In the dark

Following up on last night's post about Bill C-10, let's start taking a look at a few potentially problematic areas of the Cons' budget implementation bill.

To start with, there doesn't seem to be much dispute over the need to create some new flexibility for the Canada Deposit Insurance Corporation to stabilize Canada's financial system. But there doesn't seem to be a significant need for the CDIC to be substantially more secretive in taking those steps - and indeed there's probably a case to be made that more disclosure is needed in the case of emergency action involving potentially huge amounts of money.

Which means that it's worth noting that the "bridge institutions" which the Cons want the authority to create would be shrouded in secrecy:

253. The Act is amended by adding the following after section 45.2:

45.3 (1) Subject to subsection 12(1) of the Privacy Act, any information with respect to the affairs of a federal institution designated as a bridge institution or of any person dealing with it is confidential, shall be treated accordingly and shall not be disclosed.

While there's a limited set of exceptions set out by the draft legislation, those refer to disclosure within government rather than allowing for any public scrutiny. And the provision would also override the Access to Information Act (see section 255).

Compare that to the general operations of the CDIC, which are subject to the oversight normally applicable to Crown corporations. Rather than applying the same set of rules, the Cons are looking to blanket bridge institutions with a prohibition on any public disclosure.

Which makes for a serious problem, since the potential costs associated with bridge institutions are probably the largest created by the economic crisis. A bridge institution is by definition a financial institution pushed into receivership - and the U.S.' experience, with single-institution bailouts ranging well into eleven figures, should hint at the potential downside if the CDIC is required to step in and keep an institution afloat.

Of course, it's in keeping with the Cons' usual practices that they apparently think costs which could dwarf the amount of money being put into the economy at large should be hidden from public view. But that should raise a red flag at the best of times for those of us who recognize the danger of massive spending in secret - and can only look even more dubious given the Cons' lack of honesty and transparency even when they know the facts are likely to get out.