Canada's banks received $114B 'bailout,' study asserts
The Royal Bank of Canada sign is seen at its former head office in downtown Toronto, Dec. 2, 2011. (Nathan Denette / THE CANADIAN PRESS)
Published Monday, April 30, 2012 4:53PM EDT
Canadian banks received up to $114 billion in government financial support at the height of the global financial crisis, a recent study reports.
All that aid works out to about $3,400 for every man, woman, and child in Canada, according to the Canadian Centre for Policy Alternatives (CCPA) study.
The findings, which were published on Monday, cast doubt on the refrain that the nation's banks were among the most stable in the world between 2008 and 2010.
"The federal government claims it was offering the banks ‘liquidity support' but it looks an awful lot like a bailout to me," CCPA Senior Economist David Macdonald said in a prepared statement.
Canada's largest banks dipped into programs from the U.S. Federal Reserve, the Bank of Canada and the Canada Mortgage and Housing Corporation during the worst of the crisis, the study found. Many availed of the programs all at once.
At the same time -- between October 2008 and June 2010 -- the nation's banks raked in a reported $27 billion in profits.
"Without government supports to fall back on, Canadian banks would have been in serious trouble," Macdonald claimed.
The CCPA asserts that the support is akin to a "secret bailout," something Prime Minister Stephen Harper's government maintained the banks did not require.
Macdonald completed the study by estimating the value of government support using data from the CMHC, the Office of the Superintendent of Financial Institutions and the Bank of Canada. Quarterly reports from the nation's banks were also used.
A breakdown of support by program is available online. (Link opens .PDF file)