for financial approvals, the president of the treasury presents the estimates prepared by the department of finance to the parliament.
Responsible For Asset Sales
The government sells assets like military equipment, lands, and buildings to control inflation. With the help of the finance minister, the ministry of finance prices the items and collects the monies from the public.