Panic in Ottawa after one drastic change in Canadian monetary policy

[whitedog]

Is Canada's Economy Stalled?


The Conservative government likes to boast that it has created 1.2 million jobs in the past seven years, an impressive figure on the face of it.

But take away some selective figuring by the government and those jobs represent about half of what Canada needs right now, an economist says.

Jim Stanford, an economist with Unifor, Canada's largest private sector union, said that while the Tories' job creation numbers are accurate, they're also skewed.

The main problem with the job creation boast, Stanford argued, is that the Conservatives open the argument using 2008 -- the year the financial crisis hit -- as the base year.

In that year, 400,000 jobs were lost, but Stanford said those jobs returned in the subsequent recovery -- not as a result of a job creation plan. Using that argument, the 400,000 job gains should be removed from the 1.2 million jobs figure the Conservatives cite, he said.

Overall, Stanford said Canada's economy is far weaker than the government lets on. Stanford and other economists interviewed say they believe the economy is overly reliant on housing for economic growth, and believe the economy will slow over the next five years.

Economy stagnating

Stanford said years of government austerity plus the hoarding of money by large corporations -- even in spite of low corporate taxes -- has made the economy stagnate.

"At any given point in time, the economy has four big drivers, consumers, businesses, foreigners through our exports and government," Stanford said. "Those are the four major engines of the economy and right now none of them are really in gear."

On the job creation argument, Stanford said Canada has only gained 780,000 jobs if gains are measured from 2009 and exclude the 400,000 jobs that figure into the Conservative equation.

"The more meaningful comparison would be to say 'where were we before the recession hit?'" he said. "In that regard we've fallen way, way behind population growth."

Right now, about 308,000 jobs per year have to be created to keep up with population demand, he said. That means the country actually needed 1.55 million jobs created from 2009-2014 to keep up.

As well, he said, if you factor in that about one in five of the jobs the government said have been created is filled through the Temporary Foreign Worker Program, the outlook is bleak for Canadians and residents. That would mean that temporary foreign workers have filled about 240,000 jobs of the 1.2 million that the government says it created.

Statistics Canada confirmed the temporary foreign workers are included in the job creation numbers, but said non-permanent residents or non-citizens are put in an "other" category, which could include students, refugees or temporary foreign workers.

The department's Marie-Pier Desaulniers said that "other" category represents about two per cent of Canada's overall employment figures. Pinpointing firm numbers on how many temporary foreign workers are in Canada is difficult because Statistics Canada doesn't ask a worker's status.

Foreign workers counted

"The Labour Force Survey is a household survey," Desaulniers wrote in an email. "It is possible that some temporary foreign workers do not live in private households, but instead collective dwellings (for example hotels, motels), and therefore might not be included in the survey."

In 2011, the last census, 191,000 temporary foreign workers re-entered or entered Canada, according to a paper prepared by Melissa Pang in the Library of Parliament's Social Affairs Department. That brought the total number of temporary workers from abroad to 447,000.

Stanford said the unemployment rate is a poor indicator of the state of jobs in the country because it only counts those looking for work, meaning unemployed people who have given up their job search aren't included.

Stanford said the employment rate paints a more complete picture, and shows a drop from 63.7 per cent in 2008 to 61.3 per cent after the crisis, then alternating between 61 and 62 per cent from 2009 until 2013, until a steady downward slide through 2014. At the end of January, the employment rate was 61.4 per cent.

"Our labour market is as weak as it was in the worst days of the recession," he said.

He said the government's habit of comparing Canada's job growth to other countries is also misleading because Canada's population is growing at a faster rate than in some European and Asian countries, for example.

"They often stand up and say Canada has created jobs at a faster pace than other countries in the world like Germany and Japan," Stanford said. "But Germany and Japan don't have that problem because their population is stable... they could create zero net new jobs and still have a stronger labour market because they don't have to keep up with the population."

Stanford said Canada has been relying too much on the housing market and debt for Canada's economic prosperity. Too many Canadians are propping up the economy through purchases and relying on credit to get the money.

