January 15, 2005
Mayor David Miller and Council
City of Toronto
Re: Funding public transit and other public capital expenditures
Dear Mayor Miller:
Your recent appearance on CTV stating that it will be years before the Toronto subway system will be extended because of the lack of funds leads me to ask if anything has been done since my letter to you of December 22, 2003, in which I spoke of using the Bank of Canada to finance public capital expenditures.
I am aware of the arguments against this put forward by your Chief Financial Officer, Ms. Wanda Liczyk, and I am also aware that these arguments were thoroughly discounted by William Krehm, President of the Committee on Monetary and Economic Reform. I won't take space here to repeat Mr. Krehm's statements, but if you do not have his information on file I will be glad to send it to you.
Suffice it to say that the Bank of Canada could finance public capital expenditures if the government saw fit to instruct it to do so. It is a purely political decision. The Bank of Canada Act provides all the authority needed. A separate Act, the Bank Act, which was amended under Prime Minister Brian Maloney to eliminate the statutory reserves, would have to be amended again to reinstate the reserves in order to control the amount of money created and avoid inflation.
While funds for essential services are slashed and the infrastructure deficit climbs, the federal government continues to spend billions (currently about $35-billions) annually on unnecessary interest. On top of that provincial governments also spend billions on unnecessary interest (about $10-billions in Ontario), and the City of Toronto cannot carry out necessary capital projects.
As mentioned in my previous letter, for 35 years from 1939 to 1974 much of the government's capital expenditures were financed by the Bank of Canada. The advantages of using our publicly owned bank can be enourmous. Not only could debt be carried for the cost of administration (which for the Federal Government has been as low as 0.37%), but it could also be carried for the expected life of the asset so that the debt is always offset by the depreciating value of the asset.
For example, if a given capital acquisition has a life span of 50 years and costs $100-million, payments would be $2-million a year plus the cost of administering the loan - less than ½ of 1%. Contrast this with borrowing $100-million at, say, 6% for 20 years. Payments would amount to $8.5-million a year and the total cost would amount to $170-million.
The City of Toronto adopted a resolution pertaining to the Bank of Canada at its regular meeting held on April 23 to 27 and its special meeting held on April 30 to May 2, 2001.
It requested that "the Federal Minister of Finance, in conjunction with the Province of Ontario, provide low cost, below prime, long-term loans to municipalities, such as through the Bank of Canada". The resolution was sent to the then Minister of Finance, the Hon. Paul Martin as well as to the Federation of Canadian Municipalities and the Association of Municipalities of Ontario.
The City of Windsor is the latest municipality to adopt a resolution in support of using the Bank of Canada to provide financing for public capital expenditures, bringing the total number of municipalities to do so to 17. Will the City of Toronto provide leadership and press the government to act on this issue?
Richard Priestman
Committee on Monetary and Economic Reform
Kingston
CC: William Krehm
Committee on Monetary and Economic Reform
Toronto
Herb Wiseman
Committee on Monetary and Economic Reform
Peterborough
Stumble It!
