Use Bank of Canada to fund infrastructure

Letter in Vancouver Sun with footnotes to editor:

Re: Momentum builds for state-funded Canadian infrastructure bank, Greg Quinn and David Scanlan, October 13, 2016

In order to keep infrastructure usage rates as low as possible, the government should borrow funds from the Bank of Canada at near-zero interest rates, and retain ownership of all assets.

However, having won the election by outmaneuvering the NDP on the left, the Liberals will now reward their big-money supporters by offering high interest returns on investments and the ability to extract monopoly rents through on-going operations. Even the government's private sector consultant admits that, "infrastructure ... will be of huge interest to foreign investors in search of steady returns ......Infrastructure is the new fixed income."

The Canadian government gave extraordinary huge loans to troubled institutions after the 2008 financial crisis. If dispensing more corporate largesse is not their actual goal, the federal Liberals could use the same fiscal powers derived from the Bank of Canada to fund all necessary infrastructure renewal at federal, provincial and municipal levels.

Footnotes:

1. Economist John Hotson

http://livingeconomiesforum.org/1996/15hotson

"When the Bank of Canada encourages the Canadian government, provinces, and municipalities to borrow in New York and Tokyo it is a betrayal of Canada. Where should they borrow when new money is needed for government spending? They should borrow at the government owned Bank of Canada, paying near zero interest rates-just sufficient to cover the Bank's running expenses."

2. Thatcher – ‘Sorry You’ve Lost Your Job’

http://michael-hudson.com/2013/04/1843/

......what the “free marketers” promised would be an efficient, streamlined, low-priced economy has become the highest-priced economy in the world...... The telephones cost more, and nearly every kind of public utility that was privatized now costs much more, capped by railroad and bus service.

3. Improving Access to Financing and Strengthening Canada's ...

www.fin.gc.ca/pub/report-rapport/2011-7/ceap-paec-2f-eng.asp

To soften the impact of the crisis, the first phase of Canada’s Economic Action Plan included measures to provide up to $200 billion to support lending to Canadian households and businesses through the Extraordinary Financing Framework.