December 06, 2019
'Secret' memo outlines tools the finance department and Bank of Canada could use in a recession
An internal memo addressed to federal Finance Minister Bill Morneau in August outlined a range of fiscal and monetary policies the Liberals and the Bank of Canada could employ in the event of "economic shocks" — a range that includes lowering interest rates even further and relying on Employment Insurance.
The August memo, marked "secret," was released to CBC last month through the federal Access to Information Act. It's leading some economists to call on the government to prioritize some tools over others, and to consider at least one unprecedented economic strategy.
The unredacted portions of the memo don't cite any specific recession warning signs — but the document does note that, since the 1970s, Canada has experienced four significant recessions, one per decade. Canada's last recession happened in 2008-09, triggered by the U.S. housing bubble.
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Bank act 1938 (public Bank) was created to float interest free loans to government for human capital expenditures. It ran very well for many years without running a significant deficit. The bank of Canada joined the Bank of International Settlements in 1974 in Basil Switzerland un the PM Pierre Trudeau. It then became increasingly more in debt as it was no longer operating as it was intended.
Canada is the only public bank in the g 20. All other banks are private. Sec 17 of the Bank of Canada Act says, The minister of finance holds all shares on behalf of her majesty the queen, in other words the minister holds all the assets of Canada on behalf of the people of Canada. Under sec 14 of the Bank Of Canada Act, The minister of finance has the final say over the governor of the Bank of Canada. Since 1974 the Minister of finance has refused to request these loans for human capital expenditures. The way these loans worked was they were interest free up to a maximum of 1/3 of the annual budget, which had to be paid in the next fiscal year. This avoided the interest and so no accumulating debt. Now here is a bizarre fact...For years now the Bank of Canada has started floating loans to the commercial banks at around 1/2 a percent interest. The commercial banks then turn around and lends it back to the government at a commercial rate 2 or 3 times higher than what the bank of Canada lent it to them at. This begs the question WHY? The Bank of Canada is taking orders from a bunch of private bankers in Europe and they determine Canadian sovereignty with respect to currency, interest and Canadian socioeconomic development.
The second part of the problem is the finance ministers refusal and inaction in providing the house of commons the true figure of total revenues every year before the house of commons decides to borrow to meet its budgetary needs, for instance they say we have revenues of 240 billion we have budgetary needs of 280 billion so we are going to borrow 40 billion. That's not actually accurate. They don't get the actual revenue collected or collectable before the various tax credits under the taxing statutes are remitted back to the tax payers. that includes everything from child tax credits to research and developments all sorts of corporate tax credits that go back. So parliamentarians don't have the true revenues. Why this is important is because if they did, they could effectively debate if running a deficit or not running a deficit is in our best interests and pay all this interest to commercial banks. Where that ties into is there is a constitutional right to no taxation without representation in the Canadian constitution. If the parliamentarians do not have all the figures and facts they cannot effectively debate what taxation levels are necessary. If they did they could debate whether or not they wanted to run a deficit.
It is often argued that having the Bank of Canada issue noninterest bearing loans is inflationary. Somehow it is much more beneficial to have the Bank of Canada borrow the money from Commercial banks at interest. This is simply not true as any child could tell you if you posed the question to him simply without economic doublespeak.
"Once a nation parts with the control of its currency and credit,
it matters not who makes the nations laws. Usury, once in control,
will wreck any nation. Until the control of the issue of currency
and credit is restored to government and recognized as its most sacred
responsibility, all talk of the sovereignty of parliament and
of democracy is idle and futile." by: William Lyon Mackenzie King
(1874-1950) Prime Minister of Canada
Date: 1935
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