Reacting To Bank of Canada $20 Million in Bonuses

The bank of Canada is not going anywhere. Like that's how it's going to be, no matter whether you like it or not. The whole key here is do our very best to focus on what we can control. You can choose not to participate. You can actually build your own system where you can have more control over where your money flows to and how you access money. And you know, one of the most common questions, I get Rich. When we talk to people about the process of becoming their own banker, the infinite banking concept, they say, hey, how do these policies do with inflation? Does it keep up with inflation?

Well, I want to know what you think. $20 million in bonuses. Did they deserve it? Should they have gotten it? What's your vote? Well, what are we talking about? We're going to dig into the bank of Canada. Everyone knows the bank of Canada. They're great, right? Or are they? Well, turns out they're so great, at least they think they're so great. And everyone that works there so great that they're just going to pay them $20 million of money. Oh, wait, that was this year. Last year they paid them $18 million worth of money in bonuses, and the year before that, $16 million worth of extra money. So altogether, over a three year period, it's $72 million of money in bonuses. Wow. Maybe the Canadian taxpayer should have had some of that. It's a weird scenario. I mean, I think it was weird. Probably the first time that they did it, you know, was $16 million. And it was certainly weird when they increased that amount to $18 million. And it's substantially weird that they increased it to 20 million when they haven't been able to do anything. So what's your take on that, Vern?

Much like I mentioned to you earlier, Rich, when we were recording a really awesome video, which turns out we were not recording, I joked and said it's almost like the bank of Canada put like some kind of inflation protector on their bonuses because the whole time, while inflation was skyrocketing, they were increasing their bonuses to everybody, to their employees, which is quite fascinating. First of all, I gotta mention too, I forgot about this earlier. The big checks. I just love that. That was so cool, the big checks. He's right out in front of the bank of Canada. I find it really fascinating because obviously you and I are dealing with people day in and day out and people who I find who, you know, who have capital or they've done well in building something, they're as worried, if not more worried than the people who haven't been able to build anything because they can see all of these wealth transfer risks, let's call it taxes and inflation and market uncertainty and economy and all these other things. And the people who haven't been able to build anything are being forced to be like, whoa, I now am starting to really recognize there is a problem out there and I have to do something about it. So sometimes when your back's against the wall or you're, you're grasping for oxygen, you know, you're, you're, you went a little too far out into the ocean, maybe, maybe you got pulled by a swell, you get pretty desperate in those types of situations and it forces you to change your behavior. And that's exactly what's happening to viewers that are coming to our channel because people are search for, they're looking for some type of solution because they know, dare I say, unprecedented problems that we're dealing with today. And that video was a really good highlight of. Not only are you dealing with inflation and taxation and all these other problems, you've got companies like that are supposed to be, quote unquote, looking out for your best interest, handing out millions and millions of dollars of bonuses and God knows where they get that money from.

Yeah, exactly. I mean, here's something that's, that's interesting, you know, like, you know, let's just check the government, the bank of Canada's website and see what it says there. Here's their renewed monetary policy framework. Of course they renew that supposedly every five years. I'm sure there's going to be some, maybe some shenanigans that we'll see in that document. But the cornerstone of the framework remains, remains an inflation target of 2% inside of a control range of 1 to 3%. But their target is 2%. This is their mandate, this is what they're supposed to do. Core functions, monetary policy. Let's take a look at that. The objective is to keep inflation low, stable and predictable. Imagine that, it's the front page. It's the main thing. That's literally what they try to do. And yet where are they at 40 year highs? I think they're failing miserably. Like they have not been able to keep tabs on the one primary function that they themselves state is what they want to do. When we consider that, when we really stop and take a moment and think about what's happening here in the, in the world of certainly the bank of Canada and how things are being managed, there's a fundamental problem. The fact that you're doling out money to the people that work for you when the people that work for you haven't been able to do the thing that they're supposed to do. If anything, they should be paying some of the money they earn back, not getting more of it. Right. And don't get me wrong, like I'm all for, hey, you work for an organization, you're employed for a company, and that company is responsible to put food on your table. I get that you have a job. I'm sure there's people that are doing a great job there. But as an organization, if you can't meet the mandate of what you're trying to do, what's the point of your organization? Why are you even there? How is it that you're doling out $20 million in bonuses and pay raises, also pay raises in there? So they're getting their inflationary pay raise each and every year, and yet people all over the country are struggling. It's totally crazy to me. And you know, one of the other pieces, I think that layers onto this. So recently I was on a, on a webinar with par, whole life insurance manager, someone who runs a team basically managing a PAR fund. And they, they look at putting the capital to work every week that they meet with a, with a board of people. They look at long term strategic asset allocation to maintain a strong dividend scale for years and years and years to come. And they, they look at obviously economic factors, what's going on in the U.S. economy, the Canadian economy, and there's components there around inflation that they talked about. They showed the inflation that has increased in Canada and that at the peak was 8.1%. But there was this big blurb in brackets right beside it though, when you exclude energy and food. So you pull components of the inflation number out of the equation just to get it down to 8.1%. So it's something that people can actually stomach because if they knew the real number, probably a bit of a revolt taking place.

