Bank of Canada Lawsuit

By: 

Joyce Nelson

One of the most important legal cases in Canadian history is slowly inching its way towards trial.  Launched in 2011 by the Toronto-based Committee on Monetary and Economic Reform (COMER), the lawsuit would require the publicly-owned Bank of Canada to return to its pre-1974 mandate and practice of lending interest-free money to federal, provincial, and municipal governments for infrastructure and healthcare spending.

Renowned constitutional lawyer Rocco Galati has taken on the case for COMER, and he considers it his most important case to date.  

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.” (COMER says the figures are closer to $60 billion per year, and $2 trillion since 1974.)
 

The Fraudsters
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.

According to The Tyee (April 17, 2015), in 1974 the BIS’s new Basel Committee – supposedly in order to establish global financial “stability” – encouraged governments “to borrow from private lenders and end the practice of borrowing interest-free from their own central banks. The rationale was thin from the start. Central bank borrowing was and is no more inflationary than borrowing through the private banks. The only difference was that private banks were given the legal right to fleece Canadians.”

And that’s exactly what “the fraudsters” did. After 1974, the Bank of Canada stopped lending to federal and provincial governments and forced them to borrow from private and foreign lenders at compound interest rates – resulting in huge deficits and debts ever since. Just paying off the accumulated compound interest – called “servicing the debt” – is a significant part of every provincial and federal budget. In Ontario, for example, debt-servicing charges amounted to some $11.4 billion for 2015.  

What is key to the COMER lawsuit is that the Bank of Canada is still a public central bank (the only one left among G7 countries). Their lawsuit seeks to “restore the use of the Bank of Canada to its original purpose, by exercising its public statutory duty and responsibility. That purpose includes making interest free loans to the municipal, provincial, and federal governments for ‘human capital’ expenditures (education, health, other social services) and/or infrastructure expenditures.”
 

Deliberate Obfuscation
In February 2015, Rocco Galati stated publicly: “I have a firm basis to believe that the [federal] government has requested or ordered the mainstream media not to cover this [COMER] case.” Subsequently, the Toronto Star and the CBC both gave the lawsuit some coverage last spring and there was good coverage in alternative media. 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.  

In a cynical move, the Liberal Backgrounder doesn’t mention the interest-free loans of the past, but it does cite their results in order to tout the Liberal Party’s “transformative investment plan” for Canada: “A large part of Canada’s 20th century prosperity was made possible by nation-building projects – projects that without leadership from the government of Canada would not have been possible … the St. Lawrence Seaway served as a foundation for prosperity in Quebec and Ontario; the TransCanada Highway links Canadians from coast to coast; and our electricity projects, pipelines, airports and canals have made it possible to develop our natural resources, power our cities, and connect with each other and the world.”
 

Pools of Capital
Enthused about Justin Trudeau’s victory and his infrastructure campaign platform, Paul Krugman wrote in the New York Times (October 23, 2015), “We’re living in a world awash with savings that the private sector doesn’t want to invest and is eager to lend to governments at very low interest rates.  It’s obviously a good idea to borrow at those low, low rates … . Let’s hope then, that Mr. Trudeau stays with the program. He has an opportunity to show the world what truly responsible fiscal policy looks like.”

Of course, borrowing from the Bank of Canada at NO interest rates would be even more fiscally responsible, and would keep policy decisions out of the hands of foreign lenders.

***

Joyce Nelson is an award-winning freelance writer/researcher and the author of five books.

- See more at: http://www.watershedsentinel.ca/content/bank-canada-lawsuit#sthash.Czq0ihKy.T9hKFvjh.dpuf

Canada Claims It Will Back Out of TPP to Protect Its Sovereignty

Written by  Joe Wolverton, II, J.D.

The Obama administration isn’t happy with Canada’s reluctance to sacrifice its poultry market on the altar of membership in the Trans-Pacific Partnership (TPP).

On July 16, the Globe and Mail reported:

American officials including chief U.S. negotiator Michael Froman have repeatedly publicly prodded Canada to produce a “meaningful offer” and disclose to the U.S. what kind of agriculture concessions it will make. Trade ministers from 12 countries are preparing to gather in Hawaii shortly for what some describe as a final push for a TPP deal.

Canada’s Trade Minister Ed Fast dismisses these challenges from Washington, telling The Globe and Mail last week that “the Americans prefer to negotiate this agreement through the media” and he won’t.

Sources say as far as the U.S. is concerned, Canada promised that “things that weren’t addressed in the North American free-trade agreement — poultry and dairy — were going to be addressed” in the Pacific Rim talks.

“That was very clear; that was agreed upon,” a source familiar with the trade talks said.

The participation of the United States in the sovereignty surrender wrapped in a trade blanket is all but guaranteed after Congress gave the president “fast track” trade promotion authority.

All the confusion over the scope of the pact’s mandates could be cleared up very easily: Just produce the text of the TPP agreement and we’ll be able to sort out who’s right and who’s wrong.

The fact is that no one in Canada or the United States knows what their respective governments are giving away inside the secret TPP confabs.

We do know that our own elected officials have tried in vain to pierce the veil of secrecy preventing Americans from learning about the frightening compromises being made by our trade representatives at the TPP negotiations.

