Canadian Government & Finance Machinations To Rip The Tax Payers

Canadian Government & Finance Machinations To Rip The Tax Payers

..."Canada is richer than government pretends. The recent use of full accrual accounting in government financial statements proves this. Dishonest government accounting procedures in place until recently misled the public by greatly undervaluing our wealth, even to the point of pretending some of our assets did not exist. In 2002, the government ceased this practice and moved to full accrual accounting in the federal financial statements. (See annex 6 of the Budget Plan 2003 which details the implementation of full accrual accounting.) This came about as a result of pressure from Canada's auditor general, Denis Desautels, who refused to sign off on the books without the implementation of accrual accounting, that is all liabilities balanced against all assets...

...It is not social and environmental programs that caused the massive debt of Canada. It was the scandalous mismanagement of Canada's money permitting outrageous benefit to banks...

...The purpose of the elimination of the statutory reserves was to bail out the banks and pay for their lost assets at the expense of the taxpayer."...

Thanks to Gary for sending this. Most educational and enlightening. To see how we are constently manipulated and to better understand how our money is usurped by the government, the following site is a must read (at least some of it) as it shows how the books are cooked to steel from us

www.cafrman.com

Chris Gupta
---------------------------

Chris,

Just had a look at your website. Excellent! Much to talk about. Your articles on banking, income tax and money creation prompted me to forward this article to you. I have been aware of the Canada Action Party for years, but many are not. There focus is on the creation of money by the bank of Canada, amongst other things.

I previously spent five years in municipal politics (I actually hate to say that!). It was an eye opener. I was asked to run for this party federally last election but declined. I do think however, that it has merit.

Are you aware of this party? Would appreciate your opinion.

Gary

----- Original Message ----- From: "Gary Vance" Sent: Thursday, May 05, 2005 10:13 PM
Subject: Good article on Canadian government & finance

----- Original Message ----- From: "Connie Fogal" To: Sent: Wednesday, May 04, 2005 4:24 PM
Subject: CAP/PAC Supports Budget Amendment Deal of Martin/Layton but says They Do Not Go Far Enough

Canadian Action Party(CAP)/Parti action canadienne (PAC)Supports Budget Amendment Deal of Martin- Layton but says They Do Not Go Far Enough

May 2, 2005

The Agreement between the NDP and the Liberals to amend the 2005 budget in the best interest of the nation should be hailed by all Canadians. The investment in the environment, housing, and childcare will pay large dividends to all Canadians because it will make Canada a better place to live.

It was the pressure of the opposition in a minority government threatening to bring down the government that caused the Liberal government to admit "We Do Have the Money" for social programs and the environment, as CAP/PAC has been saying since 1997.

The priority issue of CAP/PAC is monetary and fiscal policy reform that brings government accountability to the management of our money to be administered on behalf of the Canadian people. Government needs to pay attention to the preference of the citizenry in spending priorities, not just that of corporations and banks. Current polls show that Canadians want government expenditure on health care, education, employment, and the environment, not on tax cuts, subsidies for corporations, nor paying down the debt.

Canada is a very rich country. CAP/ PAC wants our riches used for our citizenry. We can now and always could afford the programs and even many more than are set out in the Martin/Layton budget amendments. The CD Howe Institute, the Canadian Council of Chief Executives, the Canadian Chamber of Commerce, and the Canadian Federation of Independent Business do not want citizens to know that because they want our money to be used for their interest only, not that of all the citizens. The mainstream media will not admit that because they are owned by members of these organizations, and exist to support those institutions, not the interest of all Canadians.

What is the proof that Canada has the money or the capacity to use our money for people programs?

The first proof comes from the government's own admission under pressure from the auditor general that it had been "cooking the books" since confederation by failing to show many of our nation's assets on their financial statements. In other words, the assets did not balance the liabilities, such that it appeared we were in far greater debt and less rich than was true.

