Throughout the 2008-2010 financial crisis, Canadian banks were touted by the federal government—and the banks themselves—as being much more stable than other countries’ big banks. Canadians we assured that our banks needed no bailout. However, CCPA’s latest study, The Big Banks’ Big Secret: Estimating Government Support for Canadian Banks During the Financial Crisis, suggests that this was not the case.
The study reveals that Canada’s banks received $114 billion in cash and loan support from both the U.S. and Canadian governments during the 2008-2010 financial crisis. The study estimates that at some point during the crisis, three of Canada’s banks—CIBC, BMO, and Scotiabank—were completely under water, with government support exceeding the market value of the bank.
Due to government secrecy, the study raises more questions than it answers and calls on the Bank of Canada and CMHC to release the full details of how much support each Canadian bank received, when they received it, and what they put up as collateral.
Click here to read the full report.
OTTAWA – Dans une étude dévoilée aujourd’hui par le Centre canadien de politiques alternatives (CCPA), les auteurs calculent l’ampleur auparavant secrète de l’aide extraordinaire dont les banques du Canada ont eu besoin au cours de la crise financière.
Selon l’étude réalisée par David Macdonald, économiste principal du CCPA, l’aide accordée aux banques canadiennes a atteint 114 milliards de dollars à son point culminant – soit 3 400 $ par homme, femme et enfant au Canada.
« À un moment donné au cours de la crise, trois des banques du Canada – CIBC, BMO et Banque Scotia – étaient complètement submergées et l’aide du gouvernement dépassait leur valeur marchande, déclare M. Macdonald. Sans l’aide du gouvernement, les banques du Canada auraient connu de sérieuses difficultés. »
Entre octobre 2008 et juillet 2010, les principales banques du Canada ont compté énormément sur les programmes d’aide financière fournie par la Banque du Canada, la Société canadienne d’hypothèques et de logement (SCHL) et la Réserve fédérale des États-Unis – qui sont toutes intervenues en même temps.
Au cours de toute la période d’aide, les banques du Canada ont déclaré un bénéfice de 27 milliards de dollars au total et les chefs de la direction de chacune des grandes banques était au nombre des dirigeants canadiens les mieux rémunérés. Entre 2008 et 2009, la rémunération totale du chef de la direction de chaque banque a augmenté de 19 % en moyenne.
« Le gouvernement fédéral affirme qu’il offrait aux banques un « soutien à la liquidité », mais pour moi, ça ressemble étrangement à un sauvetage, déclare M. Macdonald. Peu importe le nom qu’on y attache, l’aide que le gouvernement canadien a accordée aux grandes banques du pays était beaucoup plus indispensable que ne le laissait entendre la position officielle. »
Dans l’étude, l’auteur calcule la valeur de l’aide gouvernementale en analysant des données fournies par la SCHL, le Bureau du surintendant des institutions financières et la Banque du Canada, ainsi que les rapports trimestriels des banques mêmes.
À cause du secret imposé par le gouvernement, l’étude soulève plus de questions qu’elle ne présente de réponses. M. Macdonald demande à la Banque du Canada et à la SCHL de dévoiler les détails complets du montant de l’aide que chaque banque canadienne a reçue, quand elles l’ont reçue et le nantissement qu’elles ont accordé.
« Un secteur bancaire solide et résilient ne peut fonctionner sous le voile du secret. Au nom de la transparence et de la responsabilité, il faut dévoiler les détails de l’aide massive que les banques canadiennes ont reçue des contribuables, affirme M. Macdonald. Il faut resserrer la réglementation du secteur financier afin d’éviter que des mesures semblables soient nécessaires à l’avenir. »
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The Big Banks’ Big Secret: Estimating Government Support for Canadian Banks During the Financial Crisis est disponible sur le site Web du CCPA : http://policyalternatives.ca
Pour en savoir davantage, communiquer avec Kerri-Anne Finn, agente principale des Communications, Centre canadien de politiques alternatives, au 613 563‑1341, poste 306 ou à l’adresse kerri@policyalternatives.ca.
