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Hurricane Donald, Or Not, Canada Should Have Fixed These Problems Long Ago

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By Jeremy Nuttall

Jeremy Nuttall, former Toronto Star investigative reporter, argues “In recent years the U.S. has been solving problems the Canadian government wasn’t interested in.”

The nerves have been frazzled north of the border here in typical Canadian style, in the wake of the election of Donald Trump as president of ‘those’ United States. As Robin Williams famously said, Canada is like a really nice apartment over a meth lab.

And now, a significant swath of Canadians are reeling from the election of a man who has so many failings, both with his character and ethics, running the most powerful nation on Earth, with whom we share a border. It has understandably sparked a doomsday scenario in the minds of many Canadians.

But if you’re looking for a way to work out this nervous energy, here’s an idea: help put Canada’s house in order. This apartment isn’t as nice as the late Mr. Williams would have us believe.

Trump’s first term as a U.S. president saw many guardrails and civil servants prevent him from enacting his full agenda. The U.S. institutions did a decent job of mitigating damage. Oh, how nice it would be to see such gumption in the halls of power in Canada. But we don’t, and that makes this country even more susceptible than the Americans are to the whims of any nefarious would-be ruler.

In recent years, the U.S. has been solving problems the Canadian government either wasn’t interested in, didn’t know about, or, most likely, didn’t care about.

The money laundering charges against TD, taking a stand on issues related to Beijing, including foreign interference, and acting to stop slave-labor-made goods from entering the country while Ottawa did nothing are just a few examples. Say what you want about the U.S.; they forced Canada’s hand on these issues or drew attention to our country’s inaction.

But that’s likely over for now, and if you’re really worried about the perils of a Trump-style candidate ever coming to Canada, you should be aware this country has already had the kind of scandals Trump’s next presidency is predicted to bring.

What do I mean?

Foreign interference, money laundering, cronyism, and the breaking of our transparency laws are commonplace. We have an opacity problem combined with institutions less resistant to scumbaggery, and anyone with enough power and little conscience could really manipulate them if they so wished.

Examples? Sure. We can start with the government refusing to hand over all the documents as ordered by Parliament related to Sustainable Development Technology Canada. The Liberals’ refusal to give up such documents has had Ottawa in gridlock for months. Doesn’t that sound like something a Trump-style candidate would do?

We found out last month that, after Liberal Party supporters chastised “illegal CSIS leakers” for giving evidence the PMO chose to ignore to the media, Trudeau’s national security adviser and deputy minister of foreign affairs leaked information about India’s potential involvement in the assassination of a Sikh leader to one of the biggest U.S. media outlets going, The Washington Post. I haven’t seen any demands for an investigation into that.

We’ve also recently had the Greenbelt scandal in Ontario, the ArriveCAN scandal, and B.C.’s money laundering inquiry revealing how white this country can make your green. The RCMP, meanwhile, more frequently doesn’t release basic information about crimes, including the names of homicide victims (an important, though somber, matter of public record).

Then there’s the increasing liberties being taken with our systems of government by those in charge of it. Wab Kinew’s Manitoba NDP booted a lawyer out of caucus because someone in his firm—not even him—is defending Peter Nygard in his sexual assault trial. Kinew apologized after uproar from legal groups, but the move draws into question how important the right to a defense and its importance to the justice system is for that government.

Over in Alberta, Danielle Smith is making anti-vaxxers feel special by crafting legislation specifically protecting them from workplace vaccination mandates, in what is obviously a politically driven waste of public resources.

Last week, we learned the CRA apparently orchestrated a “witch hunt” to find out who dropped the dime on their false reimbursement scandal. And while we’re on the CRA, you may recall more than 230 CRA civil servants were fired earlier this year for falsely claiming CERB.

It goes on, and, as bad as all that is, what’s worse is how our political parties have, without any real opposition, politicized our civil service.

ATIPs and FOIs aren’t returned within legislated timelines as staffers thumb their noses at the media and public. There’s a sense of entitlement to use public funds and information for political advantage, and it’s just ignored by the public. Our government ministerial positions are more frequently filled with career ladder-climbers rather than seasoned professionals with a proven track record before entering politics.

Going back further, Jody Wilson-Raybould was tarnished for not toeing the line in the SNC Lavalin Scandal. Our former ambassador to China effectively took China’s side in the Meng Wanzhou detention over our biggest ally, saying it’d be “great for Canada” if the U.S. dropped its extradition case against her.

The same man, John McCallum, would later tell Chinese officials that their continued targeting of Canadian trade could lead to a Conservative government. Sure, it raised eyebrows, but nothing came of it.

