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Does Canada really need a digital loonie?

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The Bank of Canada is wading into the fraught and controversial world of digital currencies, launching public consultations this week into how Canadians might use a digital dollar.

“We’ve been researching a digital dollar for quite a while now,” said Carolyn Rogers, the senior deputy governor of the central bank. “And we’re at a point where we need help from Canadians, we need to understand what Canadians want.”

And yet, the bank maintains there is neither a need nor plan to launch a digital loonie.

So, why bother with the public consultations at all?

Rogers says more transactions are being done digitally. Only about 20 per cent of retail transactions are done in cash. And, she says, there’s been a surge in interest in various digital currencies.

When most people think of a digital dollar, they first think of cryptocurrencies like bitcoin or Ethereum. What the bank is looking at is not quite crypto, but it’s not quite what we generally think of as cash either.

“The bottom line is a digital dollar [that’s] backed by the Bank of Canada,” Rogers told CBC News.

 

Does Canada really need a digital loonie?

 

The Bank of Canada launched public consultations this week asking Canadians what they think of a central bank digital currency. The central bank’s senior deputy governor Carolyn Rogers sat down with the CBC’s Peter Armstrong to talk about what a digital dollar would actually look like.

Such so-called central bank digital currencies have gained traction around the world. Dozens of central banks are researching or launching public consultations.

In a statement when its public consultations began, the Bank of Canada reiterated that any decision to create a digital currency would be made by politicians not central bankers.

“At this time, a digital Canadian dollar is not needed. And any decision to issue one rests with Parliament and the Government of Canada,” wrote the bank in a statement.

But if Parliament decided it wants a digital currency, the bank would be responsible for issuing one. Rogers says, in that case, policy makers should make sure a safe and reliable currency is made available.

A Canadian flag hangs from a building.
The Bank of Canada says any decision to create a digital currency would be made by politicians, not central bankers. (Sean Kilpatrick/The Canadian Press)

“If Canadians wanted a digital form of currency, and they didn’t have one available from the Bank of Canada, they might start to use some of those private currencies,” like bitcoin. Those currencies sometimes face wild fluctuations, among other complications. 

“So we want to make sure that they have an alternative that is as secure as the cash in their wallet. But digital,” Rogers told CBC News.

But the announcement is being met with a certain level of skepticism.

Some critics say central bank digital currencies are a way for big government to have yet more control over the financial lives of citizens. Others say they simply don’t see a need for a digital currency.

“It seems like this is a solution looking in vain for a problem to solve,” said Karl Schamotta, chief market strategist at the financial payments company Corpay.

His company’s entire business model revolves around finding ways for businesses to pay for purchases in as quick and efficient a manner as possible. And yet, Schamotta doesn’t see a role for a digital loonie.

A man in a suit gestures while speaking, flanked on both sides by Canadian flags.
Conservative Leader Pierre Poilievre has railed against the idea of a central bank-backed digital currency. (Sean Kilpatrick/The Canadian Press)

“In Canada we already have near-instant payments between people within the country. We have a very, very small unbanked population. What benefits would central bank digital currencies offer in terms of reducing payment system frictions?” he asks.

The entire idea has become something of a touchstone for conservative politicians who say they’re worried about government overreach.

Opposition leader Pierre Poilievre has spoken in favour of cryptocurrencies as a way to “opt-out of inflation.”

But he got a roaring ovation when he railed against the very idea of a central bank-backed digital currency at a recent rally in Woodstock, Ont.

“As long as I am prime minister, there will be no digital ID forced on people, no central bank digital currency,” said Poilievre to huge cheers.

In Florida this week, Republican Gov. Ron DeSantis announced legislation that would ban the use of any central bank digital currency as money, saying efforts in that direction by the White House are “about surveillance and control.”

“Today’s announcement will protect Florida consumers and businesses from the reckless adoption of a ‘centralized digital dollar’ which will stifle innovation and promote government-sanctioned surveillance,” DeSantis said in a statement.

The Bank of Canada says it’s simply trying to make sure the financial system works in a way that helps Canadians. Rogers says if some future government eventually decided to push ahead with the idea, it’s not like cash would suddenly disappear.