It is argued by some that eligibility for Old Age Security (OAS) and the Guaranteed Income Supplement (GIS) at age 65 discourages older Canadians from remaining in the workforce, and that we need to keep them working longer to avoid present and future labour shortages and a sharp rise in the so-called “dependency” ratio. Accordingly, the federal government proposes to phase-in an increase in the age of eligibility from age 65 to age 67, affecting Canadians who are now 54 and younger.
A new CCPA report, Working After Age 65: What is at Stake?, looks at some of the realities of working past age 65, and examines the potential impact of increasing the OAS eligibility age. The report finds that forcing Canadians without workplace pensions or large savings to work full-time past age 65 is unfair—especially given the high probability that the jobs many are able to find will be part-time and low paid.
Read the full report here.
The Greek Economic Crisis and Implications for Europe
The economic and fiscal crisis in Greece continues to deepen, with the outcome at this point unknown. One scenario sees Greece leaving the euro zone, with very
serious implications for Europe. To shed light on this perilous situation, the Centre for the Study of Living Standards and the Canadian Centre for Policy Alternatives have organized a luncheon with Richard Parker from Harvard University. From 2009 to 2011 he served as economic advisor to Greek Prime Minister George Papandreou, an experience that gives him a unique perspective on the Greek crisis.
Richard Parker teaches in the Kennedy School of Government at Harvard University. An Oxford-trained economist, his career has included journalism (he co-founded the magazine Mother Jones and chairs the editorial board of The Nation); philanthropy (as executive director of two foundations he donated more than $40 million to social-change groups); social entrepreneurship (he grew environmental group Greenpeace from 2,000 to 600,000 supporters, helped launch People for the American Way, and raised over $250 million for some 60 non-profits), and political consulting (advising, among others, Senators Kennedy, Glenn, Cranston, and McGovern).
His books include The Myth of the Middle Class, an early study of widening U.S. income and wealth distribution, Mixed Signals: The Future of Global Television, a critical assessment of the spread of satellite-based news and its political impacts, and the intellectual biography, John Kenneth Galbraith: His Life, His Politics, His Economics , which traces the history of 20th century economic theory and policy through the career of Harvard's most famous economist. This latter book has been described by William F. Buckley as "the best biography of the century", and by Keynes' biographer Robert Skidelsky as "an unparalleled achievement
There's a growing movement in Canada to pressure our governments to ask those who have more to give to contribute more in taxes. A new Environics Poll for the
Broadbent Institute shows 83% of Canadians favour raising taxes on the richest. And a new movement, Doctors for Fair Taxes reflects a growing number of Canadians are willing to do their part. But there is some resistance, and we're not just talking about Canada's politicians. Watch CCPA's Senior Economist Armine Yalnizyan speak truth to power in this CTV debate with a strenuous opponent to higher taxes on the rich.
The Broadbent Institute has launched its new Equality Project with a poll by Environics Research that shows the majority of Canadians view growing income inequality as a big problem with long-term consequences - a problem that undermines Canadian values. The poll also shows Canadians are ahead of their politicians in supporting the need for higher taxes to protect social programs. And this finding: 83% of Canadians support raising taxes on the richest.
See the poll here and an op-ed by Ed Broadbent in the Toronto Star here.
In spite of system and systemic failure, young people are—with creativity, passion and determination—fighting for change across sectors and within communities. They are pushing the progress envelope. And we need to celebrate their victories and support them with knowledge, with numbers, and with resources.
The spring 2012 issue of Our Schools / Our Selves, Power of Youth: Youth and community-led activism in Canada, looks at the personal stories of young activists and organizers in Canada and how they are using activism and organizing to bring about change in whatever issue they are working on.
The book, edited by Brigette DePape, explores grassroots activism across a variety of themes, and it shows the concrete work young people are doing, as well as highlighting challenges they face, lessons learned, ways forward, and bold visions for the future.
Click here to preview and order Power of Youth: Youth and community-led activism in Canada.
CCPA not only does first-rate research; it also connects with the real world by putting powerful information in the hands of advocacy groups and by presenting intelligent, progressive ideas in the media. It is a BC jewel and I urge everyone to support it.
— Kathleen Ruff, founder, RightOn Canada