Yeah, like that's the thing that I find super fascinating. Again, you and I were chatting about this earlier and I was talking about how I heard this economist once say, oh, inflation is just, you know, we take a basket of random commodities and we just measure the cost increase from last year to this year. Random basket. So to your point, inflation, it's really all made up anyway because they can manipulate what that actually looks like because they can exclude certain commodities that people are out there buying. So they take out, what did you say? Energy and groceries, kind of two pretty important Things that people are actually paying for. And they say that the inflation is 8%. Meanwhile, I've seen the cost of goods in grocery stores and whatnot. Like, these are. We're talking double, triple, quadruple the cost that you might have been paying just a year ago or a short time ago. I joke with my clients and I say, oh, yeah, this is why you're paying $47,000 for eggs. And they laugh because they know anything that you're buying right now. You and I were talking about it earlier. My grocery order when I was a kid. I remember because grocery day was, you know, my favorite day. It didn't come around very often. And we used to buy the big. To get the big grocery order. One once a month, hundred bucks, and the grocery cart was just overflowing with groceries. I was thinking, like, oh, my gosh, this stuff's gonna go bad. How are we gonna eat all this food Now? Of course, we found a way to do it, but that's the point is, like, now a hundred dollars. I remember I went back to New Brunswick in February because when my dad passed and I was on my own, I'm lucky enough that my wife does the shopping around here. I had to go to the grocery store because I got an Airbnb. I grabbed, like, literally, like, a couple of goods. Now, I'm not the most efficient grocery shopper, but I was pretty reasonable. I got, you know, I got some sandwich meat, I got some eggs, I got some bacon. I got a few things that, you know, sausages. Things that were easy for me to cook because, again, my wife does that stuff. But I get, like, how everything you.

Mentioned is protein, right?

Yeah.

Like, that sounds like my grocery. Sounds like my grocery list.

Protein and fruit is basically what I buy. So I get. I get all the stuff, and I literally rich. I kid you not. I had a few things in the upper basket and literally a few things in the lower basket. And, you know, you could still fit a few kids in the basket. That's how empty the thing was. Right. I didn't have any kids with me, but you get my point. I go and ring this stuff in, and I remember because it was this big of an impact. I pay for it $237. Now, I get that there's provincial tax there, but that was not the reason. Like, I thought, holy smokes. Like, literally, how is the average or regular, you know, family feeding their family with these kinds of crazy prices? And it's. It all comes down to mismanagement and all these projections that they make and people getting bonuses for apparently not really doing their job.

