• Canada’s federal debt is over $1.2 trillion and growing.
• Interest on that debt is $125 million every single day!
• Spending money we don’t have is stealing from our grandchildren who will have to pay it back.
• Politicians are spending money they don’t have and using it to “buy votes.” This is immoral.
• The CHP would pay down the debt and introduce Mandatory Balanced Budgets; NO deficit spending!

Sadly, every government since Pierre Trudeau’s Liberals has given away the right to coin money—which the Constitution says belongs only to the federal government—in effect “renting” Canada’s money from the chartered banks, which creates our money as interest-bearing debt. Compounding interest deepens the debt, which our children will inherit: now approximately $30,000 per man, woman and child… and rising.

The Better Solutions provided are intertwined to create solutions that correct each of these problems.

The core of the National Debt and Deficit problem is the failure of all parties—except the CHP—to recognize that deficit spending, which increases government debt, is a moral problem: stealing tomorrow’s money from our children and grandchildren, to buy votes today.

The National Debt (In Feb. 2025 $1.25 trillion) must be treated like a national “mortgage”, to be paid off at about $4 billion a month. That would make Canada debt-free in about 50 years (depending on interest rates). Since our debt is increasing at a rate of $110 million dollars a day, we must break the back of this debt by committing greater resources to it than is accumulated in a month. Time is of the essence!

Reducing the debt would enable us to lower taxes without cutting important services. The interest we pay on past government borrowing is like “buying oats for a dead horse.” These expenditures add no services for the taxpaying public; they only serve to enrich the financial institutions from which the government borrowed unwisely. Canada must be debt-free!

The CHP would have the Bank of Canada make interest-free loans to provinces, municipalities and other local authorities for locally-chosen infrastructure projects.

This is exactly how the Bank of Canada, which is a government agency and therefore belongs to Canadians, formerly functioned in Canada. The CHP would reinstate the Bank of Canada to its former role. This would also provide the needed infrastructure to process goods in Canada, thus minimizing the negative effects of tariffs imposed from our neighbours to the south.

When those interest-free loans are repaid, the stimulus money will be retired from circulation to prevent inflation—and the new bridges, highways, roads, port facilities, light rapid rail transit, “green” power generation, water and sewer and other infrastructure will remain.

The CHP monetary reform would be good for the economy and reduce government debt, without monetizing the debt and causing inflation, at the same time this plan would provide employment for Canadians.

To make the reforms, we would stop funding government by the issuance of T-Bills (which are really government bonds) . . . but we would do it gradually. We start with the Infrastructure Program, funded entirely by new money created by the Bank of Canada; that money goes into circulation, and as it moves through the economy, and enlarges the economy (by providing the liquidity the banks are still reluctant to create) prosperity would return. Then, by gradually expanding the range of the program, we would simply displace more and more of the T-bill financing—which was Bank Created Money (BCM) with billions in compound interest attached to it.

Secondly, we would simultaneously return to using one of the tools that previous governments used to control inflation, the statutory reserves. Statutory reserves required the commercial banks to put a percentage of their deposits in reserve. The Bank of Canada controlled the amount of money mainly by lending to the government significant amounts of new money as needed while, at the same time, controlling the amount of money created by the commercial banks through the statutory reserve system. The federal government has the authority to adjust those deposit reserves. These reserves were abolished by Prime Minister Brian Mulroney in 1991 to bail out Canada’s banks, which had considerable money tied up in defaulted real estate loans.

The proportion of the money supply that comes from the sale of T-bills to the banks (Bank Created Money, which is actually borrowing from the banks with the interest paid up front in the form of a discount rate on the T-bills) is now 98%; we want to work it down to 50% gradually . . . then move to 100% Government Created Money using the Bank of Canada to serve the interests of Canada and Canadians.

Our Plan

• CHP Canada would treat our debt like a national mortgage amortizing it over 50 years. By retiring our debt in 50 years, we would create a tax break for Canadians without reducing important government services. This would also provide a visible goal for Canadians as opposed to a debt that appears to reach many generations beyond the incurred debt.


• The CHP would have the Bank of Canada make interest-free loans to provinces, municipalities and other local authorities for locally-chosen infrastructure projects. These facilities would improve access to resources and to markets, and the increased economic activity generated would enable the borrowing agencies to quickly repay the loans—which would then be retired, so that the injection of capital would be non-inflationary.


• After World War II, Canada enacted a plan very much like this; the construction activity touched off by that policy created the longest-lasting economic boom in Canadian history. And when the loans were repaid, the permanent infrastructure was still there. Today, it’s crumbling, and the only solution that the other Parties offer is taxing you to rebuild it. It’s time for a new infrastructure initiative—one that works and doesn’t rely on increasing your tax burden.


• The Bank of Canada would be reinstated to its former role, which controlled the amount of money created mainly by lending to the government significant amounts of new money as needed while at the same time controlling the amount of money created by the commercial banks through the statutory reserve system. 


• The CHP would reinstate statutory reserves to control the amount of money created along with returning the creation of money to the Bank of Canada, where it belongs.

These solutions would help Canada’s economy recover from years of mismanagement. Future generations would be protected from similar abuses by a Mandatory Balancing law.

 

Updated: March 28, 2025