Angry in the Great White North

Note that I was beaten to the punch with this analysis at A Step to the Right.

Jack Layton wants to eliminate bank fees charged for using Automated Teller Machines:

The New Democrats said Canadians used bank-owned ATMs to make more than 1.1 billion withdrawals and other transactions in 2005 and paid C$420 million ($355 million) in fees. It said U.S. and British banks do not charge for these services.

“Fees for basic services represent only 5 percent of revenues of the big six Canadian banks — hardly critical to the bottom line,” said New Democratic Party leader Jack Layton. ”It’s working families that are hurt most by these outrageous fees.”

He makes a good point. But I'm curious about how math works in the socialist mind. You see, $420 million sounds like a lot of money. But in Canada, there are 33 million people. Approximately 86% of them have bank cards, according to the Interac Association. That means just over 28 million Canadians will see those savings. That comes out to about $15 per year per Canadian using an ATM card. Less a buck and a quarter each month.

Gee, thanks Jack.

Jack Layton thinks he ought to be congratulated for buying me a Tim's coffee each month. On the other hand, fellow New Democrat Olivia Chow (and Jack Layton's wife) claims the Conservatives are shortchanging Canadians with their Universal Child Care Tax Benefit:

“New Democrats are not going to turn our backs on child care – it is not a done deal, just because the [Conservative] government has proceeded with its bogus $1200 [annual] allowance,” added Chow.

So $100 a month to every Canadian, regardless of income, is bogus and does nothing to help "working families". But Jack wants to give each of those working families enough to buy a cup of coffee each month, and calls himself the working class hero.

Yeah, math isn't a strong point for the left. Too much logic and accountability and realism and all that stuff.

It should be said that Conservative Finance Minister Jim Flaherty has asked the banks to justify the charging of these fees given that banks in other countries provide that service for free. It will be interesting to hear what the banks have to say, but the fact is that the only real answer is that with the lack of competition in the banking industry in Canada, no bank feels the need to eliminate the fees to attract customers, and so cause all the banks to follow suit. Since there are only 5 major banks, Canadians are not likely to see the day when one bank bolts and eliminates the fees. The banks are comfortable just where they are.

Jack Layton wants to give each of us a buck a month by adding more regulation to the banking industry and forcing the fees to go away (regulations that would have to drafted, adopted, and enforced, costing us all more in taxes, further eroding that pitiful savings). I hope Jim Flaherty takes a different approach and opens the banking sector to serious competition. Not only would the fees disappear on their own, a lot of other improvements and efficiencies would follow, allowing the banks to offer better services, pay more interest on savings, and expand and so hire more staff. I bet that would amount to a lot more than a buck a month.