For the longest time, I have been pondering the timidity of successive governments to be on anything but the good side of the corporate titans who walk among us. Certainly, we sometimes hear brave words that are scripted from the world of political theatre, but when the metal hits the pedal, as they say, the veil is lifted, and compliance to the corporate imperative is guaranteed.
Take postal banking, for example. Canada actually has a long history of postal banking that was ultimately brought to an end by the intercession of big banking interests:
This system began operating in 1868 with 81 locations and grew quickly. By 1884, there were 343 post office savings banks, with a balance of $13 million from almost 67,000 accounts. However, Canada's postal banking system confronted challenges from chartered banks by the 1890s. These banks, facing a recession, became interested in attracting the kind of small-time depositors who used post office savings banks and they actively worked to undermine postal banking. In 1898, the chartered banks successfully lobbied the government to reduce the interest rate paid on deposits at postal savings banks from 3% to 2.5%. They also worked to eliminate advertising by postal banks.
Despite the fact that the services allowed anyone to have an account, it ended in 1969. Since that time, there has been increasing interest in bringing them back, largely due to the obstacles that poor, disenfranchised people have in securing an account with one of the big banks, whose onerous (and very lucrative) fees pose an insurmountable barrier to many. Indeed, a secret study was conducted by Canada Post that showed both the need for, and the benefits of, postal banking. Unfortunately, most of that report's finding were redacted.
The only alternative many Canadians currently have is the usurious pay-day loans and check-cashing services, which, through astoundingly high interest rates, cruelly bleed the hapless user. In a report done two years ago by Marketplace,, the rate for loans appeared to be an astounding 47%:
Lenders in Canada can charge up to 60 per cent interest, according to the Criminal Code of Canada. A rate of 46.96 per cent seems well under this threshold, but there are several ways of calculating interest. In fact, a 46.96 per cent APR (annual percentage rate) comes in at just under 60 per cent when using the calculation dictated by federal law.
"So they all manoeuvre just below, just to make sure there are no [criminal] charges," said Ringuette. "Quite a good business plan for them. But what about Canadian consumers?"
Given that interest rates were at record lows until recently, that people would borrow/cash cheques at one of these businesses attests to their desperation, a desperation that could be alleviated by postal banking.
Unfortunately, our government overlords seem very loathe to permit the kind of competition that would unsettle not only payday loan services but, more importantly, the fat profits enjoyed by the big banks. Why? One part of the answer surely lies in the composition of our federal governments, including the current one. Most are hardly what you would call rank-and-file Canadians; the kind of money it takes to run for office and get elected is to be found largely in campaign donations from the moneyed, who will not back those wishing to upset the applecart. As well, the vast majority of our representatives move in circles that most of us only know about second hand. Not for us are the environs of the Bronfmans, the Rodgers, the CEOs of big business, all with vested interests in maintaining as much as possible the status quo that benefits them so richly.
None of what I have written should come as a revelation. However, with current levels of political disengagement, there would seem little prospect of (or need for) real change. Until Canadians start demanding better, our politicians will continue to worship at the altar of our Corporate Giants.