Speaking of people not really doing their job. So we have these, these kind of two organizations, this bank account organization. So they have a job. We now know reading their website, the job is to maintain a inflationary target mandate around 2%. That's their job failing on that job. In case we can all agree based on current circumstance that that's an epic fail. Here we go. There's the epic fail of the bank of Canada. Then we have this other organization. It's a pretty big organization. It's a little bloated around the edges. That's my personal opinion. And it's a, it's this federal organization called federal government. So they have some jobs to do. Of course, whether or not they're doing those jobs, we could debate probably for a while. I, my personal opinions are not doing a very good job on a lot of it. So they have been raising, doing policies and policies that have been impacting Canadian consumers specifically at areas like their heating bill and at the gas pump. It's called a carbon tax. Now you might like it or don't like it, I don't care. I personally don't. But for the purpose of today, in our topic of the bank of Canada, I want to put these two things in context. We have something that has been stepped and increasing of nature. And in fact we just had a large increase to the carbon tax which every consumer pays for and that includes businesses are also consumers. So businesses have to consume products and services and hire staff and employees and hire contractors, etc. Which are services to get their, their products to market. Well, some of those businesses are like farmers, these big things, I don't know if you've seen them driving around Calgary, Vern, called tractors, would you believe it that they don't run on hopes and dreams? You know, I grew up on a farm area. When I would get into the tractor, go right around the field and go swathing or something like that. There was no hopes and dreams in the tractor floating around Me, okay, they take diesel, they take some kind of fuel so that they can go in the field and do that work. If you increase the price of that fuel, that increases the price of every farming component of the operation, every aspect of the operation, whether it's a corn farmer, potatoes, wheat, like I don't care what it is. So then that goes to the price of feed. The price of feed goes up for all the cattle, all the sheep, all the livestock, the chickens. Well, if you increase the price of the Feed, then the price of the thing that then gets slaughtered and sold at a grocery store, which is everything that was in your basket, that, that's got to go up. Oh, but before that it even gets to the grocery store. If we increase the fee, we increase the price of the good. Before that good gets to the grocery store, it's got to get on a truck. And it gets on a truck, which coincidentally doesn't run on hopes and dreams. It also runs on some kind of petrol based product, most likely. And so that price went up for the truck to take it from the farmer's land or the butcher shop or the packing plant or whatever, wherever it picked it up and truck it along the way through the entire nation. We have the second largest landmass in the world. It's a huge nation and we have to feed everyone in it. Imagine that. Nobody just wants to go without for too long. I don't know what it is. So we have to get products on a shelf at some grocery store. And if we increase the price of what it takes to get it there, first of all, to get it off the land, to get it to the market, to get it from the market to the grocery store, to get it to the consumer's table, if every single item in that supply chain goes up, we have this thing called inflation. Imagine that. So we have the epic fail of keeping inflation low. Bank of Canada. And then we have the government policy of increase the level of inflation on every good that's shipped and served in the country, in the entire nation, and continue to increase that at a stepped rate on an ongoing basis. We have two fundamental organizations that are at odds with one another. Keep inflation low. Oh, but wait, the bank of Canada can't affect policy. They can only change interest rate policy. So their only way to combat that, their only lever. We talked about, like we have a lever that we can pull over here called interest rates. And the Canadian government has these levers called policies. Well, we insert policies, we turn the lever up on that, and you guys say, oh geez, we have to manage our mandate, but our lever is interest rates. Okay, well we, well we're going to turn the level up on that. So now we have these two competing things impacting every consumer right at their kitchen table. It's totally insane to me, but that's my vantage, my viewpoint of what's happening.

Yeah, I totally agree, Rich. And I guess, you know, the reality of it is, to your point, you know you're entitled to an opinion and maybe other people don't have that opinion, maybe they think they're doing a great job. I have no idea. But the way I look at it is that there's not a lot of accountability. Like, if someone's not doing a good job, like, shouldn't we all. And by we, I mean like the Canadian people. Shouldn't we have like a say in how that job gets done? Or maybe who's conducting the job? Like, the reality of it is we don't actually have any other option. Like, the bank of Canada is not going anywhere. Like, that's how it's going to be, no matter whether you like it or not. The whole key here is do our very best to focus on what we can control. You could choose not to participate. You can actually build your own system where you can have more control over where your money flows to and how you access money. And, you know, one of the most common questions, I get rich. When we talk to people about the process of becoming our own banker, the infinite banking concept, they say, hey, how do these policies do with inflation? Does it keep up with inflation? Well, I don't know. Inflation seems to be pretty cerebral. It seems to be pretty made up. But here's what I know. Every single day that I go back to my system, there's more cash in it today than there was yesterday. And every single year that goes by, the more cash I put into it, the more I get out of it. And my alternative is to take all of my cash and put it into someone else's bank. And the only thing I can get out of it is, is what I put into it. So how's that competing with inflation? Just curious, you know, compared to what is my policy keeping up with inflation? Compared to what? Compared to what you're already doing, I'd say I'm doing a pretty darn good job.

There's one more problem. When you put, if you go put in the other guy's bank, you can get what you put in out. However, you could only get what you put in out based on the rules that they have in place at the time and how much they're willing to let you take at any point in time. So if I go put 30 grand in there and I want to go get my 30 grand out the next day, I could tell you they don't want to give it to me. They're going to make me jump through some hoops to go get my. Oh, well, you know what, how about a wire transfer? Hey, how about. I want a. How about we charge you $18 for this fancy Piece of paper, that's a certified check. And we'll do. We'll certify it and everything's fine, but we're not actually going to give you the money that you just gave us.

How about this one? What do you need the money for?

Yeah, Richard, well, you just gave it. Like, why? What do you want? What do you.

What are you doing?

What do you need the money for? Are you up to something nefarious with your own money?

