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
