Liberal government's first budget 22 March 2016

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Pondering

I don't like this at all.

http://www.huffingtonpost.ca/2016/03/25/bill-morneau-liberal-promises_n_...

“I think we’ve absolutely met up to our promises,” he told The Huffington Post Canada during an interview in his 17th-floor corner office on Thursday.

“We said that there has been a real challenge for middle class Canadians over a generation, and we said that we’re dealing with low growth over the last decade. [The] most important thing that we said to Canadians was we are going to deal with middle class Canadians’ challenges, and we’ve started right down the path of doing that.”

 

Say that although some changes were made you kept to the spirit of the budget, for the most part delivered what Canadians are expecting but own up to the fact that all the promises were not kept in this budget and tell me why not. Don't give me a line.

 

mark_alfred

I wonder how many more times that article will be posted on Babble.

mark_alfred

Mulcair comments on the budget, explaining why the NDP will be voting against it:  http://www.cbc.ca/player/play/2685885757/

terrytowel

Double Posting

Michael Moriarity Michael Moriarity's picture

Pondering wrote:

I don't like this at all.

http://www.huffingtonpost.ca/2016/03/25/bill-morneau-liberal-promises_n_...

“I think we’ve absolutely met up to our promises,” he told The Huffington Post Canada during an interview in his 17th-floor corner office on Thursday.

“We said that there has been a real challenge for middle class Canadians over a generation, and we said that we’re dealing with low growth over the last decade. [The] most important thing that we said to Canadians was we are going to deal with middle class Canadians’ challenges, and we’ve started right down the path of doing that.”

 

Say that although some changes were made you kept to the spirit of the budget, for the most part delivered what Canadians are expecting but own up to the fact that all the promises were not kept in this budget and tell me why not. Don't give me a line.

 

As many of us have been trying to tell you, this is the Liberal way. Run left, govern right, lie their asses off. You were oh so confident that this time it would be different, but...

Lucy and Charlie

Basement Dweller

Oh dear, it appears Metro Vancouver might not get billions of dollars in federal infrastructure funding due to our local political dysfunction.

http://www.cbc.ca/news/canada/british-columbia/bridge-tolling-metro-vanc...

I hope this can be worked out. If not, the BCNDP better make sure BC Liberals suffer for it.

JKR

mark_alfred wrote:

Mulcair comments on the budget, explaining why the NDP will be voting against it:  http://www.cbc.ca/player/play/2685885757/

It seems to me what Mulcair is saying is that the federal government should be spending more, taking in a bit more than they are now, and also be running balanced budgets over the short term. I don't see how that's possible all at the same time. During the election the voters didn't buy this approach and I think they still don't. Instead I think the NDP should be supporting something more similar to the CCPA's alternative budget.

mark_alfred

Indigenous issues (particularly living up to the HRT decision that Blackstock also referred to), keeping the promise on taxing stock options, and proper EI reform that will not exclude the many currently in need, are what I heard Mulcair cite.  Totally valid criticisms, in my opinion.

Debater

Michael Moriarity wrote:

Pondering wrote:

I don't like this at all.

http://www.huffingtonpost.ca/2016/03/25/bill-morneau-liberal-promises_n_...

“I think we’ve absolutely met up to our promises,” he told The Huffington Post Canada during an interview in his 17th-floor corner office on Thursday.

“We said that there has been a real challenge for middle class Canadians over a generation, and we said that we’re dealing with low growth over the last decade. [The] most important thing that we said to Canadians was we are going to deal with middle class Canadians’ challenges, and we’ve started right down the path of doing that.”

 

Say that although some changes were made you kept to the spirit of the budget, for the most part delivered what Canadians are expecting but own up to the fact that all the promises were not kept in this budget and tell me why not. Don't give me a line.

 

As many of us have been trying to tell you, this is the Liberal way. Run left, govern right, lie their asses off. You were oh so confident that this time it would be different, but...

Lucy and Charlie

Actually, Michael, as Adam Radwanski and Thomas Walkolm wrote this week, this Liberal budget is very different from the Chrétien-Martin years.  It is putting investment & social programs as the priority, and going into deficit, rather than slashing & cutting.

