Monthly Archives: March 2016

Bank of Canada v Liberal Infrastructure Bank

To the Right Honourable Mr. William Morneau, 

Minister of Finance for Canada

Dear Mr. Morneau,

I thank you for the electronic letter 2016FIN428702 sent to me by Veena Bhullar (Senior Special Assistant –Operations) , in response to the section on The Bank of Canada from my letter to the Prime Minster of 25thNovember 2015.

First let me say that I do appreciate a response from your office but I have some serious problems with the content of the response.  I quote paragraphs two and three in particular to start with:

“It is sometimes suggested that the Government of Canada should fund part or all of its debt by borrowing from then Bank of Canada, rather than by borrowing in private sector markets. The Government does not support this approach, as it would require the Bank to create new domestic currency, which does not create any additional wealth.

In fact, the experience of many nations has demonstrated that relying on domestic currency creation to finance government expenditures results in excessive inflation.While some inflation is desirable to ensure price stability, too much inflation can adversely affect economic growth.  Furthermore, excessive spending and domestic currency creation often lead to a misallocation of scarce resources.”

Para #2

Are you seriously suggesting that the experience of “growth” in Canada between 1935 and 1974, including financing our part in WW2, the St. Lawrence Seaway, the Trans Canada Highway, CPP, Our National Heath system along with a myriad of social services among so many other things, did not lead to growth and wealth of the country and the Canadian people?   It is completely obvious the private banks and investors of the world were angry that we were doing so well and that they were not making a huge profit from it, thus the creation of the Bank of International Settlements and its accompanying Basel agreements; through the signing of these agreements we gave them the right to gouge us with compounding interest rates as we started to borrow on credit from them. Your suggestion that the creation of national debt in 1974 of $22 billion owed basically to ourselves through our own Bank of Canada creating money to be spent into the economy is not preferable to the over $1 trillion currently owed to international banks and investors at that aforementioned compounding interest rate, based I might say on a series of computer strokes credit.    But you are right, the creation of new domestic money printed by the Bank of Canada to be spent by the government for the benefit of the people of Canada does not make money for the banks and international investors, even though it will benefit all Canadians, and indeed all our businesses too.  Sad that you cannot accept the Bank of Canada as a good thing for Canada, and essentially for our sovereignty as well.

Para#3

Please provide me with the names of those countries which own their own bank and have fallen into the path of excessive inflation through government expenditures.  I could give you many examples of countries which do not own their central bank which have fallen into that trap, (the UK and USA to mention just two), and offer instead the example of North Dakota a state of the USA which owns its own bank and thrives with no compounding interest debt to outsiders and no deficit in their budgets.  It should also be mentioned that Libya owned its own bank and was threatening to help create a Bank of Africa to be jointly owned by the African Nations and as a result of this threat to the IMF  we helped to destroy that country completely and allowed the IMF to establish a private central bank in place of the Libyan people owned bank.  Libya is now in financial ruins and complete chaos politically and socially. That is what happens when  private central banks get mad at potential lost profits..

As I mentioned above the concept that creation of money by the Bank of Canada to be spent into the economy (particularly for the people’s benefit) did not create excessive inflation between 1935 and 1974 and, is not creating inflation even now in North Dakota so that argument is spurious and very weak.

How will using the bank of Canada to finance our needs lead to misallocation of scarce resources?

 I would refer you to Paras #4 and 5:

“Since 1991, the Government and the Bank have jointly agreed that the central objective of monetary policy should be for the Bank to target an inflation rate of 2%. This is the best contribution monetary policy can make to solid performance.

Canada’s policy of low, stable and predictable inflation has served Canadians extremely well. This policy has contributed to creating a more stable economic environment relative to that of previous decades and has allowed households and businesses to make better long-term financial plans.”