This is your country, Canadians, and it’s open season. It doesn’t matter what party is in charge; these issues of accountability and politicization exist in all of them.

Don’t look for the media to save us. Many editors don’t see what the big deal is with all this. “It’s always been like this” is something I’ve heard way more times than I’d care to list from journalists in recent years.

Aside from a few bright lights or publications, Canadian media is either unwilling or incapable of really digging into some of the more serious issues like foreign interference, government corruption, and the lack of transparency.

The goodwill of the Canadian public and warm fuzzy feelings about this country help keep the status quo. If we ever have a serious threat from a Trump-like politician, this place is easy pickings.

We’d be wise to, instead of collectively shaking our heads and ranting about the decision made by the U.S. public, start making sure it can’t happen up here and make the current threats to our democracy your issues.

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To increase competition in Canadian banking, mandate and mindset of bank regulators must change

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From the Fraser Institute

By Lawrence L. Schembri and Andrew Spence

Canada’s weak productivity performance is directly related to the lack of competition across many concentrated industries. The high cost of financial services is a key contributor to our lagging living standards because services, such as payments, are essential input to the rest of our economy.

It’s well known that Canada’s banks are expensive and the services that they provide are outdated, especially compared to the banking systems of the United Kingdom and Australia that have better balanced the objectives of stability, competition and efficiency.

Canada’s banks are increasingly being called out by senior federal officials for not embracing new technology that would lower costs and improve productivity and living standards. Peter Rutledge, the Superintendent of Financial Institutions and senior officials at the Bank of Canada, notably Senior Deputy Governor Carolyn Rogers and Deputy Governor Nicolas Vincent, have called for measures to increase competition in the banking system to promote innovation, efficiency and lower prices for financial services.

The recent federal budget proposed several new measures to increase competition in the Canadian banking sector, which are long overdue. As a marker of how uncompetitive the market for financial services has become, the budget proposed direct interventions to reduce and even eliminate some bank service fees. In addition, the budget outlined a requirement to improve price and fee transparency for many transactions so consumers can make informed choices.

In an effort to reduce barriers to new entrants and to growth by smaller banks, the budget also proposed to ease the requirement that small banks include more public ownership in their capital structure.

At long last, the federal government signalled a commitment to (finally) introduce open banking by enacting the long-delayed Consumer Driven Banking Act. Open banking gives consumers full control over who they want to provide them with their financial services needs efficiently and safely. Consumers can then move beyond banks, utilizing technology to access cheaper and more efficient alternative financial service providers.

Open banking has been up and running in many countries around the world to great success. Canada lags far behind the U.K., Australia and Brazil where the presence of open banking has introduced lower prices, better service quality and faster transactions. It has also brought financing to small and medium-sized business who are often shut out of bank lending.

Realizing open banking and its gains requires a new payment mechanism called real time rail. This payment system delivers low-cost and immediate access to nonbank as well as bank financial service providers. Real time rail has been in the works in Canada for over a decade, but progress has been glacial and lags far behind the world’s leaders.

Despite the budget’s welcome backing for open banking, Canada should address the legislative mandates of its most important regulators, requiring them to weigh equally the twin objectives of financial system stability as well as competition and efficiency.

To better balance these objectives, Canada needs to reform its institutional framework to enhance the resilience of the overall banking system so it can absorb an individual bank failure at acceptable cost. This would encourage bank regulators to move away from a rigid “fear of failure” cultural mindset that suppresses competition and efficiency and has held back innovation and progress.

Canada should also reduce the compliance burden imposed on banks by the many and varied regulators to reduce barriers to entry and expansion by domestic and foreign banks. These agencies, including the Office of the Superintendent of Financial Institutions, Financial Consumer Agency of Canada, Financial Transactions and Reports Analysis Centre of Canada, the Canada Deposit Insurance Corporation plus several others, act in largely uncoordinated manner and their duplicative effort greatly increases compliance and reporting costs. While Canada’s large banks are able, because of their market power, to pass those costs through to their customers via higher prices and fees, they also benefit because the heavy compliance burden represents a significant barrier to entry that shelters them from competition.

More fundamental reforms are needed, beyond the measures included in the federal budget, to strengthen the institutional framework and change the regulatory mindset. Such reforms would meaningfully increase competition, efficiency and innovation in the Canadian banking system, simultaneously improving the quality and lowering the cost of financial services, and thus raising productivity and the living standards of Canadians.

Lawrence L. Schembri

Senior Fellow, Fraser Institute

Andrew Spence

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