Diana Petramala, an economist specializing in real estate at Toronto-Dominion Bank, said housing and its spin offs do contribute to about half of the Canadian economy, but that is expected to slow over the next five years.

Is Canada's Economy Stalled? - TheTyee.ca - Mobile

Despite my dislike of the current regime in power, and aside from digging the natl debt hole all the way to china, what do you all think the government could have done better? Did they make the business environment too good for oil, (suggesting that that was at the expense of other economy sectors) or did the world oil price do that? Could they have signed less free trade deals, or more of them? Raised taxes, or lowered them? Cut government services, transfer payments, or increased them. I'm just curious as to what they could have done, or should not have done, to avoid our present stagnation. It seems awful easy to toss stones without actually saying why. (Could we limit the discussion to economic possibility and leave out the political bs?)

 

[MHz]

We have the raw product, others have insisted it is their right to develop it so it makes it to market. That also happens to mean 90% of the money taken in goes to 'them' and none of 'them' live in Canada. We could have done a better job but the you would have to add in the cost of perpetual war and that doesn't come cheap. Neither does having no future.

Not worth it's own thread but this is 'interesting'.
www.youtube.com/watch?v=BkIKahML9v0#t=58

 

[darkbeaver]

Nope.

Is Ottawa in Canada?

If you mean the geographic location then I think I would answer yes but if you mean the spiritual location I think I would answer Tel-Aviv. The thinking like the banking , and they seem to be the same thing, are for some reason contracted to third parties not resident on this continent. I suppose it just means things like national policy can indeed be manufactured overseas more efficiently. I'm not sure where Ottawa is but it don't seem Canada could be the place.

 

[whitedog]

Wait a minute! What if there's no panic in Ottawa, what if the rate decrease has a more direct purpose for the Government, and not the country?

1. As of March 31, 2014, total liability was one trillion dollars. We were paying an effective interest rate of 2.8%, 28 billion in interest servicing the debt. Drop the interest rate, .25 and the government saves 2.5 billion.

2. Canadians did not benefit from lower gas prices as much as americans did. Explanation was that most gas is traded in US prices, meaning lower canadian dollar translated into more Can $ to buy US gas. Gas is subject to GST. Higher the price, more GST revenue.

3. Lower canadian dollar (it took at hit as soon as interest rate was lowered) drove up import prices (like gasoline). Higher price, more gst revenue.


All this would translate into the government finding the lost oil revenues so that it could keep its balance budget/spending promises in time for election.

Consumers didn't get a break, most banks didn't pass on a .25% drop for those with large credit debt, and likely, since the buck will buy less with respect to imported goods, aka prices will be higher, not only does the consumer have to pay more, the consumer will pay more sales tax on top of it. So perhaps this move was not done for the economy, it was done for the political aspirations of the government. But hey, don't accept my take on this, just look into it for yourself.

 

[tay]

Can't say I'm familiar with this case..........






Update on the COMER VS. Bank of Canada law suit




Today COMER (Committee on Monetary and Economic Reform EST. 1986) and constitutional lawyer Rocco Galati won yet another round of appeals.








Total News Blackout In Canada – People vs Central Bank | Max Resistance








www.youtube.com/watch?v=cgdyWPxLf1s

 

[tay]

Finally a little more attention to this case.........






Galati, who led a successful challenge against an appointment to the Supreme Court of Canada, is representing a small Toronto group whose legal bid is attracting increasing attention from people in Canada and elsewhere who distrust global financial institutions.


The unusual case originated with William Krehm, a much-travelled 101-year-old Toronto native and former Trotskyite who was in Spain during the Spanish Civil War and once stood guard over Leon Trotsky’s corpse after the Russian revolutionary was assassinated in Mexico City.



Krehm, later an economic writer, asked Galati to launch the case on behalf of his Committee on Monetary and Economic Reform (COMER). Galati first filed the case in 2011 and after several legal rounds — including a court skirmish with federal government lawyers — is expected to return to Federal Court within days to move the challenge forward.



