Monday, March 30, 2009

Ralph Goodale On The Prudence Of Chretien And Martin

Another great weekly update from Ralph Goodale... Ralph talks about the lack of vigilance and regulation that has led the US economy to the disaster it is currently embroiled in...


The world is in big economic trouble today because greed, incompetence and corruption brought the massive U.S. banking system to its knees, triggering the worst global recession in more than three generations.

How did so much trouble go undetected for so long? One prime reason was the absence of effective regulatory supervision.

Thanks to a better legal framework and more vigilant regulation of financial institutions in Canada, our banking system has mostly avoided the U.S. disaster. It’s easy to be critical of red tape and regulations. But in this case, they served a vital purpose.

At the beginning of Canada’s economic boom back in the mid-1990’s, there were lots of pressures to loosen our regulations, reduce capital requirements and allow big bank mergers – in other words, copy the Americans. But under Paul Martin and Jean Chretien, Canada said no. And history has validated the wisdom of their prudence.

While Stephen Harper now praises that Liberal way of regulating financial institutions, his Conservative are less prudent in other fields – food safety and the nuclear industry are two illustrations.

Another area to watch is the grains industry. The Harper Conservatives have issued policy directives (including draft legislation) to weaken the Canadian Grain Commission (CGC) and expose grain producers to higher risks.

The CGC was created to defend the rights of farmers with respect to the quality and weight of their grain, and to ensure they get properly paid.

The Conservatives are proposing to shift the CGC away from defending farmers, and more toward ensuring the commercial success of grain companies. So inspection services will be slashed and the requirement that grain dealers be bonded will be eliminated.

This could leave many farmers holding the short end of the stick. Parliament will not allow the Harper government to ransack the Canadian Grain Commission.

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