Canada’s biggest banks accepted tens of billions in government funds during the recession, according to a report released yesterday by the Canadian Centre for Policy Alternatives.
Canada is usually singled out as having one of the best banking systems in the world.
The report says support for Canadian banks from various agencies reached $114 billion at its peak.
[quote]That works out to $3,400 for every man, woman and child in Canada, and also to seven per cent of Canada’s gross domestic product in 2009.[/quote]
The figure is also 10 times the amount Canadian taxpayers spent on the auto industry in 2009.
“The Oxford dictionary defines bailout as ‘financial assistance to a failing business or economy to save it from collapse,” the Canadian Bankers Association noted.
“That definitely was not the case here: not one bank in Canada was in danger of going bankrupt or required the government to buy an equity stake under taxpayer-funded bailouts.”
What do you think about this story?
3 Comments
I guess economists decided that it was necessary to keep interest rates low and allow people to keep borrowing. One could argue that it wasn’t really necessary with the state of the banking industry here, but it likely helped us avoid the mortgage crisis that hit the US.
I thought our banks in the US were bad. Canada might be nearly the same
We only consider our banks solid because the housing market hasn’t collapsed. If it does, our government will be on the hook for tens of billions.