Louis Rasminsky, who had succeeded James Coyne as Governor in May 1961, had insisted as a condition of his appointment that the government’s powers regarding monetary policy be clearly defined.19 The Bank of Canada Act was amended in 1967 to allow the government to issue a directive to the Bank in the event there was a serious disagreement over the conduct of monetary policy.
Under this amendment, the government would have the right to override the Bank’s policy decisions. To do so, however, the Minister of Finance would have to publish the reasons for his (her) dissatisfaction, indicating both the new measures that the Bank was supposed to undertake as well as the period during which they were to apply.