inconvenient facts

Submission to the Minister (Pacific Free Press)

Dear Chairman; it is now being said publicly that Canada’s banks were never given “bailout” help by the Federal Government. As recently as this morning on a CBC Early Edition interview out of Vancouver, a guest made this assertion and Mr. Cluff let it go unchallenged.

On October of 2008 Prime Minister Harper publicly announced that “Canada Mortgage and Housing (CMHC) will purchase up to $25 billion in insured mortgage pools as part of the Government of Canada’s plan, announced today, to maintain the availability of longer-term credit in Canada.”

On November 12, 2008, another $50 billion allocation was announced. The official text was; “The Honourable Jim Flaherty, Minister of Finance, today announced the Government will purchase up to an additional $50 billion of insured mortgage pools by the end of the fiscal year as part of its ongoing efforts to maintain the availability of longer-term credit in Canada.

This action will increase to $75 billion the maximum value of securities purchased through CMHC under this program”.

By this program the commercial banks loaned money to the federal government so that it in turn was able to purchase the above mentioned mortgage pools. Do you and your fellow Members not consider this to be a “conflict of interest” transaction at the minimum?

Mr. James Rajotte

Chairman of the Standing Committee on Finance

Sixth Floor, 131 Queens Street

House of Commons

Ottawa, Ontario, K1A 0A6

Ref; Federal Financial aid given to Canadian Chartered Banks

A report by Bloomberg dated January 23, 2009, indicated the government had pledged as much as $200 billion in this matter.

Regardless of the modifiers, the above record of financing activity clearly indicates that the citizens of Canada traded cash money that had to be borrowed (think or our deficit) for the purchase of “insured mortgages” that the world has come to recognize as code words for “toxic assets” or “liars loans”. By this program Canadians have lessoned the financial risk burdens of the shareholders of our banks. Also, by this program Canadians have enabled our banks to engage in foreign acquisition such as the purchase of Commerce Bancorp of new Jersey by TD Canada Trust; the Alabama National Bancorp by Royal Bank’s subsidiary RBC Centura; the ABN AMRO leasing division by the Royal Bank; etc.

Apart from the staggering conflict of interest condition this program represents it still constitutes a “bailout” as most Canadians now understand the word to mean.

As parliamentarians and particularly as members of the Finance Committee, please correct the public misconception that the Government of  Canada did not “bailout” Canada’s banks when in fact we all still own $75 billion of their valueless paper.

Sincerely

Erik Andersen, Cc Standing Committee on Finance

  Jean Crowder, MP

  Robert Oliphant. MP

  Chris Bowers; Publisher of the Shingle

  James Daw; Journalist

  Toby Sanger; Economist