As the commentators pointed out, this may change later in the mandate, but at this point in time, the NDP doesn't really have a lot of justification for attacking the Liberals, particularly since the NDP hasn't explained how it would balance the budget if it were in power right now.

JKR

mark_alfred wrote:

Indigenous issues (particularly living up to the HRT decision that Blackstock also referred to), keeping the promise on taxing stock options, and proper EI reform that will not exclude the many currently in need, are what I heard Mulcair cite.  Totally valid criticisms, in my opinion.

I agree with Mulcair's position on those issues. He also cites maintaining balanced budgets or small deficits which I think does not make sense right now as evidenced by the CCPA's alternative budget. I think unfortunately the CCPA and the Liberals seem to have a better understanding of what generally concerns the public than the NDP does. I think this helps explain the difference in the NDP's and Liberal's political success lately. I think the NDP has got to get better information on where the public is at. I think unfortunately Mulcair does not seem have a strong intuitive feel for general public opinion and unfortunately neither does his top staff.

mark_alfred

I feel that focussing on the revenue side, as Mulcair mentioned, is the leftward way to go (something the Libs aren't doing).  As he said, if situations change, then government may need to modify its financial projections (IE, this recent budget, or back in 2008).  Still, keeping taxes low while not living up to commitments on EI or Indigenous children, as the Libs are doing, is not good, and I'm glad Mulcair is opposing it.

Debater

The new Abacus poll shows that the majority of NDP voters support the Liberal budget, so I think Mulcair may be losing his sense of reality by opposing it.

I think it's more of a political stunt and a prelude to his trying to save face before the NDP Leadership Review in 2 weeks.

Michael Moriarity Michael Moriarity's picture

Debater wrote:

Actually, Michael, as Adam Radwanski and Thomas Walkolm wrote this week, this Liberal budget is very different from the Chrétien-Martin years.  It is putting investment & social programs as the priority, and going into deficit, rather than slashing & cutting.

As the commentators pointed out, this may change later in the mandate, but at this point in time, the NDP doesn't really have a lot of justification for attacking the Liberals, particularly since the NDP hasn't explained how it would balance the budget if it were in power right now.

Well, I was responding to Pondering's complaint, but you do have a point. It's an unusual case. The common practice is for a government to enact its most unpopular measures in the first 2 years of a mandate, then turn to more popular items as the next election approaches. In this case, Trudeau used deficit spending in the first 2 years as a very successful wedge against the NDP during the campaign. This forces him to reverse the order, giving out whatever goodies he can at the start of his mandate, and saving the punishing stuff to the end. That may be good news for the CPC if they can find a sane and fairly attractive leader.

JKR

mark_alfred wrote:

I feel that focussing on the revenue side, as Mulcair mentioned, is the leftward way to go (something the Libs aren't doing).

I agree that focussing on the revenue side would be very beneficial and that the Liberals are failing at this. But unfortunately the NDP is not proposing major increases to net revenue close to what the CCPA are proposing. I think the NDP has also failed at focussing sufficiently on the revenue side. This especially does not make sense when coupled with the NDP's pledge to maintain balanced budgets. I think the NDP's budgetary math is suspect and I think the general public feels this as well. I think this hurt the NDP in the election and might continue doing so as long as the NDP can't come up with a more convincing position on macro economics. Unfortunately in recent elections, provincially and federally, the NDP does not seem as able to understand the public's mood as well as their competitors.

JKR

Michael Moriarity wrote:

Debater wrote:

Actually, Michael, as Adam Radwanski and Thomas Walkolm wrote this week, this Liberal budget is very different from the Chrétien-Martin years.  It is putting investment & social programs as the priority, and going into deficit, rather than slashing & cutting.

As the commentators pointed out, this may change later in the mandate, but at this point in time, the NDP doesn't really have a lot of justification for attacking the Liberals, particularly since the NDP hasn't explained how it would balance the budget if it were in power right now.

Well, I was responding to Pondering's complaint, but you do have a point. It's an unusual case. The common practice is for a government to enact its most unpopular measures in the first 2 years of a mandate, then turn to more popular items as the next election approaches. In this case, Trudeau used deficit spending in the first 2 years as a very successful wedge against the NDP during the campaign. This forces him to reverse the order, giving out whatever goodies he can at the start of his mandate, and saving the punishing stuff to the end. That may be good news for the CPC if they can find a sane and fairly attractive leader.

