Rescinded [2009-10-01] - Policy on Banking Compensation

The present document contains the entire text of the Banking Compensation policy as revised May 15, 1995. It cancels Treasury Board Circular 1987-14 entitled "Banking Compensation".

1. The purpose of this policy is to define the responsibilities within the government in regards to banking services relating to the inflows and outflows of the Consolidated Revenue Fund and the associated compensation.
2. The government will pay for banking services, generally on a fee-per-service-provided basis. The cost of banking services pertaining to the inflows and outflows of the CRF, will be paid to financial institutions out of an appropriation voted to the Receiver General for Canada.
3. The Banking and Cash Management Sector (BCMS) of Public Works and Government Services Canada (PWGSC) is responsible for the operation of the Consolidated Revenue Fund (CRF). They facilitate the collection of all receipts, the payment and settlement of disbursements and the daily placement of cash balances for the Government of Canada. As well, they arrange for and compensate financial institutions for the necessary banking services to support this work.
4. The Department of Finance is responsible for making banking arrangements with respect to government debt, investments and balances and acquires these generic banking services under the industry-wide Memorandum of Understanding (MOU) - Float and Balances.
5. Departments are responsible for managing banking arrangements and negotiating banking services which do not involve the inflows and outflows of the CRF. Upon request, the BCMS will assist in negotiating banking agreements on behalf of any government department and will advise on methods and approaches for dealing with financial institutions.
6. The Receiver General is responsible for acquiring generic banking services under the industry-wide Memorandum of Understanding (MOU) - Fees and Services. This agreement is currently negotiated every three years and covers fees for cashing Receiver General cheques, standard deposits made by departments, and remittances to the government at financial institutions (FI-Remitted).
7. The Receiver General also makes other banking arrangements, such as: tendering for exceptional deposits which fall outside the standard deposit definition of the MOU, deposit facilities for tax revenue; the acceptance of debit and credit cards for government receipts; payments by direct deposit; travellers' cheques and departmental bank accounts.
8. The Receiver General is responsible for compensating the financial institutions for arrangements, pertaining to the inflows and outflows of the CRF, based on the conditions of the arrangements.
9. The Treasury Board Secretariat (Financial and Contract Management Sector) is responsible for confirming that all banking agreements between financial institutions and the government adhere to present Treasury Board policy and sound financial management practices.

To ensure the use of cost effective and efficient banking arrangements and to assign the roles of the organizations responsible for establishing and using such arrangements.

It is government policy that the Receiver General makes and administers arrangements for banking services with respect to inflows and outflows of the Consolidated Revenue Fund.

This policy applies to all departments, agencies and Crown corporations (hereafter referred to as departments) that are involved with inflows and outflows of the Consolidated Revenue Fund.

1. On behalf of the government, the Receiver General shall establish all banking arrangements with respect to inflows and outflows of the CRF to acquire the most efficient and cost effective arrangements, while minimizing risk and ensuring sound financial practices.
2. A department subject to this policy shall apply directly to the Receiver General to establish a new service and to revise existing arrangements where funds are deposited or drawn on the CRF.
3. Departments must abide by the procedures and terms of all agreements established by the Receiver General on their behalf.

1. The Treasury Board Secretariat will monitor the effectiveness of this policy by reviewing the banking agreements between the federal government and the financial institutions and by reviewing departmental audit reports.
2. The departments should give special attention to the legal aspects of contracts, agreements and any other types of arrangements relating to the inflows and outflows of the Consolidated Revenue Fund and any associated compensation.

Enquiries concerning this policy should be directed to your departmental headquarters. For interpretation of this policy, departmental headquarters should contact:

Financial and Contract Management Sector
Financial and Information Management Branch
Treasury Board Secretariat
L'Esplanade Laurier
8th Floor, West Tower
300 Laurier Avenue West
Ottawa, Ontario
K1A 0R5

Telephone: (613) 957-7233
Facsimile: (613) 952-9613

For details concerning banking arrangements, contracts or information please contact:

Director, Banking Arrangements Directorate
Banking and Cash Management Sector
Public Works and Government Services Canada
Place du Portage, Phase III
8A1
11 Laurier Street
Hull, Quebec
K1A 0S5

Telephone: (613) 956-2945
Facsimile: (613) 956-7595