You’re waiting to make a left turn, and a desperate bank executive will walk over to your open window and say, “Buddy, can you spare a few hundred million?”
Recent news reports reveal bank executives have been doing a stellar job of sucking money out of consumers and motorists alike.
Third-quarter stats show the Toronto-Dominion Bank took in $2.77 billion in net profit for those three months; the Royal Bank of Canada took in $1.4 billion; the Bank of Montreal (BMO) also made $1.4 billion; Scotiabank took in $2.1 billion; the Canadian Imperial Bank of Commerce (CIBC) trailed the pack with $1.1 billion.
That’s net profit, for the mere three months ending July 31.
For goodness sake, people, stop giving them money — it only encourages them, and they’ll probably spend the bulk of it on cocktail lunches.
Not to mention the banks just received a generous gift from the Bank of Canada, which this week announced a 0.25 per cent increase in the interest rate.
Without so much as lifting a pencil or shaking down a troubled debtor, the banks will haul in millions in extra cash as consumers pay more to borrow money. Royal Bank CEO Dave McKay said this week the interest rate increase will bring in $300 million in bonus revenue over the next five years, according to a Canadian Press report.
I could have sworn I saw that guy last week at the intersection of Thorburn Road and Prince Philip Drive.
Meanwhile, the business news pages recite a litany of woe and travails among the working peasantry.
The average Canadian, says Equifax Canada, is $22,595 in debt, not including mortgage debt.
The average Newfoundlander is $23,627 in debt, not including mortgage debt.
It turns out the cliché is true: everyone really is just working to pay the bank.
The debt statistic is something Premier Dwight Ball and Finance Minister Tom Osborne should bear in mind when they revamp the province’s antiquated tax system.
The Liberals obviously didn’t pay a whit of attention to it when they raised the gas tax, implemented their heinous “deficit-reduction levy,” applied the HST to insurance, etc.
People’s debt load will become even more cumbersome when Muskrat Falls bills kick in. (Although it will give everyone a warm, fuzzy feeling to use supposedly “clean” energy and to subsidize power usage by our friends in Nova Scotia.)
It is tempting to marvel at how utterly irresponsible and irrational consumers can be. It is astounding to see people eagerly join a lineup of 50 vehicles to save a paltry $7 on gas. Then they go blow a few grand and rack up more debt on their latest diversion — toys such as a Sea-Doo or Ski-Doo, or another trip to Florida or the Dominican Republic.
And yet … according to a Canadian Press report Wednesday, 32 per cent of Canadians attribute their rising debt level to “higher living expenses,” while 25 per cent blame “unexpected expenses” (see: new winter tires, kids’ braces, etc.). A survey by the Canadian Payroll Association, on which the CP story was based, showed 47 per cent of Canadians live “paycheque to paycheque.”
It must be noted the association’s survey was conducted via the internet and cannot be credited with statistical reliability because it did not use random sampling. Ball and Osborne can therefore reasonably declare, “There’s no way 47 per cent of Newfoundlanders live paycheque to paycheque,” before heaving more taxes upon their already burdened backs.
Not to worry. Economists gleefully declare the Canadian economy is growing and getting stronger. This week, you might not even see any bank executives at busy intersections.
Brian Jones is a desk editor at The Telegram. He can be reached at firstname.lastname@example.org.