Saturday, December 06, 2008

I may have to give back my capitalist decoder ring

Today the Toronto Star is reporting almost 71,000 jobs were lost for the month of November in Canada.

So let’s go back a little in time. On October 11, 2008, the Federal government shores up the banking industry with a bail out package via this Globe and Mail report:
After approving a $25 billion package to help Canada's big banks through the global credit crunch, Prime Minister Stephen Harper predicted yesterday at least another year of economic "slowness."
I am conflicted on this issue, but no one asked me, so the banks get propped up via the public purse under the rational of it is all for the good of the country.

On November 12th, the Toronto Star reports the Royal Bank of Canada has decided to lay-off 280 ‘back-office jobs” Canadians were doing in order to lower costs by outsourcing those same jobs to India.

Normally, I would argue that any corporation has the right to make any decisions for the good of its bottom-line, but if Canadian government is going to prop up the banks via the public purse and do so for the benefit of the country - shouldn’t the Royal Bank show a little loyalty by keeping those same jobs within the very country which is helping prop up their bottom-line? I don’t think a little back-scratching via the Royal Bank is too much to ask given the current economic circumstances.

On November 24th, the Toronto Star reports the Royal Bank’s bottom-line 4th quarter profit drops to only $1.1 Billion.

While 4th quarter profits are down 15% for RBC and no one enjoys seeing their bottom-line edge downward, RBC is still making a very healthy return. I fail to see how keeping those 280 Canadians employed within their company within Canada would unduly harm their bottom line financials.

Generally, I have always argued for free trade between free parties although the one concern which has always given me pause with the onset of the globalization is how often trading occurs between unequal partners. And if corporations and companies are going to increasingly come to the federal government looking for hand-outs, hand-ups, and or tax relief/credits; does not the government have not only the right but moral obligation to attach or demand strings be attached to the acceptance of the public purse’s assistance? A little Canada first fiscal policy might well be in order.

One small note. I am not a Royal Bank employee or shareholder. I am personally unaffected by staffing cuts/outsourcing. While I have used the Royal Bank to illustrate my point, I don’t have a personal grudge against RBC. I choose RBC as the most timely and easily accessible example of what I perceive as an inherent weakness within our system.


Candace said...

I think you make a damn good point - similar to the Obama argument of why give tax cuts to companies outsourcing jobs to other countries?

This makes no sense and good catch on calling them on it.

I'd email your MP and the (still) current PM if I were you.

Kateland, aka TZH said...

Do I hate to admit this or what but my (big ahhhh - major throat clearing) my MP is.....Bob Rae. You have no idea how embarassing it is to admit this.