Surely this government cannot believe that increasing the national debt from 22 billion owed to ourselves at a low flat rate interest, to close to or over $1 trillion today at a compounding interest rate owed to outside and private interests is an improvement.  Do you really think that households can make long-term plans when they are not sure if the breadwinners will even have a good job job next week? Or that business can make those same long term plans when they have no idea how long they will be in business, or when they will be bought out by foreigners and closed down. When, during the last decade, our manufacturing was sacrificed for bitumen production from Alberta, and the price for that bitumen feel through the floor our economy became as unstable as is our looney leading me to question the concept of “a more stable economic environment.”

No Mr. Morneau, I cannot believe or accept that the best use of the Bank of Canada is to simply be an inflation watchdog.

To move to another topic, I understand that this government intends to create an Infrastructure Bank. I have some questions about this.

What will it be called?

Who will own the bank?

Who will finance it?

Will there be an Act of Parliament to create it? (If the answer is yes, why would it have any teeth as the Bank of Canada Act has been ignored since 1974 and your government shows no signs of obeying the mandate created in 1935, as clearly stated in Para#1)

Will this new bank be subject to the Basel agreements?

Will this bank’s activities cause us to be challenged by the investments agreements already in place through a myriad of so called free trade deals and the CETA and TPP? (Yes I know these are under a different ministry but they refuse to answer my questions) because those multi million/billion dollar awards will affect your budget.

Which Ministry will administer this new bank’s activities or will it be a joint venture?

Will there be consultations with Canadians to determine if this extra national debt is acceptable to us?

 

Finally what is the point of this new Bank when we already have the Bank of Canada mandated to do this work? And how will the activities of this new bank not adversely affect inflation as you claim would the use of the Bank of Canada?  Surely if this bank is to operate on credit only supplied by international banks and investors at compounding interest rates that will drive our national debt through to the $2 trillion mark very quickly.

 

I cannot condone what your government is planning as I do not believe it is in the best interest of Canadians or Canada.

 

Jeremy Arney

Interim Leader of the Canadian Action Party

 

 

Picking Bones with Christy Clark

An open letter to Ms. Clark, Premier of British Columbia.

 Ms. Clark I have a few bones I need to pick over with you.

When I arrived in BC in the late 1960s WAC Bennett was in the midst of building a province for the people of BC, creating crown corporations to look after our needs and provide for the future of the province.  Such corporations included BC Rail, BC Hydro, BC Medical Services and a very efficient and effective Highways department. The attitude of the people was one of “can do”, or  “will do” and helping others in trouble at all times of day or night was the normal.  His methods would not work today but at the time they worked well and his plan and aim was to improve the lot of all the people of BC.

 So here are some of the bones:

BCHydro.

Your BC Liberal party decided to sell off BC Hydro piece by piece and indeed this was started with the sale of the accounting process to Accenture before the Unions picked up upon this and so the Heritage Act was implemented by an angry Campbell, which made it impossible to sell BC Hydro.  This Act does not mention bankrupting BC Hydro and that is exactly what your predecessor proceeded to do, and you are continuing on this path.   High rates of purchase through corporate run of the river projects at a time when supply of power is at its highest and cheapest through our own dams, and ridiculously costly projects such as the Smart Meters, and now the Site C dam have all played their part.  At its best BC Hydro was providing a dividend to BC of around $300 million per year to go towards heath and education.  Since the asset to liabilities has now past the legally mandated point (80% – 20%) where a dividend can be paid and since Mr. Campbell cooked the books to include years of advance hydro billings so that he could get a payment of $600 million, BC Hydro is now in a real financial pickle and you are adding to that with this unnecessary site C dam.  Revenue for BC Hydro has fallen due to some extent to their very effective program to reduce the use of hydro in homes and businesses, and yet you continue to pile expenses on to BC Hydro which it cannot afford.  I know you claim that the dam is needed to power your LNG program, but where exactly is that now?   B C Hydro is carrying debt already that it cannot support and how long before your  BC Liberals succeed in breaking it?

B C Rail.