I think the Liberals could also continue continue giving out goodies and having deficits in the last two years of their mandate with the hope that they will get credit for having improved the economy during the 2019 election.

Debater

The new Abacus poll shows the Liberals gaining 3 points after the Budget -- from 44 to 47.

This Week: LPC 47, CPC 28, NDP 14

Last Week: LPC 44, CPC 29, NDP 16

http://abacusdata.ca/wp-content/uploads/2016/03/EY-Abacus-Budget-Release...

White Cat White Cat's picture

Debater wrote:

The new Abacus poll shows the Liberals gaining 3 points after the Budget -- from 44 to 47.

This Week: LPC 47, CPC 28, NDP 14

Last Week: LPC 44, CPC 29, NDP 16

http://abacusdata.ca/wp-content/uploads/2016/03/EY-Abacus-Budget-Release...

Junior's empty-calorie budget certainly got a lot of help from his elitist friends in the establishment media.

It's an establishment kind of budget: throw the people a couple bones plus new tax cuts for the wealthy piled on top of 3 decades of tax cuts for the wealthy. (Our betters would rather give the people nothing, of course — except hundreds of billions of dollars in government debt.)

I hope the NDP dumps Mulcair, but for opposite reasons than what the shallow, calculated scheming of Liberal partisans is based on.

Bernie Sanders and Jeremy Corbyn show the times they are a changing. Trudeau is, ironically, yesterday's man clinging to the failed ideology that free trade and low taxes create middle class jobs and grow the economy. We have 25 years of consistent evidence that show the opposite is true. (Not sure how anyone can take this nonsense seriously.) Mulcair is the same kind of political animal : a Red Tory in Liberal's clothing.

Canada needs a true leader of the actual center-left — who actually believes in it — to start tearing up the place: i.e., expose these bribe-taking politicians and their masters' looternomics; talk over the on-the-take talking heads and connect directly to the people.

Mulcair might be an excellent Parliamentarian. (Not that anyone gives a crap.) But Canadians desperately need a real leader with real vision and ideas that are in stark contrast to all the failed corrupt bullshit we've had to put up since Reagan and Mulroney.

We are living in a terrible period in human history that has all but destroyed everything we built up in the post-war era. It has put civilization on the verge of collapse. We need actual real generational change: a New Deal to undo the damage done. We cannot afford to pretend any longer.

White Cat White Cat's picture

JKR wrote:

I think the Liberals could also continue continue giving out goodies and having deficits in the last two years of their mandate with the hope that they will get credit for having improved the economy during the 2019 election.

Prince Charming's $20-billion stimulus package is half of Harper's $40-billion stimulus package. Although it's true that actual fiscal stimulus will stimulate demand and grow the economy, pretend fiscal stimulus won't have quite the same kick.

Trudeau seems to be a lot like Hebert Hoover, except he's spending less on infrastructure. Trudeau's doubling of Harper's infrastructure spending — from $65-billion over 10 years to $125-billion — won't even tackle the $125-billion infrastructure deficit we have now. A surplus of infrastructure spending is required to provide fiscal stimulus.

A lot could be accomplished by reversing failed tax cuts and bringing in new public benefits that increase disposable income and properly distribute incomes, like daycare, pharmacare, restoring UI benefits, restoring provincial transfers, etc. What Nobel laureate Joseph Stiglitz calls "trickle-up economics."

But Trudeau is only interested in creating a public image that he's doing something. (Although Trudeau and his team are experts at polish, it's just new polish on an old turd.)

JKR

White Cat wrote:

JKR wrote:

I think the Liberals could also continue continue giving out goodies and having deficits in the last two years of their mandate with the hope that they will get credit for having improved the economy during the 2019 election.

Prince Charming's $20-billion stimulus package is half of Harper's $40-billion stimulus package. Although it's true that actual fiscal stimulus will stimulate demand and grow the economy, pretend fiscal stimulus won't have quite the same kick.

Trudeau seems to be a lot like Hebert Hoover, except he's spending less on infrastructure. Trudeau's doubling of Harper's infrastructure spending — from $65-billion over 10 years to $125-billion — won't even tackle the $125-billion infrastructure deficit we have now. A surplus of infrastructure spending is required to provide fiscal stimulus.

