THE CLAIRE FOSS JOURNAL
"Fund Infrastructure Investments Via Bank of Canada"
By: Marc Bombois
VP... Canadian Action Party
"Fund Infrastructure Investments Via Bank of Canada": Marc Bombois, Vice
President of CAP, Speaks to a BC Budget 2006 Committee.
Thank you for this opportunity to present my views to the Committee.
In the 2006 Budget Consultation Paper we find this statement:
"Infrastructure investments are funded through new borrowing."
I'd like to point out that the government's practice of issuing bonds to the
international capital markets is exactly why we suffer from a debt obligation
that is now used as the excuse for not properly funding the programs and
services that we all say we want. Society knows the litany well: "balance the
budget", "fiscal responsibility", "we don't have the resources", and many more.
So it is useless to finance "new borrowing" in a way that will only perpetuate
the present situation.
The Bank of Canada Act says the Bank of Canada was created to "to regulate
credit and currency in the best interests of the economic life of the nation".
The Act empowers the Bank to "(c) buy and sell securities issued or guaranteed
by Canada or any province" (Ch. B-2, S.18).
The provincial government must stop issuing bonds to private lenders. Together
with all of Canada's provincial governments, it should insist that all new
government bonds be purchased by the Bank of Canada. The BoC is wholly owned by
the federal government so any interest payments could be returned to the
province as a dividend minus an appropriate administration fee. This will end
the hemorrhage of public money into private pockets, many of whom are private
banks who merely print the money with which to purchase the bonds.
I'd also like to respond to the four questions in the consultation document.
1 Which priority areas should the Government target for allocating anticipated
fiscal plan surpluses?
Shall we take another poll? It is absolutely clear and unequivocal that
Canadians and British Columbians want excellent health care, full stop. We also
want excellent education for our children, we want social services that provide
food, shelter and dignity for all members of society, we want a clean
environment and we want excellent infrastructure. Debt reduction is not above
these and the government can provide all of these with intelligent, democratic
finance via our Bank of Canada. Debt reduction and balanced budgets will
2 What are your opinions on the Government's current practice of providing both
a contingency fund and forecast allowance to protect balanced budgets from
I don't like it. Why is the government withholding funds from the areas we all
agree are our priorities? I have never seen a poll that says we want a
contingency fund. If the government is serious about "protecting" its balanced
budget it can best do that by not borrowing from private lenders.
3 How to pay for provincially-important physical and social infrastructure
Please see above.
4 Your comments on other topics relating to the Province's fiscal priorities not
specifically identified in the Budget Consultation Paper.
Another concern I have is that the government is entering into public-private
partnerships to build infrastructure. Under its so-called "alternative capital
procurement guidelines" it appears the government is financing these projects by
issuing bonds to anonymous investors who are providing anonymous money. Given
that it is estimated that organized crime needs to launder about $600-700
billion per year, the government should be wary of accepting funds without
knowing their source. The government can avoid the possibility of being
complicit in criminal activity by financing public projects only with public
money from the Bank of Canada.
In conclusion, "debt" is no excuse. Money is simply a number, banking is just a
little bookkeeping. Anything that society wants can and should be financially
possible. For example, just today I read in a leading newspaper about the
"cancer crisis" facing our aging society and the fear that we won't be able to
"afford" medical treatment for all these anticipated cancer patients. Are we
going to point at numbers on a computer screen and say to the afflicted, "Not
enough there. Sorry!" and let them suffer and die? Let them suffer and die when
we have the people, intelligence, energy, desire, compassion, and knowledge to
ease their pain, yet some officious financial document says we cannot? Of
course, shamefully, this already occurs daily and it must end.
I hope that this Committee and the provincial government will fulfill its
mandate to serve the people. Insist that the Bank of Canada purchase the
province's bonds. Do not go to the private banks who merely print money and lend
it at usury. Do not be fooled when the fear of "inflation" is invoked. Stop
using "debt" as an excuse for inaction.
Vice-president, Canadian Action Party
1608 Whalebone Dr.
Gabriola BC V0R 1X5