The Right Hon. Justin Trudeau
Prime Minister of Canada
House of Commons
Ottawa, ON K1A 0A6
Dear Prime Minister:
Re: Government should use Bank of Canada for financing debt
The National Farmers Union (NFU) agrees with Canada’s new government that smart public investment during an economic recession can help the economy recover, even if it requires deficit financing. Providing public subsidies towards retro-fitting housing, transit and manufacturing methods across the country in order to achieve a drastic reduction in greenhouse gas emissions, for example, would be among the right things to do.
Since the mid-1970s we have observed growing income disparity in Canadian society. In The Price of Inequality, Joseph Stiglitz, Professor of Economics at Columbia University and a Nobel laureate, explains how economic stagnation is caused by income inequality and can be turned around by addressing it. Canada is fortunate to have the Bank of Canada Act. However, since 1974, Canadian governments have used private banks for government financing instead. Now is the right time to resume using the Bank of Canada for financing government debt, as that will save (or return to the public purse) the billions of dollars in interest payments currently being paid to private banks. The revenues thus obtained can be used to further drive society in a positive direction, providing benefits for all present and future Canadians.
The National Farmers Union hereby urges the Government of Canada to cease opposition to the lawsuit by the Committee on Monetary and Economic Reform (COMER) regarding the government’s failure to carry out the mandate of the Bank of Canada Act.
The NFU urges the Government of Canada to immediately begin using the Bank of Canada, as mandated, to essentially provide interest-free loans to all levels of government in Canada with funds for infrastructure, social programs and debt retirement.
(original signed by)
cc: Hon. Bill Morneau, Minister of Finance,
cc: All Members of Parliament