THE CLAIRE FOSS JOURNAL

"Fund Infrastructure Investments Via Bank of Canada"

"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 naturally follow. 
 
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 unforeseen events? 
 
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 projects? 
 
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. 
 
Sincerely, 
 
Marc Bombois 
Vice-president, Canadian Action Party 
1608 Whalebone Dr. 
Gabriola BC V0R 1X5