Bank of Canada policy, directed by the Government of Canada, helped to get Canada out of the Great Depression, assisted in financing the World War II years, built our great land, sea, and air infrastructures: the trans-Canada highway, the St. Lawrence Seaway, and our airports.

Through the 1950s and into the early 1970s, the Bank of Canada helped to establish strong social programs for the citizens of Canada.
This expansion of a Vision for Canada, by using the Bank of Canada, as set within the context of a workable, equitable economic theory, did not cause inflation; and did not result in skyrocketing debt. Given these historical facts, why did we not choose to continue to deploy this workable choice?

The Preposterous Choice...

Question: If you had your own bank (we do), through which you could finance your needs at little or no cost (as its your bank), would you use it? Or would you go down the street to some other bank (as our Government does) to borrow what you need as debt + interest at considerable cost?

The Bank of Canada was established in 1935, through the Bank of Canada Act (1934), and nationalized in 1938. The federal government is the single shareholder, so the Bank of Canada is a public bank, owned by 'we, the people of Canada'.

Initially, the bank fulfilled its PREAMBLE, as set forth in the Act, "to regulate credit and currency in the best interests of the economic life of the nation...and generally to promote the economic and financial welfare of Canada." During that time, Keynesian economic theory prevailed, which argued for an effective and involved governmental presence in nation-state affairs.

The Mistake

During the 1970s, largely due to pressures on government officials from very well organized, well funded lobby groups, successive Canadian governments abandoned Keynesianism; and then made The Great Mistake: our governments decided to shift the control of the creation of most of the government money supply required to assist in financing Canada's needs FROM the Bank of Canada TO the private sector.
It's been downhill ever since.

Moreover, this monetary policy and economic theory shift occurred without notifying the shareholders of the Bank of Canada- the Canadian people- about it; and without any public discussion or debate.

Instead of the money needed by our Government (by us) being created by us through our own bank, the Bank of Canada, to do the things WE want (strong social programs, good (manufacturing) jobs, and environmental protections) it goes to private sector financial institutions- to pay the debt our government created without asking us if they could make this preposterous choice. Isn't that unconstitutional?

The Bank of Canada

The Bank of Canada

The CHOICE OUR GOVERNMENTS HAVE MADE on behalf of the financial 'community' rather than the Canadian people- is 'so preposterous it staggers the imagination'. One commentator succinctly sums up our ridiculous dilemma:

"The very idea of a government
that can create money for itself
allowing banks to create money
that the government then borrows
and pays interest on
is so preposterous
it staggers the imagination.

nnnn--John Hixson, It's Your Money

This page sets the background context for CANADIAN MONETARY REFORM NEWS.

WHO creates our money and WHY is at the very core of our difficulties today.

For more information, go to our homepage Dialogue link; and the dropdown links under the Reforms menu link.