A lot could be accomplished by reversing failed tax cuts and bringing in new public benefits that increase disposable income and properly distribute incomes, like daycare, pharmacare, restoring UI benefits, restoring provincial transfers, etc. What Nobel laureate Joseph Stiglitz calls "trickle-up economics."

I agree. I wish the NDP under Mulcair were currently on this wavelength. I think the NDP would have done better in the election if they had clearly supported "trickle up economics." Hopefully by 2019 the NDP will have a clear consistent message for the voters whoever the leader is then.

Debater

The leader may still be Tom Mulcair.

mark_alfred

I note from the Abacus poll that one of the most popular measures in the budget is the tax cut, whereas the least popular measure is support for the CBC.  I myself don't care about the tax cut -- and in fact feel it's a mistake -- whereas I quite like the CBC and still have fond memories of the Beachcombers, SCTV, Knowlton Nash, the Friendly Giant, etc.

mark_alfred

Federal NDP's Tom Mulcair condemns Liberal budget for not reversing Stephen Harper's corporate tax cuts

Quote:

Finance Minister Bill Morneau's first federal budget has received a strong thumbs down from NDP Leader Tom Mulcair.

In a party news release, Mulcair claimed that the Trudeau government "shortchanged" First Nations education by $230 million and First Nations child welfare by $130 million.

In addition, Mulcair accused the government of failing to establish a fairer threshold for eligibility for employment insurance and continuing to raid the EI fund by removing $7 billion for general revenue.

In addition, the NDP leader pointed out that the budget did not reverse Stephen Harper's corporate tax cuts for profitable corporations. Nor did Morneau take any action to "eliminate costly stock option loopholes for CEOs".

“Every budget is about choices,” Mulcair said. “And Liberals have chosen tax breaks to CEOs and profitable corporations over helping seniors, First Nations children, and the unemployed.”

Debater

mark_alfred wrote:

I note from the Abacus poll that one of the most popular measures in the budget is the tax cut, whereas the least popular measure is support for the CBC.  I myself don't care about the tax cut -- and in fact feel it's a mistake -- whereas I quite like the CBC and still have fond memories of the Beachcombers, SCTV, Knowlton Nash, the Friendly Giant, etc.

Yes, but we have to keep in mind that you (and I) are probably farther to the left than most Canadians.

I think support for the CBC & the arts is important too, but it appears that view is not shared by all.

White Cat White Cat's picture

G&M: Provinces will feel the bite when it comes to health care transfers

Konrad Yakabuski wrote:
All this activism makes the budget’s silence on health care all the more curious. Not only is there no commitment to restore the former Harper government’s cuts to provincial health transfers, which take effect in 2017, but the budget did not even follow through on Prime Minister Justin Trudeau’s campaign promise to boost spending on home care by $3-billion over four years.

The budget’s fiscal projections show that, starting next year, the Canada Health Transfer will rise in line with nominal growth in gross domestic product, rather than the 6-per-cent annual increases the provinces have pocketed in the past decade.

If no deal is struck on a new health accord before next year, the shock will be brutal for debt-burdened provinces with aging populations.

This references one of the funniest elements of the last nonsense election campaign (which I was smart enough to opt out of.) You had all these commercials talking about the $36-billion cuts Harper made to healthcare transfer and how we must Stop Harper! Yet Trudeau quietly supported these cuts!

I remember talking about it. But no one else was.

This shows the folly of people in the political social media being directed by what pundits in the captured news media are talking about. This allows them to control the social media.

Another issue I've been talking about since Harper's 2009 budget, is his $50-billion a year in "starve the beast" tax cuts — all of which Trudeau supports. This on top of the Chretien tax cuts. That on top of the Mulroney tax cuts.

If no one is talking about this $100-billion (or so) that we are paying out to the rich — each and every year — the damage will never be undone. We will always be struggling to make ends meet. Always forced to make more cutbacks. Always have anemic GDP growth and always have a heavy debt burden (measured in debt divided by GDP, which can only be reduced by GDP growth — e.g., 1/3 is less than 1/2.)

The captured news media is not going to tell you taxes were cut by $100-billion a year. They are going to tell you Trudeau is Tommy Douglas.

