by Betty Krawczyk
Many Canadians still think highly of Pierre Trudeau, but in 1974 he did one terrible thing that changed the lives, for present and future, of all Canadians, for the worse.
Trudeau gave the leading operations of the Bank of Canada over to the private banks operating in Canada.
The Bank of Canada was first established by Prime Minister Richard Bennet in 1935 as a private central bank, but was then nationalized by William Lyon Mackenzie King in 1938.
By nationalizing the bank, Mackenzie King meant for it to belong to the people so the Canadian government could borrow funds with little or no interest for capital expenditures. The mandate of the newly nationalized Bank of Canada was to act as the banker to the government and to manage the public debt.
As Mackenzie King famously said: "Once a nation parts with the control of their currency and credit, it matters not who makes that nation's laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most sacred responsibility, all talk of sovereignty of parliament and of democracy is idle and futile."
So the Bank of Canada was nationalized in 1938 and the government could now borrow money with little or no interest. And it worked. The Canadian government built freeways, public transportation systems, subway line, airports, the St. Lawrence Seaway and funded a national health care system and the Canada Pension Plan.
But then Trudeau, under the influence of the international financial group called Basel's Committee's Recommendations (The Basel Committee on Banking Supervision) made the decision to halt the borrowing of money from the Bank of Canada, and instead, chose to borrow from the private banks who instead of lending to the government at no interest, or low interest, introduced higher interest rates along with compound interest. All banks know very well the magic of compound interest.
And Pierre Trudeau must have known that the mounting compounded national debt would lead to Canadians eventually owing a dollar fifty for every dollar of their disposable incomes. After all, he studied economics at the London School of Economics.
Surely the professors there knew about compound interest. So Pierre Trudeau, instead of feeling blessed that Canada, unlike the US, had a nationalized central bank, signed our bank away to the private banks.
Couldn't Trudeau, such an educated man, surmise that citizens in a few years would be struggling to make car payments and meet rent and mortgages and student loans and to buy healthy food while last year's profits for the big five (that's Royal Bank, TD Bank, Scotiabank, Bank of Montreal and CIBC amounted to $31.7 billion?)
If he did, he didn't care. But it doesn't have to be this way. It really doesn't. Our Bank of Canada is still there.