Figure14-10Deposit Switching Operations by the Bank of Canada The Bank of Canada can increase or decrease commercial bank reserves by shifting government deposits between itself and the commercial banks. For example, suppose the Bank of Canada writes a $10 million cheque on the government account that it holds, and deposits that cheque into government accounts held with commercial banks, such as the Bank of Nova Scotia. Commercial bank reserves are increased by $10 million, ultimately leading to an increase in the money supply via the money multiplier, as banks lend out some of these new reserves.