Canada is richer than government pretends. The recent use of full accrual accounting in government financial statements proves this. Dishonest government accounting procedures in place until recently misled the public by greatly undervaluing our wealth, even to the point of pretending some of our assets did not exist. In 2002, the government ceased this practice and moved to full accrual accounting in the federal financial statements. (See annex 6 of the Budget Plan 2003 which details the implementation of full accrual accounting.) This came about as a result of pressure from Canada's auditor general, Denis Desautels, who refused to sign off on the books without the implementation of accrual accounting, that is all liabilities balanced against all assets

The most important benefit of accrual accounting is identified by the statement on page 279 of Budget Plan 2003 which reads:"Full accrual is more comprehensive as additional liabilities are recognized and non financial assets and government buildings are now included"

By including in the ledger assets previously omitted, the value of the federal debt shows now as dramatically declined by $28.8 billion. (The estimated value of the federal debt (accumulated deficits) at March 31, 2002 declined from $536.5 billion to $507.7 billion. This was a $28.5 billion write down of our debt without spending one dollar of revenue. For years Canadians were paying interest on $28.8 billion because of faulty accounting.)

Since our 1997 inception, CAP/PAC has been fighting this Enron type accounting ongoing since confederation.

CAP supports the budget amendment's immediate use of our money for environment, housing and childcare rather than providing tax cuts for corporations who then turn around and export their operations and/or jobs offshore. Remember, however, that Martin still intends to implement the corporate tax cuts, but later (and so does Harper, even faster).

It is very important that the citizenry realize that it is possible to maintain as top priority use of money for people and environmental programs. Mechanisms are available to our governments if they choose to use them . They have power over the creation, use and application of money that can deliver to the people what we want. It is not just a question of prioritization of the use of our money, i.e., feed the people rather than/or at least before the corporations and banks . It is a question also of managing the money supply with rules that make it available for what we want, rather than just what the banks and major international corporations want.

The Martin/ Layton amendments can be paid for in two ways primarily:(1) Greater use of our Bank of Canada, and (2) Reinstatement of Statutory Reserves.

1. Bank of Canada (BOC): Today the Bank of Canada provides the Receiver General of Canada annually close to $2 billion in profit from the BOC operations. The actual amount may be found in the annual report of the BOC. This amount could be greatly increased by the government borrowing more from the BOC, which it wholly owns, as it previously did, rather than borrowing from commercial banks and non residents.

CAP/PAC estimates that $5 to $6 billion more could be generated for the Receiver General if the government refinanced 15%-20% of the debt with the BOC, just like corporations buy back their debt. The government of Canada has the authority under the BOC to direct the governor of the BOC to undertake this action now.

Madelaine Drohan, business columnist, wrote about the BOC in the Globe and Mail Sept 16, 2000:
under the headline Canadians Reveal Shocking Ignorance of Central Bank. She wrote: "Given the role all these institutions play in our daily lives, such low public awareness is unhealthy. And in a democracy where these institutions are supposed to be run for the interest of the people, it is unacceptable. How can we be sure they are working for us if we do not even know what they do".

When the Central bank holds federal debt, the interest paid on it finds its way substantially back as dividends to the government which since 1938 has been the sole shareholder of the Bank of Canada When the chartered banks hold the same debt, the interest on it stays with the chartered banks..

2. Statutory Reserves: In 1991 Canada's chartered banks suffered big losses due to their gambling. in gas and oil, international real estate, and much else incompatible with banking. They had lost much of their capital. They came crying to our government to bail them out. The Mulroney Conservatives did it by the elimination of statutory reserves, phasing them out over two years, 1991-1993. The purpose of the elimination of the statutory reserves was to bail out the banks and pay for their lost assets at the expense of the taxpayer.

What were statutory reserves? By law (statute) our chartered banks were required to deposit with our bank of Canada a modest part of the short term deposits they received from the public. This deposit was called a "reserve".This reserve was the price that banks had to pay for the licence our government granted to them to be the ones to create most of our money supply, and to profit from that money creation by receipt of interest on the money they created.

Amendment S. 457 ss (4) Chapter 46 Statutes of Canada 1991 passed by the Mulroney Conservative government phased out the obligation of the chartered banks to redeposit with the Bank of Canada a portion of the deposits(usually 8%to 12%) the public had made into their chequing accounts.

The reserves that were deposited with our Bank of Canada earned the banks no interest. That is, our Bank of Canada paid no interest to the banks in return for the BOC holding and using those reserves. The banks did not like that. Those reserves put at the disposal of the Canadian government over $120 billion dollars of interest free money that would grow from year to year with the economy.. (William Krehm, The Journal of the Committee on Monetary and Economic Reform, Volume 16, No.1, January 2004.) The quantum used to be even more when the amount of reserves, i.e., the percentage of deposits, was much higher.

