This message is sent for educational purposes. It is a concern of the citizens of Canada. The fact that our governments have a way of creating a better Canada for its people and they do not is cause for concern. (What do we pay our governments for). Citizens like myself and others cannot understand why there is no direction or action on the part of representatives of our nation. We are left to ask questions like why do you not move on this and do the right thing for Canada? Is it because you at some level are facilitating the destruction of the Nation, and if so what is it that you received for this? Or a horrible thought
is if your lack of Canadian history and negligence of duty to the people will inadvertently destroy Canada while you are unaware of your part or lack of.

You can rest assured that this email has been sent far and wide and as Canadians monitor the situation and see your lack of action and the movement of the Canadian Governments to hinder progress and repair of the nation they will wonder who you represent.

Signed by:
A Concerned Citizen of Canada
Connie Fogal

Globalization and the Bank of Canada ..........
by Connie Fogal

The reason our governments do not maximize the power of our own Bank of Canada is because to do so would be contrary to the command of the globalization process, the privatization of the world, led by the IMF and the World Bank. Canada now uses the Bank of Canada for only about 1% to 5% of its financing of the nation's needs. The rest is borrowed from private
banks and hence the escalating exponential interest growth on the national debt.

Many countries have had a central bank like the Bank of Canada that was owned by the people which was used to put money into the system for infrastructure etc at no or very low cost to the money. Any cost that did arise goes/went back to the countries' coffers. Private banks like TD, CIBC, Royal etc charge high interest and keep it for their own profits.

The mandate of globalization requires that all the national banks be privatized in order that there remains no competition for the private banks, except among each other to practice their usury. One of the terms of conquest of the illegal war against Yugoslavia (which Canada participated in, supported by every party including to their indelible shame, the NDP) was the demand by the IMF and NATO (read U.S.) that Yugoslavia give up its
central national bank which it was forced to do.

A constant term imposed by the IMF on every nation in trouble with their money is to get rid of their national bank. It is a central part of what Michel Chossodovsky calls the Globalization of Poverty.

Mulroney in 1991 along with the then Governor of the Bank of Canada , John Crow, tried to emasculate our Bank of Canada but failed thanks to an all party committee. Mulroney was the chief architect of imposing the New World Order on Canada facilitating the slow but deliberate destruction of sovereignty and power of Canadians. He served his masters well. He began
the erosion of our social safety net which continues, all as part of the globalization agenda.

We desperately need a force of politicians somewhere who will take up the power of the Bank of Canada while we still have it and before it is destroyed, as it surely will be because that is the demand of the IMF and the World Bank and all their globalizers. We have no federal nor provincial politicians with the guts or understanding to take this on- (1) to educate
Canadians on the power we actually have to support all our social programs and certainly our infrastructure. Since infrastructure is so crucial to municipalities, it is logical Councillors could be the leading edge in this challenge; (2) to lead other municipalities in a charge on the federal government to return to the use of the Bank of Canada to fund transit as a start .

This will not be easy, as to attempt this is to unleash all the force of the international financial elite down on your heads. Many citizens are desperately waiting for the emergence of leadership to take this issue on. COPE could be a catalyst in the process.

Michel Chossudovsky, economist, University of Ottawa, refers to the "privatization of urban space" in the process of municipal integration. Municipal integration is part of the globalization agenda- i.e. privatization of everything. That process is accelerating in Ontario and Quebec quite noticeably. In BC it is happening , but more furtively. What has been happening to our transit is part of that privatization process, that "privatization of urban space".

William Krehm, in "The Bank of Canada , a Misused Tool", appendix, to It's Your Money, by William Hixson, page 121 writes:

" The central banks of Europe came into existence to finance wars or to help assimilate the booty of wars: the bank of England in 1694; the Bank of France in 1800; the German Reichsbank after the 1871 victory over France. Like the U.S fed they were owned and controlled by private banks- the Bank of England was finally nationalized by the Labor Government only after
World War II.

But the Bank of Canada (section 17 of the Act)has a single shareholder, the government of Canada. It had been set up by an arch - Conservative government in 1935, but in the elections of that year the Liberals under William Lyon Mackenzie King promised to nationalize it. And nationalize it they did. The process was completed in 1938 when the 12,000 shareholders
were bought out at a handsome profit.

As a result the interest on any federal debt held by it finds its way back to the Government- not as "funny money" but as the respectable institution of the dividend. By contrast, when private banks hold such debt, the interest on it remains with them.

Section 14 of the Act adopted in 1961 after the Conservative government of John Diefenbaker had fired the second governor of the Bank, James Coyne, establishes the ultimate responsibility of the Government for the general policy of the Bank. In the event of a disagreement between the Finance Minister and the Governor of the Bank, the Minister need only give the governor 30- day notice in writing of the course toe be followed. If he does not comply he has his walking papers.

.... How a central bank chooses to handle money creation can shape our destinies.

...In 1991 an elaborately orchestrated campaign was conducted by the Mulroney Government and the then Bank of Canada governor John Crow to replace the preamble to the bank of Canada with a single goal- "zero inflation".. the high inflation rates that were to flatten out prices would have consequences in every nook and cranny of the nation's' life- undoing the social programs that have become part of the very identity of Canadian society.... However , the caucuses of the three parties in the Banking Subcommittee of the Commons joined in turning down the initiative. This was never reported in the media, nor did it prevent Governor Crow from advertising the supposed "independence of the Bank of Canada from the government" and the bank's espousal of "zero inflation" on all continents..

