Genuflecting At The Altar Of Corporate Giants

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.

Tory Policy-Making: The Dangers Of Simplistic Thinking

Fallacies of reasoning are easy traps to fall into. Whether it is absolutist thinking, straw man arguments or any number of other errors of thought, we are all prone to them, and I am sure that I am no exception. Our best defense against such faulty thinking is to try to cultivate our critical faculties as much as we can; one of the best ways of doing so is to read widely and deeply. There is no alternative, unless wants to make a virtue of simplistic and lazy cognition.

The latter, of course, is what the Harper regime has excelled at since it was first elected. Most issues have been reduced to an either/or option; perhaps the most infamous was the facile and inflammatory statement Vic Toews made over those who opposed his failed Internet surveillance bill, namely that people “can either stand with us or with the child pornographers.”

The Tory propensity for reducing issues to their simplest forms has done a grave disservice to the people of Canada, who have essentially been told time and again that they need not think deeply and engage vigorously with issues of public policy, but rather let an autocratic majority government decide instead what is best for them. People increasingly seem more and more passive when told, for example, that now is not the time to improve the CPP, OAS must be delayed to age 67, or home mail delivery must end, all due to cost constraints.

And yet, with critical thinking, there is always room for alternative approaches to public policy. One such instance can be found in Canada Post. Although a crown corporation with an ostensible degree of independence from government influence, the recent decision to end home mail delivery and raise stamps to $1 each has all the earmarks of a government bent on the erosion and ultimate dismantling of public programs and institutions. No compromises were seriously entertained, for example moving to three-day a week delivery to cut costs. It is a classically absolutist policy decision that will ultimately see the end of Canada Post.

In his column in Saturday's Star, Thomas Walkom introduces a notion that could, in fact, make Canada Post very profitable and facilitate the retention of delivery services: a postal savings bank, an idea that has been advocated by the Canadian Union of Postal Workers.

Arguing that Canada Post has the technology and infrastructure to make such a venture both possible and highly profitable, Walkom points to New Zealand, France, Italy and Britain as successful examples of the concept:

New Zealand’s postal banking system, which was re-invigorated just eight years ago, now accounts for 70 per cent of the profit earned by that country’s post office. The comparable figure for Italy is 67 per cent.

France’s postal savings bank accounts for 36 per cent of its postal service’s pre-tax earnings. Britain is privatizing mail delivery. But it is not privatizing its system of post offices and postal savings banks. They’re too lucrative.

Indeed, as Walkom points out, former Canada Post CEO Moya Greene, who was hired away by Britain's Royal Mail, was an advocate of postal banking:

Speaking to a Senate committee three months before taking up her Royal Mail job, Greene said Canada Post was seriously considering the idea of offering full financial services.

“We . . . need to diversify the revenue stream and be in wholly different businesses than we are today,” she told the committee. “I note, for example, that many postal administrations have made a success of banking.”

Another compelling and potentially gratifying reason to offer such service resides in the conservative nature of our chartered banks which, many feel, should be shaken up a bit by competition. It is their conservative nature that is partly responsible for the fact that upwards of 15 per cent of Canadians are estimated to have no bank accounts at all, making them easy prey to the payday loan operations whose rates in Ontario can exceed 540 per cent.

So again, some reflection, analysis and good policy-making could solve two problems: the end of home delivery and the usurious interest rates that the poor without bank accounts must contend with.

But the Harper cabal is one that cares neither for nuance nor cerebration. After all, the solutions to problems are simple, reflected in just these mantras: privatization good, public ownership bad, and long live the 'free' market.