“It’s an alternative to the cash in my wallet,” said Rogers. “I can still have the cash in my wallet, we have no plan to get rid of cash. So this isn’t an exercise in replacing anything.”

But in terms of making financial transactions easier or less costly, Schamotta says the central bank is looking in the wrong direction. He says domestic payments, for the most part, work fine.

If there is a problem, he says, it lies with international payments.

He gives the example of someone in Canada trying to send money home to, say, the Philippines.

Each transaction “goes through a whole lot of hoops and steps and intermediaries, as it moves,” he said.

He says those costs add up and make a material dent in global GDP.

“The share of money being subtracted through the banking system as it moves across borders is horrible and the poorest people in the world pay a huge burden for doing this.”

Schamotta says he wishes more policy makers were looking at ways of reducing friction in those kinds of payments instead of seeking out a role for a digital loonie at home.

The Bank of Canada’s public consultation on a digital currency opened this week. It runs until June 19.

 

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U.S. President Joe Biden steps aside as Democratic candidate, ending re-election bid

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WASHINGTON – U.S. President Joe Biden is removing his name as the Democratic candidate in the November election following weeks of mounting pressure over the 81-year-old’s mental acuity and ability to win the faceoff with Republican rival Donald Trump.

Biden says it has been his greatest honour to serve but he believes it is in the best interest of his party to stand down and focus solely on fulfilling his duties as president for the rest of his term.

Growing numbers of Democrats were urging Biden to drop out following a disastrous debate performance against Trump and multiple missteps on the world stage during the recent NATO leaders’ summit in Washington.

Biden told supporters Friday he was ready to get back on the road this week after recovering from COVID-19, which he contracted during a critical time for his campaign.

Biden criticized Trump’s acceptance speech at last week’s Republican National Convention, saying it presented a dark vision for the future, and indicated he would forge ahead with his own campaign.

But he issued a social media post on Sunday afternoon saying he would not be running, adding he will speak to the nation and provide more detail later this week.

This report by The Canadian Press was first published July 21, 2024.

The Canadian Press. All rights reserved.



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Joy in Newfoundland after ‘Lucky 7’ fishers survive harrowing days lost at sea

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NEW-WES-VALLEY, N.L. – There was a powerful word being repeated in the joyful Newfoundland community of New-Wes-Valley on Sunday: “Miracle.”

Over and over, residents out walking or chatting to one another in local stores said the fact that seven fishermen from the area had somehow survived roughly 48 hours in a life raft in the middle of the Atlantic ocean and were found by search and rescue crews was nothing short of miraculous.

“It’s once in a lifetime you’ll see something like this, when all the people survive,” said Frank Granter, who worked for the Canadian Coast Guard for 35 years. He was out walking through the sunny, seaside community on Sunday afternoon, stopping to talk to neighbours about the rescue ahead of an evening parade to celebrate the men’s survival.

Daphne Crocker leaned over her balcony and spread out her hands. “What a mighty God we serve,” she said about the fishermen coming home.

Granter agreed it was a miracle the Lucky 7 returned. “But October, November, it would have been a different story,” he said.

The Elite Navigator fishing boat and its crew seemed to vanish on Wednesday night. The craft was reported missing on Thursday after transmitting its final signal at around 8:30 p.m. the night before, the Canadian Coast Guard said. The vessel had caught fire and sank, forcing the crew to hastily disembark and wait for rescue on the life raft.

A massive search soon followed, involving four coast guard ships, a Cormorant helicopter, a Hercules aircraft and many local fishing vessels.

In New-Wes-Valley, which is an amalgamation of three small fishing communities along Newfoundland’s northeast coast, people braced for the worst. Fishing is among Canada’s deadliest professions, and tragedy is a common thread linking people in fishing communities across Atlantic Canada.

But on Friday night, out on the Atlantic ocean, searchers saw a light from a flare. It brought them to a life raft, where the seven fishermen — the Lucky 7 — were waiting.