( The current attack and escalating destruction of our social programs has everything to do with the creation and control of our money, and the absolute refusal of our current governments to use the power of our own Bank of Canada...Connie's comment)

... Section 18 of the Bank of Canada Act sets out the Bank's powers of lending to our governments. ...(S 18(J) says) the Bank of Canada may make loans to the Government of Canada or the government of any province (municipalities).

Response to Critics of the Bank of Canada             
..... By Brian Bacon

Dear Ms Liczyk:

I received a copy of your response to Bob Olsen regarding his suggestion that you seek financing from the Bank of Canada to fund the construction of transit facilities in Toronto. That such opportunities to develop our communities are dismissed out of hand is testament to a profound lack of understanding of one of our nation's most important institutions - its historical role and the opportunity that it continues to provide for a better future for all Canadians.

The broad scope of the Bank's mandate is evident from the opening paragraph of its Charter.  The Bank's stated mission is to "regulate credit and currency in the best interests of the economic life of the nation, to control and protect the external value of the national monetary unit and to mitigate by its influence fluctuations in the general level of production, trade, prices and employment, so far as may be possible within the scope of monetary action, and generally to promote the economic and financial welfare of Canada."

Your assertion that Bank of Canada loans were only intended to "assist the federal and provincial governments in times of extreme economic difficulties such as was encountered during the 1930's and should not be considered as an appropriate source for the financing of capital expenditures" is simply inaccurate. These measures were firsts used upon nationalization of the Bank in the depth of the depression it is true but such measures continued to play a key role in federal government policy for until the mid-1970's. It was largely through this mechanism that the huge post-war social and physical infrastructure development of this nation was financed. The building of hospitals and universities, the St. Lawrence seaway, the Trans-Canada Highway and on and on while simultaneously reducing the federal debt from 131% of GDP in 1946 to 22% in 1974 would have been impossible without such a policy. The ascendancy of Monetarist economics beginning in the 1970's saw a withdrawal of central banks in Canada and around the world with the concomitant rise in debts both public and private. In Canada this has given rise to the dismantling of the social contract in order to "get our financial house in order" (Paul Martin).

I would also like to address some of the specific technical issues that you mention in your letter.

First, your concern with the short-term nature of such loans is easily resolved. This is mitigated by simply renewing them as they come due. It is in keeping with the spirit and intent of the Bank's charter and consistent with its historical practise. Furthermore, the nature of relationship between the borrower and lender eliminates any interest rate risk upon refinancing such as would exist were the debt financed in the capital markets.

Second, you state correctly that the Bank of Canada Charter is silent on the interest rate that would be charged on such loans.  Naturally, given the Bank's current misinterpretation of its own mandate, its representatives quote a market rate for such financing but that is not the end of the story.  What they failed to mention was that the federal government, being the single shareholder of the Bank, has the prerogative to forgive a portion or all of the interest thus charged.  Keep in mind that any profits accruing to the Bank through such loans are remitted to the federal government by way of dividend.  So the interest is paid by the borrower to the Bank but forgiven by the federal government through refunding of the dividends thus earned. 

Usually the borrower could expect to be subject to a nominal interest charge necessary to fund the ongoing operations of the Bank.  This mechanism is part of the Bank's Charter for the express purpose of providing the federal government an instrument that it could use to strengthen the bonds of federalism by offering interest-free financing of projects in the public interest in return for cooperation on issues of concern to the federal government.  The withdrawal of the Bank from this activity in recent years has been a significant contributor to many of our most pressing national problems from huge public debts as all levels of government are forced to borrow in the capital markets, to the crisis of national unity as more and more Canadians see the
federal government as less relevant to their lives.

In August of 2000 the Bank of Canada published a public survey that it had conducted to ascertain Canadians' understanding of the Bank and its role in our society.  The results were disappointing if not surprising.  Writing in the Globe & Mail Madelaine Drohan lamented that "Given the role all these institutions play in our daily lives, such low public awareness is unhealthy. And in a democracy, where these institutions are supposed to be run for the interests of the people, it is unacceptable" (Toronto Globe & Mail September 16, 2000). 

The undermining of the mandate of the Bank of Canada has been a key component of the neoliberal agenda in Canada by
eliminating the ability of our federal government to channel a portion of the energy and resources of our economy toward projects deemed to be in the public interest.  The public ignorance of which Ms. Drohan wrote is a key reason that this has been possible.   If we are to work towards building a better society for all Canadians we must arm ourselves with an understanding of the democratic institutions that we have at our disposal and demand that our public officials use them for their intended purpose.  I would urge you to look deeper into this issue.  To that end you may want to contact William Krehm the publisher of Economic Reform, the newsletter of COMER - The Committee on Monetary and Economic Reform.  COMER  is a progressive Canadian research group focusing on monetary and social policy issues.  Mr. Krehm is one of Canada's foremost authorities on banking and finance.  His email address is wkrehm@internet.look.ca.

Brian Bacon CA
Vancouver (604) 822-0919
DEFENCE of CANADIAN LIBERTY COMMITTEE/LE COMITÉ de la LIBERTÉ CANADIENNE
C/0 CONSTANCE FOGAL LAW OFFICE, #401 -207 West Hastings St., Vancouver,
B.C. V6B1H7
Tel: (604)687-0588; fax: (604) 872 -1504 or (604) 688-0550;cellular(604)
202 7334;
E-mail: cfogal@netcom.ca  Website: www.canadianliberty.bc.ca

“The constitution of Canada does not belong either to Parliament, or to the Legislatures; it belongs to the country and it is there that the citizens of the country will find the protection of the rights to which they are entitled” Supreme Court of Canada  A.G. of Nova Scotia and A.G. of Canada, S.C.R. 1951 pp 32