1. Sample Resolution 2. Sample Letter or Fax 3. Bank of Canada Report 1. Sample Resolution (Just replace the name of the tax body). CITY OF EDMONTON RESOLUTION WHEREAS, the City of Edmonton must from time to time authorize the issue of bonds to finance capital projects that are necessary to ensure the health and welfare of the citizens of Edmonton; and WHEREAS, the City of Edmonton recognizes the fact that the cost of interest for bonds issued to fund capital projects is a great burden on the taxpayers of Edmonton; and WHEREAS, the Bank of Canada has the responsibility and the authority to "regulate credit and currency in the best interests of the economic life of the nation"; THEREFORE BE IT RESOLVED that: a) The City of Edmonton request the Government of Canada to instruct the Bank of Canada to create and issue interest-free loans to the provinces, which in turn would make interest-free loans to the municipalities for the purpose of funding capital projects and for paying off existing debts. b) That a copy of this motion be forwarded to the Federation of Canadian Municipalities requesting their support and endorsement. 2. Sample Letter or Fax (Address individually to each elected official and relate the proposal to local issues and budgetary projections). Name Address Contact Information Date, Dear ------- The Federation of Canadian Municipalities has asked its membership "to submit resolutions on subjects of national municipal interest". An advisory petition which requests the Canadian Parliament to instruct the Bank of Canada to create and issue interest-free loans to tax-supported bodies fits this criterion. A resolution to this effect has been passed recently by the city councils of Squamish B.C. and Kingston Ontario. In the United States, city councils and taxpayer bodies representing 100 million Americans have passed a similar proposal calling on the Federal Reserve to provide interest-free loans. You can read about the American experience at www.loansinterestfree.com. There will be a Canadian website ready shortly. The 2000-2004 Capital Priorities Plan and Budget mentions an Edmonton "infrastructure funding gap". Under the present system, interest charges on the required borrowing force the city to pay two to three times more than the original cost of a project. This leaves fewer tax revenues for such things as LRT expansion. With interest-free loans the LRT could be extended both south and west, improving our environment and enhancing the downtown core as a transportation hub. The Bank of Canada has been used in the past as a catalyst for change. It issued money to allow Canada to escape the Depression, fight WWII, and lay the foundation for the best 25 years Western capitalism has ever known. It is time for another war. A war against poverty, pollution, inadequate housing and our decaying infrastructure. As you are well aware, infrastructure is also critical for success on the international stage. Interest-free loans for restoring and expanding the capital projects of the City of Edmonton would be a boon to local businesses for this reason. We would like to discuss the attached resolution with you at your earliest convenience and would be happy to answer your questions or do further research for any issues you might raise. Sincerely 3. Bank of Canada Report Research (Thanks to Marc Bombois). Every Friday, the Bank of Canada publishes its Weekly Financial Statistics which is available online at http://www.bankofcanada.ca/pdf/wfs.pdf . On page 11 we find "Monetary Aggregates and Their Components", or Canada's money supply figures. The first column (B2001) is "Currency outside banks" (i.e. actual cash, the money supplied by the Bank of Canada). Look at the monthly figures and note how they fluctuate. Now let's compare Feb. 2000 to Feb. 2001, and see that the amount of currency in circulation increased by $1.37 billion, or 4.2%. This is a fairly typical yearly increase in cash money. Bear in mind that this cash is only one component of the total money supply, and a small component at that. Looking at pages 11 and 12 you will see that there are different "monetary aggregates". We're going to use M2+, which is an accepted and often used measure of Canada's money supply. Now look at M2+ total, column B2037, and note the monthly fluctuations. As with the cash component let's compare M2+ at Jan. 2000 and Jan. 2001, the latest figure available. The money supply has increased by $28.69 billion, or 4.3%, virtually the same percentage increase as the cash component. Since the cash component is part of M2+, the non-cash increase in total money supply is $27.32 billion ($28.69b - $1.37b). This $27.32 billion was money, or deposits, created by banking institutions by issuing loans. The $1.37 billion the Bank of Canada created is less than 5% of the total increase. Canada had a far healthier economy and infrastructure when the Bank of Canada was issuing between one third and one half of the Canadian money supply. Taxes were much lower, unemployment was lower, INFLATION was low, and our dollar was strong The Bank of Canada is wholly owned by the government of Canada and is fully empowered to create money, which it obviously does now but in small part. The Bank of Canada can and should provide low- or no-interest funding to all levels of government for capital infrastructure projects or for the retirement of interest-laden debt. This would be non-inflationary and would stimulate local, regional, and national economies. It is recommended that municipal councils pass resolutions in favour of this proposal and petition the federal Minister of Finance to instruct the governor of the Bank of Canada to change its monetary policy to benefit the citizens of Canada. Back to top.