Surely this must go down as the most infamous deed ever perpetuated by any government in the history of BC.  From the promise not to sell BC rail prior to getting elected to actually going ahead with that sale and the subsequent perversion of the courts independence along with a tame prosecutor and bailing out those scapegoats elected to take the fall literally right before Campbell was due to be a witness, it can only be considered in the light of a premier who cried for forgiveness on TV after he was caught for DUI overseas and labelled as a criminal.  Such was his lack of shame that one could only expect what happened with BC rail and the subsequent loss of revenue for BC in favour of his eventual board seats.  Where were you when all this transpired Ms. Clark, and did you not learn anything from this betrayal of the people of BC?

LNG and the fracking process in North East BC and the Sacred Headwaters:

I have asked your Mr. Coleman (yours because he obviously does not work for the people of BC who pay his salary) many times just where he plans to get the water needed for this process but because he doesn’t know he ignores me.  There have been numerous potential investors in this process but I imagine they are dropping off like flies because they too know that there is a limited supply of water, and because the potential costs to them of permanently damaging the Sacred Headwaters and the aquifers there, so they are not as gung ho as you would like to believe.  Without investors there will be no LNG program and no need for huge amounts of Hydro. Is that why you are now asking Alberta to buy hydro power  produced eventually from a dam which will destroy many acres of agricultural land and First Nations treaty lands which include burial grounds and hunting grounds as well as their traditional crop growing area?   This whole concept is a nightmare for the people of north east BC but a potential for profit for some greedy and uncaring corporations.  They do care about their bottom lines however and I suspect the cost of claims against them for damage to the water tables will make even them stop and think.  

B C Medical Services:

Hello Maximus and Compass and goodbye BC medical services. Yes that’s right a US company organises BC medical services, and a UK company looking after our hospitals. I am assuming that you have renewed the Maximus contract and plan to spend more money overseas instead of having very capable BC people do the work.  There you go, and you claim that costs are rising and of course they are.  You cannot expect a US corporation to do the same work as that which was done so efficiently and locally by our own BC staff at anything but a profit.  At one time BC medical services was a very reasonable and effective plan, now I can barely afford to make my monthly premiums as at the age of 75 – nearly 76 – I have to pay some $75 a month for a service I hardly use, and for the benefit of some fat cat somewhere in the US.  It never fails to amaze me that your ultra conservative party and leaders, and that includes you, feel that increased costs by contracting out work and thereby loosing jobs here in BC is an effective way to supply a need.  The constant complaint that health costs are raising rings hollow to me because they should always be measured against revenue.  If the costs are almost constant but are still classified as a percentage of the falling revenue then yes they do appear to be a larger piece of the pie; fact is though that through tax cuts and your friend Harper’s reduction in payments to the provinces for health, the pie is decreasing in size, whilst the health costs remain relatively steady thus taking more of the decreasing pie.

Eliminate the external costs of contracting out, re hire locals and watch the change.

ICBC  more affectionately known back when it was created as Moscow Mutual

Mr Barrett introduced the Insurance Corporation of BC because he wanted to corner the automobile insurance profit to help pay for his excesses in other spending.  The fact we lost such companies as Allstate completely in BC was of no importance to him no matter how well they treated their customers.

Now of course ICBC has its talons into everything from acting as receiver general for BC, to having its own courts and rental cops (integrated police forces), and using money in trust to invest in shopping centers.  The aim of ICBC adjusters is to make sure that the minimum amount be paid out on claims, and their service generally is very antagonistic and unfriendly.  They are supposed to work for the people of BC and be helpful in our time of need, as were their predecessors, but they are anything but that. 

Work Safe BC, previously  known as Workers Compensation of BC:

Designed to bring about settlements between employers and employees who got injured on the job without going through costly court battles usually won by the employers who had more money for lawyers, and leaving badly injured workers to fend for themselves it was an excellent idea welcomed by both employers and workers. Their work almost invariably bought about safer work places without lost production.  This current newly named group is more interested in nit picking and flexing their muscles at the behest of their provincial bosses.  Has safety increased since the switch from WC to WS?  Doubt it because generally all were looking at the costs of being unsafe anyway.  But as another strong arm of the provincial government under a catchy name, as per conservative practice, the supposition that safety is more of a factor is a mute point.  I cannot say about claims as I have been fortunate enough to have avoided such a thing since about 1995.