COMER contends the Bank of Canada, a publicly owned national financial institution created in the Great Depression, is mandated to provide debt-free support for public projects undertaken by federal, provincial and city governments. Not doing so has deprived Canadians of the benefits of larger infrastructure investments, COMER alleges.



Among other arguments in its court submission, the group alleges Canada ceded its sovereign ability to conduct independent monetary policy to the “secret” deliberations and control of private foreign bankers. This unconstitutional move, COMER argues, was a result of Ottawa’s decision to join several multinational financial organizations, particularly the Bank for International Settlements (BIS).



Headquartered in Switzerland, the BIS is an organization that brings together the central banks from 60 countries to co-operate in the promotion of international monetary and financial stability. Canada joined in 1970.



“It’s by far the most serious and important case I’ve ever done,” said Galati, who gained national prominence in a classic David versus Goliath case last year in which he moved to block Prime Minister Stephen Harper’s appointment of Justice Marc Nadon to Canada’s top bench.



Of the current case, Galati says, “It impacts the entire country in a profound way, right down to the bone of our economics and the history of the way we’ve maintained and lost, through illegal action, our independent monetary policy. It’s huge.”


The federal government tried to quash the case on the grounds it was frivolous and the alleged infringement of the plaintiffs’ constitutional rights was “too uncertain, speculative and hypothetical.”



And judges noted COMER’s contention that the Bank of Canada has a mandate to provide interest-free loans to governments in Canada hinges on the interpretation of a sentence in the bank’s enabling legislation saying it “may” provide such loans.



But the courts have said Galati can proceed with an amended statement of claim.



“We have no comments on a matter that is before the courts,” the Bank of Canada stated.



But on its website, the Bank of Canada explains why it doesn’t “print money to repay the national debt or to finance government programs.” Doing so, it says, “would reduce the value of our money, raise interest rates, and undermine the growth of the economy.”

Ann Emmett, a former teacher who now chairs COMER, said she “absolutely” believes foreign banks are controlling the Bank of Canada’s actions.



“I have to tell you that the lawsuit has sparked interest around the world,” Emmett added. “They are not going to be able to put the genie back in the bottle.”



The lawsuit also alleges the federal finance minister is depriving MPs of their right to properly vet government spending by inappropriately calculating available financial resources.



The original COMER case indicated an intention to make it a class action suit, with $1 in damages for each Canadian. But it’s unclear if that part of the claim will stand.







Rocco Galati in court to challenge how Bank of Canada does business | Toronto Star

 

[tay]

The lawyer best known for stopping the Supreme Court appointment of Judge Marc Nadon has turned his sights on the Bank of Canada.


Rocco Galati has taken on a case for a group called the Committee for Monetary and Economic Reform, or COMER, which wants the central bank to return to the practice of lending federal and provincial governments interest-free money for infrastructure.


The Bank of Canada was set up in 1935 in the wake of the Great Depression to provide a means for settling international accounts and to provide interest-free loans to government to finance infrastructure investments.


Projects like the St. Lawrence Seaway and the Trans-Canada highway were funded in this way, and the central bank also underwrote Canada's Second World War effort as well as the building of hospitals and universities.



But in 1974, the central bank stopped providing interest-free loans to government so it could join the Bank for International Settlements, a kind of central bank of central banks.



Galati argues that from then on private banks became government's lender, contravening the act that established the central bank.



He has launched legal action, beginning in 2011, to rule on the constitutionality of the central bank's current role. His argument is that private banks are dictating the terms of Canadian debt, usurping the role of the Bank of Canada.


"My hope is that the court declare that the government is bound by the legislation and cannot simply hand over that decision-making to foreign private bankers," Galati said.


"What the government then does is up to the government, but they can't simply arbitrarily say 'no never again' when the law is there and the history of the reason for creating the Bank of Canada is there."


