Bank shots

In the midst of a global financial crisis, I'm not sure how many Canadians were being kept up at night worrying that federal giveaways to banks might only go where they're actually needed. But the Cons' latest move to ensure that the entire banking sector wins out long before anybody else should satisfy at least that target group:

In addition to increasing the amount of money available to buy mortgage debt, the Department of Finance also slashed the price it will charge banks for guaranteeing their loans.

Commercial banks have complained loudly that the loan guarantee program designed by Ottawa a few weeks ago was too expensive to be of much use.

While other countries' banks could buy what amounts to insurance at a low price, Canadian banks were paying higher rates. The program was only useful for banks in dire trouble, and was putting the Canadian financial institutions at a competitive disadvantage globally.

In other words, faced with an argument based on little more than a desire to see Canada match the giveaways already happening elsewhere, the Cons were apparently happy to make sure that even banks facing no particular financial trouble can get in on cut-rate, publicly-funded benefits.

Of course, the Cons are trying to put forward their usual trickle-down theories to the effect that what's good for the banks is good for everybody. But considering the banks' track record, there's every reason for suspicion that the real effect will merely be to improve the bottom line of already-healthy banks, while ignoring the real economy which actually needs the help.