White Cat White Cat's picture

BTW, these healthcare cuts are a double whammy because they are "pro-cyclical."

This is a very important concept in economics. Keynes invented the idea of using the government budget as a counterweight to tame boom-to-bust economic cycles. That is, counter-cyclical measures.

When the economy is in recession, spending goes up to compensate. Much of these counter-cyclical measures are built in. They are called "automatic stabilizers" (like unemployment insurance claims go up in a recession, so more government money is paid out.)

So Harper's pro-cyclical healthcare funding means it drops to the minimum when the deficit spikes in a recession because of the payouts in automatic stabilizers. That means the provinces get hit twice as hard: reduced healthcare transfers and mounting costs.

Are any pundits complaining that the Harper/Trudeau funding formula is pro-cyclical and the very opposite of sound economic fiscal policy according to macroeconomics 101?

terrytowel

Toronto MP Adam Vaughan gets into a fight with finance minister Bill Morneau over the budget.

http://www.cbc.ca/news/politics/morneau-adam-vaughan-housing-debate-1.35...

Debater

White Cat wrote:

The captured news media is not going to tell you taxes were cut by $100-billion a year. They are going to tell you Trudeau is Tommy Douglas.

That article by Chris Hall is from last Fall and appears to mainly refer to the whole deficit issue -- the fact that the Liberals were willing to run a deficit but that the Mulcair NDP wasn't.

But I agree with you that Chris Hall strikes me as one of the more Conservative reporters at CBC.

mark_alfred

*

White Cat White Cat's picture

Debater wrote:

White Cat wrote:

The captured news media is not going to tell you taxes were cut by $100-billion a year. They are going to tell you Trudeau is Tommy Douglas.

That article by Chris Hall is from last Fall and appears to mainly refer to the whole deficit issue -- the fact that the Liberals were willing to run a deficit but that the Mulcair NDP wasn't.

But I agree with you that Chris Hall strikes me as one of the more Conservative reporters at CBC.

Do you believe in your own bullshit? Or do you simply believe in nothing?

Debater

Do you have an intelligent question you want to ask, White Cat?

swallow swallow's picture

I suspect he is wondering if you have any coherent belief system that you'd like to share. 

mark_alfred

White Cat wrote:

G&M: Provinces will feel the bite when it comes to health care transfers

Konrad Yakabuski wrote:
All this activism makes the budget’s silence on health care all the more curious. Not only is there no commitment to restore the former Harper government’s cuts to provincial health transfers, which take effect in 2017, but the budget did not even follow through on Prime Minister Justin Trudeau’s campaign promise to boost spending on home care by $3-billion over four years.

The budget’s fiscal projections show that, starting next year, the Canada Health Transfer will rise in line with nominal growth in gross domestic product, rather than the 6-per-cent annual increases the provinces have pocketed in the past decade.

If no deal is struck on a new health accord before next year, the shock will be brutal for debt-burdened provinces with aging populations.

This references one of the funniest elements of the last nonsense election campaign (which I was smart enough to opt out of.) You had all these commercials talking about the $36-billion cuts Harper made to healthcare transfer and how we must Stop Harper! Yet Trudeau quietly supported these cuts!

The health care policy of the Liberals is troubling.  They never committed to renew the health care accord at a minimum of 6%.  And the last budget doesn't even live up to the home care funding that they promised.  I suspect they're setting the stage for another round of Martin-like cuts to health care.

White Cat White Cat's picture

Debater wrote:

White Cat wrote:

The captured news media is not going to tell you taxes were cut by $100-billion a year. They are going to tell you Trudeau is Tommy Douglas.

That article by Chris Hall is from last Fall and appears to mainly refer to the whole deficit issue -- the fact that the Liberals were willing to run a deficit but that the Mulcair NDP wasn't.

But I agree with you that Chris Hall strikes me as one of the more Conservative reporters at CBC.

The column was not written "last Fall" but right in the midst of the election campaign on Sept 12. (About 5 days after Labor day when the real campaign began.) This while Mulcair was leading the center-left vote. (Trudeau having lost the big lead he held since becoming leader for being too right wing.)

So here the "Conservative" partisan Chris Hall has taken it upon himself, as every good journalist should, to help salvage the Trudeau campaign by using his position of public trust to misinform the people that not only is Trudeau left of Mulcair, he represents real traditional NDP values.