 The Senate of Canada

For at least a decade but especially during the last 4 years, the Senate of Canada has become the last place in Canada where any nonpartisan sober second thought could be expected to take place.   Your fellow conservative Harper wanted to simply starve it to death by not appointing any new Senators (in contradiction to our constitution but what did he care), and he could do that without losing his majority hold on the votes there, whilst the NDP want to abolish the place.  Now we have a new concept on the appointment of Senators which would include public and provincial suggestions and approval.   You have publicly rejected this new concept on the grounds that BC does not have enough representation.  That is a matter for the constitution Ms. Clark and has nothing to do with the quality of those who would, should and could represent BC in the Senate of Canada.  I do not appreciate that the premier of the province in which I live is more interested in making conservative points than looking out for the people of BC, but even in my most optimistic moments I cannot expect a leopard to change its spots.

 

 That is enough for now, but believe me there are more bones, such as the health and education of my children and grandchildren, and indeed now two great grandchildren, for whom I fear for the value of their lives in BC.   You are threatening their environment ( Mount Polley mine comes to mind) as well as depriving them of the safety net social services so carefully built by WAC Bennett many years ago.

 

Jeremy Arney

BC Resident

Gary Doer and the TPP

Just by chance and I do not know why I recorded CPAC’s Public Record on 2nd December 2015, and I played it back a night or two ago.

One of the segments was Gary Doer, our outgoing Ambassador to the US, talking at the Economic Club of Canada on the subject of Canada- US Relations.

After rambling on rather disjointedly as usual about all sorts of things he came to the subject of the TPP, and here he showed himself to be just another lackey of the ex Harper bunch and the corporate agenda.

After he had finished his presentation he was asked a question about the likelihood of the TPP being passed by the US congress and when.

At the end of his reply he said this and I quote:

 

“My advice to Canada would be: be ready to make a decision. It’s your decision, it’s our decision. We are a sovereign country, we will make our decision but don’t do the, you know, due diligence. Don’t waste time on the due diligence on the public interest.”

 I replayed this segment several times to make sure I had heard it right and then again to write down what he actually said.

This is a man who has spent some 5+ years as the Harper Government representative to the USA so he can be forgiven for thinking like Harper, and indeed like the US congress neither of whom/which believe that the people of either country are anything more than a vote needed to be purchased every 2/4 years, and in between that time are there for the practice of arrogant, contemptuous behavior.  Since this has been Mr. Doer’s habitat for the last 5 years he can of course be forgiven for absorbing this attitude towards the people of both Canada and the US, but to actually come right out at the Economic Club and declare that the Canadian government should not waste any time talking to Canadians is an insult that I for one take personally.

Perhaps someone at his level of paycheck, or Minister Dion, should point out to Mr. Doer that there is a new sheriff in town who preaches consultation rather than brute force, and that it is maybe a very good thing that he will soon be replaced as a relic of the most dysfunctional and destructive government Canada has ever had.

How long I wonder before all these Harperites are smoked out and replaced by real people?

I d0 not wholeheartedly support the Liberals but I am willing to give them a chance to prove that they are serious in their desire to consult with Canadians.   As a member and the interim leader of the Canadian Action Party we have some fundamental differences particularly about Money creation through the Bank of Canada and allowing any investment profit agreements thinly disguised as so called free trade agreements back to the FTA of Mulroney and Reagan to remain in place.

We do however believe that the Canadian people should have a say in their government and their government’s actions, and it remains to be seen if the new Liberals think that as well, and their handling of the TPP and newly revived CETA with its apparently new court, which has yet to be defined while location and jurisdiction are still unknown,  will tell me all most all I need to know as to whether or not they are for real, or just another shill for the big money boys.

Fingers crossed?…maybe.

Jeremy