The Senate and Bank Mergers

L. Ian MacDonald wrote a defence of the Senate in today’s Montreal Gazette. He makes the familiar argument that it provides useful study of policy issues.

However, his first example is the 2002 Senate report supporting bank mergers. In the wake of the global financial crisis, we should be glad that opposition MPs like Lorne Nystrom provided a sober second thought on this issue.

The Gazette has posted the following letter from me in response to MacDonald:

Abolish the Senate and support independent policy analysis

Re: “A scandal shouldn’t overshadow the good work the Senate does” (L. Ian MacDonald, May 29)

L. Ian MacDonald writes, “back in 2002, the (Senate) Banking committee turned out an outstanding report recommending large bank mergers in record time of only two months. … It was no mystery — many senators on the Banking committee had been executives or directors of banks.”

It is widely acknowledged that rejecting bank mergers was a wise decision that helped Canada weather the financial crisis better than many other countries. The Senate’s quickness to endorse bank mergers, based on close ties to Bay Street, is hardly a compelling defence of the institution.

MacDonald’s broader point is that the Senate has generated some thoughtful reports on policy issues. But is spending $92.5 million every year on the Senate really a cost-effective way to produce needed policy analysis?

By comparison, the Parliamentary Budget Officer has provided policy analysis that is at least equally good on an annual budget of $2.8 million.

Some Senators have done good work. If we want more and better policy work, we should abolish the Senate and invest some or all of the savings in directly supporting independent policy analysis.

Erin Weir
Economist, United Steelworkers
Toronto

2 comments

  • Zing!
    Wow, he really walked right into that one, didn’t he?

  • Thomas Bergbusch

    A pithy letter. I don’t think that one should consider abolishing the Senate without the adoption, and probably constitutional inscription of, mixed-member proportional representation in the House of Commons. MMPR would have to be calculated on a province by province basis, not for Canada as a whole, to ensure representative and equitable regional/provincial representation in Parliament. I think the best way to do this is the 1-2-3 method (i.e. single transferable ballot for all MPs elected in a riding) with “corrective” seats allocated according to the proportional success of parties in each province.

    There is no need for party lists, as voters rightfully distrust unelected party bureaucracies to select the correct representatives. One solution would be to appoint/”elect”, from each eligible under-represented party, the losing candidates who received the greatest proportions of votes in their respective ridings. So all members of Parliament would be exposed to the scrutiny and discipline of local riding associations, and would have to present themselves to voters for scrutiny. These candidates would then be required to represent their provinces, not their own ridings, where they would not be allowed to have offices.

    On the other hand, Eugene Forsey’s suggestions for reforming, and limiting the partisan nature of, the
    Senate strike me as being as good as abolition, especially in the short term.

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