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Here is something I've dug up:<br />
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<a href="http://www.ithacahours.com/otherhours.html">http://www.ithacahours.com/otherhours.html</a><br />
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Canadian ALTERNATE currencies (from above link):<br />
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<a href="http://www.bcbc.ab.ca/">http://www.bcbc.ab.ca/</a> <br />
"Bow Chinook HOURs are issued in 4 denominations; 1/10, 1/2, and 1 HOUR. One HOUR is the equivalent of $10 Canadian dollars."<br />
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<a href="http://flagspot.net/flags/ca-bc-ss.html">http://flagspot.net/flags/ca-bc-ss.html</a><br />
"Salt Spring dollar: $$ will be issued by a non-profit foundation, the Salt Spring Island Monetary Foundation, better known as the Salt Spring IMF. The $$ will be issued on par with the Canadian Dollar, one $$ for one Canadian $. The currency will be issued in limited editions of 20,000, the first in denominations of 1, 2 and 5$$. Each limited edition will have an expiry date of two years, during which time they can be redeemed for the equivalent amount in Canadian dollars, or exchanged for a new edition of $$." <br />
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<a href="http://www.torontodollar.com/">http://www.torontodollar.com/</a><br />
"The Toronto Dollar trades at par with the Canadian dollar and is backed by Canadian dollars. Here¹s how it works. Initially, consumers can exchange their Canadian dollars for an equal amount of Toronto Dollars (1 Canadian dollar buys 1 Toronto Dollar). Each time a Toronto Dollar is purchased from Toronto Dollar Inc., 90 cents is deposited in a reserve fund and 10 cents goes to the Toronto Dollar Community Projects Fund. Participating businesses have agreed to accept Toronto Dollars on-par with Canadian dollars. A business can continue to spend at par the Toronto Dollars it receives or it can redeem its Toronto Dollars for Canadian dollars at 90 cents on the dollar"<br />
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I would suggest that more people develop and use alternate currencies such as the examples listed above. While it may not serve to make major purchases, the use of these currencies for everyday business, or for bartering goods and services, would go some distance in loosening the grasp of the "banking/government cartel".<br />
<p>---<br>RickW
Marx argued that money capital worked against working "capital". I would not say that capitalism is at fault, but the money system is. Marx saw money as another form of capital, but I do not think it is. Money is created out of nothing, whereas you have to actually accumulate capital.
I think your chances of getting Miller to mention this are zilch UNLESS he has the balls to say something in public. Even then, he's dependent on Martin actually doing something--which he won't. Miller will be gone before this happens. People will only put up with so much, but they don't know this stuff.
John Riddell, is that you?
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The best argument against democracy is a five minute conversation with the average voter --
Winston Churchill
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RickW
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Truly it was the medicine we needed to get out of the Great Depression, to fund the War effort and to grow our economy then, so why not now? The question leads us back to corporate dominance and enslaving the populous. If the banks control the money and we continue to grow interest debt to them, we will never be able to afford our social programs, there will never be enough of a tax base and therefore the 'other' solutions will always seem like the answer. <br />
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The 'other' solutions being privatize, or abolish social programs, survival of the fittest, the rich get richer and the rest? Who cares? Well I care and I think most people do, but we have become so entrenched with rhetoric about what can't be done that something so simple as using our own Bank of Canada to create our money, where we are the shareholders and therefore the beneficiaries of interest payments; seems too complex. <br />
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From what I have read, it will not cause inflation,(as many suggest) because we need to fund our social programs, such as healthcare, if we created money that wasn't needed it could, but why borrow from private banks and pay them interest, when we could borrow from, in essense ourselves, and pay ourselves? Answer: because then the corporate banks wouldn't be able to make so much money and control the system. <br />
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The question I can't answer is why our politicians have shackled us into this system, when we have a choice? Anybody?<br />
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You owe it to yourself to read into this, get the videos and spread the word, it is not complicated, it is not negative, it is just that so far we or our representatives, lack the will to do it. It really is the solution to our economic problems, funding our social programs and becoming truly independant as a nation. Check out the website, this gentleman has done the research: <br />
<a href="http://www.thedreamofcanada.ca">www.thedreamofcanada.ca</a><p>---<br>If I stand for my country today...will my country be here to stand for me tomorrow?
Of come off it! The Bank of England was formed in 1698 by wealthy merchants and nobility. Central banking is a ploy by the ruling classes, a means to rob us better. Marx merely picked up on central banking as a means of economic development since at that time (1848) he, having been influenced by the Jacobins, favored a centralized state and economy. He and Engels changed their minds about this later after the Paris Commune.
Once we recognize this, the pieces fall together rather easily.
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The best argument against democracy is a five minute conversation with the average voter --
Winston Churchill
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Dave Ruston