To make matters worse, after phasing out the statutory reserves, our government turned around and borrowed from those same banks, either directly or indirectly, the money it needed to make up for the loss of the deposits, and now pay those same banks $5 to$8 billion interest per year on that money that previously had been interest free to our government and hence to us the citizens. (William Krehm). That means citizens are paying an unnecessary $5 to 8 billion interest per year to the banks, on an unnecessary debt. Most of the national debt about which Conservative and Liberals make such a fuss originated from the elimination of the statutory reserves and the transfer of debt from the BOC to the chartered banks. That has been a most carefully guarded secret.

The very least Layton should demand in return for NDP ongoing support following the passing of the budget is the reinstatement of statutory reserves. To do any less is to perpetuate one of the greatest abuses of taxpayer's money exceeding the current sponsorship scandal. It is not social and environmental programs that caused the massive debt of Canada. It was the scandalous mismanagement of Canada's money permitting outrageous benefit to banks.

CAP/PAC calls on all political parties to commit to the reinstatement of statutory reserves. Voters should accept no less! To quote William Krehm, editor of the Journal of the Committee on Monetary and Economic Reform, COMER, "It is time we all started beating the drums for a royal commission to find out the extent of the expoliation of the public treasury that makes the sponsorship scandal child's play"

The Canadian Action Party believes that knowledge of public finance and its management is of such vital importance to all our nation's citizens. Because of the effect it has on our daily lives this subject should be incorporated in all K-12 provincial education programs. Until then CAP will continue to provide to Canadians the information needed to ensure that Canada has a strong economy that provides a better life for all and that the government uses all its constitutional and legislative powers to ensure that happens.

Contacts: Jim Jordan (604) 277 4139 grandpajj@hotmail.com; Connie Fogal (604) 872 2128 conniefogal@telus.net www.canadianactionparty.ca CAP/PAC #385-916 West Broadway Ave. Vancouver BC V5Z1K7

---------------------------------
Connie Fogal, Leader ,Canadian Action Party/ parti action Canadienne
Tel: (604)872 2128; or (604) 708 3372
(FAX: 604) 872 -1504
Canadian ActionParty Head office : # 385- 916 West Broadway, Vancouver BC, V521K7; e mail: info@canadianactionparty.ca
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"The world is not, in fact, ruled by global corporations. It is ruled by the global financial system." David Korten
.................................
"The ability of a party to make a valuable contribution is not dependent upon its capacity to offer the electorate a genuine government option. Political parties... act as a vehicle for the participation of individual citizens in the political life of the country. ...Marginal or regional parties tend to raise issues not adopted by national parties. Political parties provide individual citizens with an opportunity to express an opinion on the policy and functioning of government. Each vote in support of a party increases the likelihood that its platform will be taken into account by those who implement policy, and votes for parties with fewer than 50 candidates are an integral component of a vital and dynamic democracy. " Figueroa v Canada (Attorney General) 2003 SCC 37
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"Anyone who trades liberty for security deserves neither liberty nor security"...Benjamin Franklin
..................................
"The constitution of Canada does not belong either to Parliament, or to the Legislatures; it belongs to the country and it is there that the citizens of the country will find the protection of the rights to which they are entitled" Supreme Court of Canada A.G. of Nova Scotia and A.G. of Canada, S.C.R. 1951 pp 32

posted by Chris Gupta on Wednesday May 18 2005
updated on Saturday September 24 2005

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Readers' Comments

Good Service.

Posted by: Frank Johnson on July 15, 2005 03:10 AM

Throughout history, governments have been tempted to use dishonest accounting methods to allow them to spend money on things they should not be spending it on. In the private sector there is something called GAAP (generally accepted accounting principles). In general, the private sector uses these standards because if they don't it is hard to attract investors. But governments are under no such restrictions. If you ever wondered why your cash isn't worth as much this year as it was 10 years ago, the answer is "fiat money" and "dishonest government accounting practices". As long as people worship "majoritarianism" instead of "limited government", we will continue to decline.

Posted by: Scott on June 14, 2009 12:39 PM


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