(Old-time Liberals like Chretien, who was once part of an actual centrist liberal government under Trudeau Sr., called NDPers "Liberals in a hurry." Of course, these days the Conservatives are really Liberals in a hurry: in a hurry to implement neoliberal policies that destroy the Just Society real Liberals and NDPers built up during the post-war Keynesian era.)

As an actual centrist Keynesian liberal, I was fucking furious with this partisan-messaging piece predicated on lies, corruption and abuse of the public trust. This is no different than a judge taking a bribe.

(I would say, 'no different than a politician taking a bribe,' but that has apparently become acceptable in our present debauched period in history. Civilization has embarked upon a deflationary death spiral founded on corrupt public servants, and their plutocrat masters, lying to the people and looting the place for everything they can steal.)

White Cat White Cat's picture

So let's recap. Is daycare right of Trudeau? Is reversing $15-billion a year in failed corporate tax cuts?

Is opposing TPP free trade? (Which, BTW, both Bernie Sanders and Hillary Clinton are doing. The latter — the quintessential bribe-taking politician who got in on the ground floor with her hubby back in the days when they were deregulating and anti-regulating the financial industry that would produce the 2000s Bust Out and 2008 global financial meltdown — disingenuously. [See "Inside Job."])

Is federal carbon pricing right of Trudeau? Is reversing decades of UI cuts that turned an insurance program into a tax on poor workers — 6 out of 10 who pay into benefits they are ineligible to receive?

Are upper-middle-class income tax cuts (the sweet spot $88k a year) left of what Mulcair was running on? Or even centrist?

Is a $20-billion stimulus package even left of Harper who introduced a $40-billion stimulus package back in 2009?

Real journalists would be critical of Trudeau's budget. That's their job.

What we have here are establishment journalists hoodwinking the people on a bullshit establishment budget that does virtually nothing to reverse the failed course of Friedmanian free-market reforms of the past 30 years that have destroyed the economy.

In fact, Trudeau's 'Economic Action Plan' is based on free trade and low taxes to "create middle class jobs and grow the economy" — which is exactly the same ideology Harper peddled.

Trudeau's "staggering" $125-billion investment in infrastructure — over 10 years — a $60-billion increase from Harper's, will not tackle the present $125-billion infrastructure deficit we have now (present infrastructure will decay over the next 10 years requiring additional funding.)

White Cat White Cat's picture
mark_alfred

So, it's been four months since this budget, "Growing the Middle Class", with its plan to jumpstart the economy with deficit stimulus spending, has happened.  Have the Liberals started their stimulus spending yet?  If so, I haven't heard.  Anyway, here's a recent news item from CBC that says the economy is struggling:

http://www.cbc.ca/news/business/jobs-canada-july-1.3708611

Quote:
Canada sheds 31,200 jobs in July, unemployment rate rises to 6.9%

Biggest 1-month drop in full-time employment in 5 years

The economy lost 31,200 jobs in July as the number of workers with full-time jobs fell dramatically and fewer younger Canadians were employed, Statistics Canada reported today.

Census effect?

Some analysts said the big drop in public-sector employment was likely due to the end of thousands of jobs for census-takers.

"The jobs data aren't quite as bad as the early read would suggest, since much of the weakness appears to be due to the reversal of census workers," said BMO chief economist Douglas Porter in a morning commentary.

Statistics Canada also released figures Friday that showed the country's merchandise trade deficit with the world grew to a record $3.6 billion in June from $3.5 billion in May.

"The implication is that trade will be a large drag on GDP in [the second quarter].

While not catastrophic, it's hard to see any sort of "jumpstart" here.  If things continue on a slow slide like this, then the Liberals could find themselves in trouble next election.

mark_alfred

http://debatepost.com/2016/08/23/warning-trudeau-has-allowed-banks-to-se...

article wrote:

Warning: Trudeau has allowed banks to seize your money if economy fails:

WARNING: Did you see what Trudeau slipped into the federal budget?

 

Did you see what Justin Trudeau slipped into the budget this week, hidden away on page 223?

It’s called a bank “bail-in regime”.

That means if a Canadian bank starts to fail, it would be allowed to seize your bank account to pay its bills. Seriously.

