It is interesting that the federal government is involving itself in private sector business today.Past governments have steadfastly refused to do so on the behalf of the consumer.But these are different times and different measures are called for.Rightly so.
Finance Minister Flaherty has graciously announced that the Government will back the banks to $50 Billion in already insured mortgages.How gracious.The reasoning is that it will free up credit.The logic of that escapes this writer since the mortgages are already insured.If he and the government honestly believe that this is a necessary measure, then it would seem that not only the banks, but the insurance companies are also in serious trouble; to the point of collapse.It is either that or he expects the economy of Canada to go so far south that massive foreclosures are inevitable.Since both, he and the Prime Minister as well as the banks and insurers have continually reassured each other and Canadians that they are fiscally and economically sound even though they have taken some serious writedowns, then the Minister must be expecting a further and devastating decline to the economy.
If this is the case, and by all accounts it appears to be the case, then one has to wonder why the government isn't shoring up businesses that employ people who will feed the banks and the insurance companies.That makes sense.The automotive industry in Canada currently employs about 150,000 people direct.This means there are another 600 to 750 thousand jobs dependent upon that industry alone.
It would make sense that if that industry and its support systems were to receive help, then the possibility of anyone having to seek foreclosure and mortgage insurance claims would be significantly reduced.The government refuses to take action in this area.The auto industry is not looking for handouts.They are asking for loan guarantees, the same as the government is handing to the financial industry.
The government’s refusal to help this industry negatively impacts every sphere of our economy from apple picking to Zenn car production except bankruptcy trustees.People wont buy homes, leading to a decline in housing.People wont buy cars leading to further cuts in this industry.People wont buy appliances forcing another downturn in manufacturing; and the list goes on.
Considering the minister’s home riding is in Oshawa, site of one of GM’s largest facilities, one has to ask just who on the street he has been listening to that he can claim his constituents support this lack of support.Are we to believe that the citizens of Oshawa welcome even more unemployment as well as increased risk of losing their homes?
Canada is headed into recession and our government doesn’t seem to be focused on Canada as much as it is on the global financial markets.Canada’s impact globally is miniscule but our own businesses impact on Canadians absolutely.