A lawyer by the name of Galati is either outside his mind, or the smartest lawyer that ever lived. Due to the fact that he rarely loses cases that he takes on, a betting man would probably put money on the smartest man alive. Galati has taken on a lawsuit that to most, seems nothing more than tall tale gone awry.
He is attempting to sue the Queen of England, three ministers of Canada and the Bank of Canada all at the same time. Sounding more like a joke “What does the queen of England, three ministers and the Bank of Canada have in common”, this lawsuit is no joke, nor is it going away as Canadian officials had hoped.
The Committee on Monetary and Economic Reform (COMER), is a group that is challenging the legality of the Canadian government’s funding activities. Alleging that the three plaintiffs have been conspiring with the financial institutions: IMF (International Monetary Fund), the BIS (Bank for International Settlements), and the FSB (Financial Stability Board). What are they allegedly conspiring to do? The case alleges that they undermine Canada’s monetary and financial sovereignty.
Why have you not heard about such a grand case? Galati insists it is because the powers that be don’t want you to. The fact that his case is not splashed across page number one of the most prominent news media outlets in Canada, is no surprise.
The plaintiffs insist that the conspiracy is a result of changes that were made as far back as 1974, when the Bank of Canada cut all ties to the point of almost stopping lending practices with the Canadian government. During the Great Depression, the Bank of Canada was nearly the sole financier to the Canadian government.
Keeping Canada afloat throughout WWII, it both financed money to the government and loaned it money without adding interest on those loans. Any of the profits that were received by the BOC were then given to the government with the stipulation that operating expenses would be deducted from the total. That equalled over $1.7 billion dollars that were sent to the Receiver General on an annual basis.
Because the Bank of Canada and others named in the lawsuit were no longer providing loans to the government it was forced to use private finances to borrow money. In doing so, they have had to pay hundreds of billions of dollars in interest over the course of the private loans. Last year alone, 28 billion dollars, which is more than ten percent of the entire federal government’s 277 billion dollar total expenditures have been spent paying off the debt acquired.
That is more than Canada spends on Health Transfer and National Defense combined. The Bank of Canada Act allows the government to take out loans that have one third of the government’s expected annual revenues. In provincial areas, it equals a quarter for the next fiscal year. Canada can then pay back the loan using only the incoming revenues and then they are forced to take out another loan to clear any other deficit in the budget.
The problem is that although having no national debt, it can lead to an inflation of money in the Canadian economy. Since the government can borrow as much as it wants, inflation does not pose a problem. The base of the suit is that by the Bank of Canada denying loans, they have forced the government to pay interest to private market lenders and make the money on interest.
Because the Bank of Canada could not collect interest, they made a deal with other lenders so that interest could be collected and others would profit when they could not. Those other institutions are the other defendants in the court case. In borrowing money from private lenders, the claim is that the national debt began to rise to the deficit of the Canadian public.
There is a reason why the government doesn’t want anyone to know that this suit exists, and it may just be that the allegations are true. If that is the case, it can really cause a lot of disbandment of financial institutions and major political figureheads all across Canada. The truth is that if the case goes through, and the plaintiff wins the case, there may be some real hell to pay in Canada. Stay tuned.