How dare you? How many stories have you heard from clients, like, sharing that type of a story? Like, hey, what are you talking about? Like, see, here's the thing that the banks don't really want us to know. And in fact, the teller who's talking to you might not actually know this, but when you give that $30,000 to the bank rich that you mentioned that you're talking about, when I go and deposit the $30,000 at the bank, I think I've deposited my money into the bank, and it's still my money. But the reality of it is, it's not actually my money anymore. I unknowingly and unwillingly basically loaned it to the bank, and they owe it back to me. So I unknowingly became a creditor to the bank. So they're going to give it back to me, though, but on their terms. So when I walk in and say, what are you talking about? You give me my money? And what they don't say to you is, oh, sorry, Mr. Canfield, let us clarify. That's not actually your money. It's our money because you gave it to us. But we'll give it back to you when we want to and how we want to. But what they say to you is, oh, no, hold on, let's see if we can work some things out. And da, da, da, da, come back next week. And all this because they don't want you to know what I just shared to you. They don't want you to know that there's a problem. Right? And that's the problem is it's not your money. You gave it to them.

You exchanged custody of the money to someone else, and it became theirs the moment you exchanged custody of it. So if you're on direct deposit, you're on directly loan my money to the bank, please. That's the plan that you're actually on. Oh, can you just please directly loan my money to the bank at their terms. Do you mind? Great. Just have it set up to go right in there and every. Just make sure there's enough for Me to have automatic withdrawals come out of my bank account.

I even have restrictions. Like sometimes I run into problems depending on where I'm at in, you know, my cycle of invoicing and all these other things. Sometimes I have to like figure out and get creative about how to pay a freaking invoice to Ascendant Financial because I have limited limits and restrictions around how much money I can e transfer in a given day or week. And if I hit that limit, it's like I literally have to sit here with money in my bank account and try to figure out how to just pay a bill that I want to deal with because I don't know I'm responsible and I have to wait because the money's sitting there, but I can't move it right.

Which, which, which adds up to time because you have a busy schedule. You're, you know, the next day, the next day you're busy. And then you have to remember to put on a list to log in the next day to use the limit up again the next day. Yeah, it's extremely frustrating. And don't get me wrong, in the, in the big grand scheme of things, I have, I have been lucky enough to not have to go into a physical brick and mortar bank very frequently. In the last, say, five years, I could probably count on one hand the amount of times I've had to do that. So I'm very grateful for that in the services that we have and are provided. Don't get me wrong, however, the fact that certain things I have to go in and see a bank for when I, when I can do everything else on my own is a little bit weird and strange. You know, exactly to your point, if I want to make transfers, even just from my. I have my accounts at one institution and I have two corporations with accounts at that institution. I want to move money from this corp. To that corp. I have a limit. I can call in, sit on a stupid automated, verify my voice phone line that supposedly is going to get me right to a human being, but never ever does type situation just so that I can ask them and then they, I can get them to move it, but I can't move it myself. So why do I got to call you to get you to move it when you could just let me do it myself? What's the problem here? Why, why are we wasting this person's time and my time to call in and do the thing that I'm perfectly capable of doing? Because you've already built a system that allows it to happen. If I can move 10,000, why can't I move 30,000?

It's almost like it's designed to just be frustrating. It's kind of like when we talk to clients about setting up a policy system. You know, it's not just the numbers. The numbers are the thing that matter the least. What about control? What about ownership? What about privacy? What about, oh, I don't know, responsiveness? Like, you call them and somebody actually picks up the phone. Like, those things are pretty darn important. And so when I access policy loans electronically now, thanks to Ascendant Financial, when I access policy loans electronically, they don't ask me a whole lot of questions. They ask me two questions. One is do I want to check? And the other is do I want a direct deposit? They don't ask me what I want the money for. They don't ask me what I'm going to pay it back. They don't ask me. No, because I have control and I have ownership and they actually work for me. I just sleep well at night knowing.

That it's nice and easy. Sleeping well at night. Hey, if you want to sleep well at night, a really good way to do that is to get some education. In fact, you can go to watchibc.com, load up on some of that high quality education so you can get better sleeps at night. That's little advice I would provide. But beyond that, I would have to say, Vern, everything that we've talked about today, there's a lot more good stuff that we talk about. In fact, you can see some of that. All you got to do is look at that video boom, right there, that just popped up. Go ahead and click on it. Get some more of that good education. Right idea. Feed it right into your brain. Just get it hooked up and just go boom. Click that link. Rock and roll.