Canada Finance and History

Canada Finance

Finances. – The significant economic progress that the country has registered in the decade has been able to be achieved in a financial climate of substantial equilibrium, thanks to the constant inflow of capital from abroad, especially from the United States and, in recent years, from the United Kingdom.

For the entire period, with the exception of the years 1951 and 1952, the current balance of payments (goods and services) closed with a deficit (increasing from 1954 onwards). This trend is related to the high level of internal investments, which in recent years more than doubled compared to the average at the beginning of the decade. The amount of private capital inflowed from abroad has consistently exceeded the negative balance recorded in the trade balance. In addition to covering the surplus of imports, foreign capital therefore allowed the partial repayment of foreign debts and the further accumulation of foreign exchange reserves. The reasons for such an important movement of capital are to be found, in addition to the favorable prospects of the Canadian economy, in the relatively advantageous tax regime for foreign companies and in the liberalism policy pursued by the authorities. The inflationary effect of the rearmament program (1950-51) and del The investment boom (1956-57) was contrasted mainly with financial measures, which led to significant structural changes in the field of monetary organization and credit control instrumentation. In 1953, measures were taken for the establishment of a market for short-term securities issued by the state, in which not only banks but also specialized agents (dealers) participate. The central bank has the right to intervene directly in favor of operators through the stipulation of sale (purchase) contracts which involve a commitment to purchase (sell) the same securities at term (repurchase or resale agreements).). In June of the following year, the foundations of the money market were extended again, giving banks the ability to grant day – to – day loans to dealers, loans secured by short-term treasury bonds. With the organization of the weekly market of government bonds, the monetary maneuver is strengthened. In fact, the official discount rate is no longer fixed at a fixed rate by the central bank, but is determined weekly at 0.25 per cent more than the yield on short-term bonds (3 months), a yield calculated on the basis of bid prices made during the previous week’s auction.

According to searchforpublicschools, the Canadian credit system consists of nine commercial banks that have over 4,000 branches throughout the country. Since there is an almost complete lack of savings collectors (savings banks), a large part of the deposits of commercial banks is made up of savings deposits (more than half of the total). In the presence of the significant financial needs that the economic development of the country requires, commercial banks were authorized, with the National Housing Act of 1954, to grant mortgage loans for the construction of residential houses. These loans, which are guaranteed by a special state body (Central Mortgage and Housing Corporation), have increased significantly since then, due to the growing demand and the high remuneration offered. At the opposite, ierm loans) and an amount exceeding 250 thousand dollars (raised to 1 million in February 1958 and again to 2 million in November of the same year). With the banking reform of 1954, banks were made subject to the obligation to maintain cash reserves in proportion to the size of their deposits (excluding those held on behalf of foreign countries). The percentage of reserves can be varied by the central bank with effect from the month following that of the provision, within the legal limits of 8-12% and with variations not exceeding 1% per month.

In September 1950, an exchange system was introduced whereby the value of the Canadian dollar was left free to float against the US dollar and, therefore, against all other currencies. As a result, no official parity has so far been declared to the International Monetary Fund by the Canadian authorities. From 1952 onwards, the Canadian dollar exchange rate remained below par with the US dollar, fluctuating from a high of 0.999 at the end of 1955 to a low of 0.947 in October 1959.

History. – On April 10, 1949, the union of Newfoundland with Canada was proclaimed, decided by a referendum held in two stages in June and July 1948. The unprecedented success of the Liberal party in the elections of June 27, 1949, personal triumph of leader Louis Stephen Saint Laurent sanctioned a policy of moderate state intervention in the economy and of decisive international cooperation. Membership of the Commonwealth and the close ties with the USA, to which Canada is bound by elementary economic and political reasons, were and are the two fundamental conditioning elements of Canadian foreign policy: this explains the active participation of Canada. to the Colombo plan (February 1950) and the “Military partnership” with the USA for the defense of the North American continent, which found a further guarantee in the Atlantic Pact (April 4, 1949). Canada’s singular position in the field of international relations allowed him to play a mediating function between the often conflicting directives of the USA and Great Britain, which resulted in a freer play of his own politics. The general elections of 10 August 1953 resulted in a new success for the liberals, the reasons for which are to be found in the greater personal prestige of Saint Laurent compared to the conservative leader George Drew, lacking a substantial ideological contrast between the two parties. Following disagreements and resentments over certain protectionist measures by the USA to the detriment of Canada, the two powers agreed to set up a joint commission for economic and commercial affairs, in charge of resolving the issues that could disturb the exchanges (with very little success). In August 1954 work began for the construction of the canalization project of the San Lorenzo, which was to allow oceanic canals to access the Great Lakes. The project, dating back to the last century, had been stranded due to the prevalence of vast port and railway interests of the USA (1932 Treaty of Washington, not ratified by Congress); later, pressure from the steel industries threatened by the exhaustion of Minnesota mines led the USA to sign the agreement. The works ended at the end of 1959.

In 1955, Canada explicitly expressed his dissent regarding the American attitude towards Formosa, excluding his support in case of conflict and also not hiding his propensity for the recognition of Communist China. Its differences with the USA were further accentuated by concerns that the growing inflow of US capital would lead to its excessive dominance in the national economy; on the Canadian side there was also some anxiety about the large part played by the USA in the construction and equipping of radar stations, judged a threat to its sovereignty. The major event of 1957 was the political overthrow recorded in the national elections on 10 June, which ended 22 years of liberal rule and resulted in the formation of a progressive conservative government headed by John Diefenbaker. Nuisance over high taxes, anxiety about US economic penetration, and aggressive US agricultural surplus disposal programs led to this result. The Anglo-Canadian talks held in Ottawa in October 1957 are framed in the pro-Commonwealth attitude of the new government, in which measures were agreed to increase trade between the two countries and the decision was made to increase the contribution of the C on the Colombo Plan. The need to give a national character to the former colony, which has always been the constant concern of the Canadian ruling class.

Canada Finance