It’s what they did in Cyprus three years ago, when bankers there made risky loans to Greece. In a back-room deal, politicians and bankers decided to pay off the bank debts by just seizing 10% of everyone’s deposits.

 The country had a melt-down. Banks closed, ATM withdrawals were limited. It was a disaster. Of course, well-connected insiders got all of their cash out in time.

It’s all right there in black and white in Trudeau’s budget.

This outrageous proposal is not yet law. But if Canadians accept it in silence, it will be.

 

page 223 of the budget wrote:

To protect Canadian taxpayers in the unlikely event of a large bank failure, the Government is proposing to implement a bail-in regime that would reinforce that bank shareholders and creditors are responsible for the bank’s risks—not taxpayers. This would allow authorities to convert eligible long-term debt of a failing systemically important bank into common shares to recapitalize the bank and allow it to remain open and operating. Such a measure is in line with international efforts to address the potential risks to the financial system and broader economy of institutions perceived as “too-big-to-fail”.

Mr. Magoo

Quote:
the Government is proposing to implement a bail-in regime that would reinforce that bank shareholders and creditors are responsible for the bank’s risks—not taxpayers.

I have to wonder, though:  who SHOULD be on the hook if a bank fails?  I can't see that it makes more sense to make all taxpayers responsible for the failure of SketchyBank instead of clients of SketchyBank who presumably were OK with their sketchy practices.

I'm not saying I want to lose any of my savings at TD Canada Trust because they invested everything in hoverboards, but why should clients of Scotiabank or CIBC be liable for that?

Michael Moriarity Michael Moriarity's picture

mark_alfred wrote:

page 223 of the budget wrote:

To protect Canadian taxpayers in the unlikely event of a large bank failure, the Government is proposing to implement a bail-in regime that would reinforce that bank shareholders and creditors are responsible for the bank’s risks—not taxpayers. This would allow authorities to convert eligible long-term debt of a failing systemically important bank into common shares to recapitalize the bank and allow it to remain open and operating. Such a measure is in line with international efforts to address the potential risks to the financial system and broader economy of institutions perceived as “too-big-to-fail”.

The key phrase here is "eligible long-term debt". Normal deposits might or might not be included. Perhaps it would only apply to G.I.C.s, or perhaps only bonds issued by the bank. The devil here truly is in the details, and I assume even the MSM will pay attention when some legislation attempts to define the phrase.

Pondering

http://www.cdic.ca/en/about-di/what-we-cover/Pages/default.aspx

What's Covered?

We insure eligible deposits at each member institution up to a maximum of $100,000 (principal and interest combined) per depositor per insured category.

To be eligible for deposit insurance, deposits must be payable in Canada and in Canadian currency. We do not cover foreign currency deposits including US dollars.

Eligible deposits include:

  • Savings accounts
  • Chequing accounts
  • Term deposits, (such as GICs) with original terms to maturity of five years or less
  • Debentures issued to evidence deposits by CDIC member institutions (other than banks)
  • Money orders and bank drafts issued by CDIC members
  • Cheques certified by CDIC members

 

What's Not Covered

Uninsured financial products include:

jjuares

Pondering wrote:

http://www.cdic.ca/en/about-di/what-we-cover/Pages/default.aspx

What's Covered?

We insure eligible deposits at each member institution up to a maximum of $100,000 (principal and interest combined) per depositor per insured category.

To be eligible for deposit insurance, deposits must be payable in Canada and in Canadian currency. We do not cover foreign currency deposits including US dollars.

Eligible deposits include:

  • Savings accounts
  • Chequing accounts
  • Term deposits, (such as GICs) with original terms to maturity of five years or less
  • Debentures issued to evidence deposits by CDIC member institutions (other than banks)
  • Money orders and bank drafts issued by CDIC members
  • Cheques certified by CDIC members

 

What's Not Covered

Uninsured financial products include:


CDIC may or may not have any relevance here. We will have to wait for what the government defines as eligible debt. Indeed some of the items not covered would not seem to fit the definition of " long term".

mark_alfred

I'm pretty sure this bail-in thing isn't an issue.  I just stumbled upon the site and found it curious enough to post, but if it actually was anything to be concerned about, I'm sure we'd have heard something a lot earlier on a prominent site other than the backwoods site that I found the article in.

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