Zach Carter of the Huffington Post reported that Senator Ron Wyden (D-Ore.), the chairman of the Senate Finance Committee’s Subcommittee on International Trade, Customs and Global Competitiveness, was stonewalled by the Office of the U.S. Trade Representative (USTR) when he attempted to see any of the draft documents related to the governance of the TPP.

In response to this rebuff, Wyden proposed a measure in the Senate that would force transparency on the process, and that was enough to convince the USTR to grant the senator a peek at the documents, though his staff was not permitted to peruse them.

Wyden spokeswoman Jennifer Hoelzer told the Huffington Post that such accommodations were “better than nothing” but not ideal in light of the well-known fact that on Capitol Hill the real work of drafting and evaluating legislation is performed by the representatives’ staff members who are often experts in particular areas of domestic and foreign policy.

“I would point out how insulting it is for them to argue that members of Congress are to personally go over to USTR to view the trade documents,” Hoelzer said. “An advisor at Halliburton or the MPAA is given a password that allows him or her to go on the USTR website and view the TPP agreement anytime he or she wants.”

It is instructive that a duly elected senator of the United States has to beg and plead and threaten legislation in order to see the TPP trade agreement negotiations, but corporate interests are given a password by the USTR that grants them a priori access to those same documents.

In fairness, a little light has been shed on draft TPP documents, albeit not by the parties to the pact, but by the whistleblowers at WikiLeaks.

In November 2013, portions of the TPP draft agreement published by WikiLeaks contained sketches of President Obama’s plans to surrender American sovereignty to international tribunals. 

Another WikiLeaks disclosure in January 2014 revealed that the president was attempting to surrender sovereignty over U.S. environmental policy to international bureaucrats interested in lowering those standards to mirror those of our TPP partner nations.

U.S. copyright laws, Internet freedom, and web-based publishing would also be obliterated by the TPP, and, although it hasn’t been widely reported, the TPP would give the global government sweeping surveillance powers, as well.

Although the American people (and the people of all nations involved in the pact) are prevented from seeing or commenting on the treaty being ostensibly negotiated on their behalf, multinational corporations have seats at the trading table.

While the TPP grants corporate giants such as Walmart and Monsanto the power to bypass Congress and the courts, the elected representatives of the American people are kept from even seeing the draft version of the agreement.

As with the multitude of similar trade pacts the United States has formed, the ultimate aim of the TPP is the creation of a regional super government — thus the stonewalling of federal lawmakers who dare seek to assert some sort of oversight. 

The New American has previously commented on the real reason for the darkness around the deliberation and the document:

If there is one word that is used more often than “reform” by governments, politicians, and international organizations — and abused even more frequently and egregiously — it is “transparency.” As with the United Nations and the World Trade Organization (WTO), the White House and the U.S. Trade Representative’s (USTR) office regularly proclaim their commitment to transparency while doing everything possible to hide their actions from their constituents. The USTR’s “Fact Sheet: Transparency and the Trans-Pacific Partnership” is intended to give the impression that the Obama administration is forthrightly providing the American people with all the up-to-date information they need to accurately evaluate the agreements that are being made in their name, and that would, if accepted by Congress, devastatingly impact their lives, their liberty, and their future.

Ever since Canada formally announced its entry into the TPP, the focus has been on how much our neighbors to the north could hold back from the bargaining table.

As initially reported in 2012, Canadian officials knew that their decision to join the TPP would require them to abandon the controls they had in place on their domestic dairy and livestock markets.

Canadian Prime Minister Stephen Harper insists that neither Canada’s sovereignty nor its support of domestic industry would be offered in order to secure its admission to the TPP.

"Canada aims, whenever it gets into a trade negotiations, to promote and to protect all of its interests across all the range of industries ... and Canada's record in terms of dealing with those particular issues in trade negotiations under our government has been very strong and that will continue to be our position,” Harper said.

That’s not quite the strong line being taken by other Canadian officials, however.

“Canada did not agree to any specific measures in terms of an eventual Trans-Pacific Partnership agreement prior to joining talks,” Rick Roth, spokesman for Minister of International Trade Ed Fast, said Wednesday.

Again, whether they did or didn’t is anybody’s guess.

Tariffs of about 300 percent protect the Canadian poultry industry from competition from the United States or any other foreign competitor. American poultry farmers don’t think that’s fair and are slavering over the prospect of pushing poultry over the northern border.

As of 2013, the United States exported about $623 million worth of poultry to Canada, while that same year the United States imported about $287 million in Canadian chicken. 

A greater than 2-1 trade surplus is not quite the terrible trade deficit American negotiators are claiming is hurting American farmers.

The United States will host a meeting of the 12 TPP member trade ministers in Maui, Hawaii, from July 28-31, preceded by a meeting of TPP chief negotiators from July 24-27.

Twelve trade representatives enter the Hawaii negotiations; perhaps only 11 will leave with their membership intact.

Source: http://www.thenewamerican.com/usnews/foreign-policy/item/21270-canada-claims-it-will-back-out-of-tpp-to-protect-its-sovereignty