The Committee for Monetary and Economic Reform takes the view that having the Bank of Canada provide funding would eliminate interest payments on the national debt — a huge burden for the Canadian taxpayer.


Galati agrees the case is a strange and quixotic one, but he's built a career on holding the government to the law.
"It wasn't arcane for me, it's in the law," he said.



And he acknowledged it will probably earn him few friends. He'll never be made a judge or even sit on a law faculty. And it will be a long fight.



"Well, most struggles to enforce the law are. I mean, often, I've had cases that have gone 12 years, successfully at the end of the day, because the government simply wants to ignore the law," he said.


Last year when Prime Minister Stephen Harper nominated Nadon to the Supreme Court, Galati stepped in, saying the move broke the rules. Few expected him to win. But in a surprise decision, he did.


"I saw an attempt to pervert and subvert our independent judiciary, which is the last bastion of balancing the rights of the citizens against the rights of the government and making sure that the government doesn't turn into a dictatorship," he said. "If you can stack the court and corrupt the judiciary, well, that's it."



Galati said he believes Parliament has become ineffective in checking the power of government and the courts are the only recourse.




more




Rocco Galati challenges role of Bank of Canada in latest case - Business - CBC News

 

[tay]

One of the most important legal cases in Canadian history is slowly inching its way towards trial.


On October 14, a Federal Court judge cleared away yet another legal roadblock thrown in the lawsuit’s path. The federal government has tried to quash the case as frivolous and “hypothetical,” but the courts keep allowing it to proceed. As Galati maintains, “The case is on solid legal and constitutional grounds.”

When asked after the October procedural hearing why Canadians should care about the case, Galati quickly responded: “Because they’re paying $30 or $40 billion a year in useless interest. Since ’74, more than a trillion to fraudsters, that’s why they should care.”

Created during the Great Depression, the Bank of Canada funded a wide range of public infrastructure projects from 1938 to 1974, without our governments incurring private debt. Projects like the Trans-Canada highway system, the St. Lawrence Seaway, universities, and hospitals were all funded by interest-free loans from the Bank of Canada.

But in 1974, the Liberal government of Pierre Trudeau was quietly seduced into joining the Bank for International Settlements (BIS) – the powerful private Swiss bank which oversees (private) central banks across the planet. The BIS insisted on a crucial change in Canada.

But given the importance of infrastructure-spending in the recent federal election campaign, it’s amazing (and sad) that the COMER lawsuit was so ignored, even by the political parties – especially the NDP.

With the Harper government touting its ten-year, $14 billion Building Canada Fund, and the Liberal Party of Justin Trudeau promising to double that amount of funding by running three years of deficits, the NDP led by Tom Mulcair pledged to balance the budget. The NDP could have explained and championed the COMER lawsuit and even possibly utilized it to somehow justify the balanced-budget promise – a platform plank that likely cost it the election.

In August, Justin Trudeau spoke vaguely about financing infrastructure spending with a new bank. As a COMER litigant wrote in their newsletter, “During the recent federal election, Trudeau floated an interesting plank about creating an infrastructure bank. My first response was ‘You already have one. The Bank of Canada.’ My second question was, ‘Public or private?’ Again we see both the colossal ignorance and deliberate obfuscation of money issues in this country by our leadership.”

A Liberal Party Backgrounder explained, “We will establish the Canada Infrastructure Bank (CIB) to provide low-cost financing to build new infrastructure projects. This new CIB will work in partnership with other orders of governments and Canada’s financial community, so that the federal government can use its strong credit rating and lending authority to make it easier – and more affordable – for municipalities to finance the broad range of infrastructure projects their communities need … Canada has become a global leader in infrastructure financing and we will work with the private sector and pools of capital that choose for themselves to invest in Canadian infrastructure projects.”

It’s those “pools of capital” – including Wall Street titans like Goldman Sachs – that are set to profit handsomely from Canada’s new infrastructure lending and spending spree.

more

http://www.watershedsentinel.ca/content/bank-canada-lawsuit