Fisher Toby Peddle was among them. He said he was terrified as he jumped off the sinking fishing boat as it was pulled down into the depths. He can’t swim, he said, and he didn’t have a survival suit on.

“It was either jump and risk drowning or stay and be burned,” he said in an interview Sunday. “There was no time to think about it. I just knew I had to jump.”

He said the captain and another crew member, Jordan Lee King, had made a plan to reach him as soon as they hit the water.

“Jordan had said, ‘Don’t worry, I’ll catch you before you even get in the water,’” recalled Peddle.

Sure enough, when Peddle jumped, King kept him afloat and quickly brought him to the raft, the fisherman said.

“I was relieved I made it to the raft. I couldn’t swim a stroke to save my life,” he said.

Peddle praised the actions of the captain.

“He did the best job he could have possibly done. He kept everyone calm in the life raft for over 48 hours. He’s a hero.”

“He just kept telling us, ‘We’re going to be fine. They know where we are, they’ll find us,’” he added.

He said it was very hard hearing the sound of helicopters flying overhead and realizing pilots were unable to see the life raft through fog. It was “the worst feeling of all,” he said.

They fired the final smoke flare in the boat at dusk on Friday, and it was spotted by the coast guard, he said. When he saw a helicopter flying overhead, “it was a moment of relief.”

At the wharf in New-Wes-Valley on Sunday afternoon, Peter Barfoot’s phone was pinging relentlessly in his pocket. He is good friends with David Tiller, one of the rescued fishermen, and he’d just launched a fundraising campaign to buy Tiller a new guitar.

The instrument went down with the Elite Navigator and Barfoot said it was “a no-brainer” to mount an effort to buy him a new one. He’d raised about $1,600 by Sunday afternoon.

“They’re heroes,” Barfoot said, shaking his head in disbelief. “How often do you hear this? It was a dire situation that turned into what it is now … They’re alive. They got a second chance at their life.”

This report by The Canadian Press was first published July 20, 2024.

— With files from Michael Tutton in Halifax

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Second B.C. university issues trespass notice to pro-Palestinian protesters

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VICTORIA – The University of Victoria in British Columbia says it has begun the process of removing the pro-Palestinian encampment on campus, telling protesters they are trespassing on school property.

The school says in its latest encampment update that it has “taken a calm, measured and reasoned approach” to the protest since it was set up on May 1, but administrators “see no further prospect for a successful dialogue.”

On its social media page, protesters naming themselves “People’s Park UVIC” confirm the school has issued them a trespass notice, adding the administration has told them to “vacate by 8 a.m. Monday.”

The group did not specify their plans while asking the public to “stay tuned for updates from camp and plans going forward.”

Protesters at the university have been demanding the school cut financial and academic ties with Israeli entities due to the ongoing Israel-Hamas war, and the latest development comes about a week after Vancouver Island University in Nanaimo, B.C. launched legal action against protesters there for allegedly ignoring a deadline to leave their camp.

Vancouver Island University says it had issued its trespass notice to protesters on July 11.

University of Victoria says in its update that the school had been working toward “a peaceful conclusion of the encampment” since June through facilitated discussions with protesters.

“Unfortunately, we have not successfully achieved agreement on the process and timeline for decampment,” the school update says. ”The university was disappointed to learn of this impasse through social media posts from People’s Park UVic.”

The protest group says on its social media page that protesters “have negotiated in good faith” but described the school’s last proposed resolution as having “no concrete commitments” and containing “ineffective policy” that fails to address what they are calling a genocide in the Israel-Hamas conflict.

The group also reposted a statement from July 19, saying it is “unfortunately no surprise to once again witness our administration betraying the integrity of this process and emphasizing that these negotiations have been and always will be on their terms.”

A camp at the University of British Columbia was vacated by protesters voluntarily on July 7.

The recent developments come after an Ontario court granted the University of Toronto an injunction on July 2 that ordered protesters there to dismantle their encampment on the grounds that it is a violation of the school’s property rights.

Legal experts have said the decision sets a powerful precedent and creates a road map for other schools to follow in seeking legal recourse in removing protest encampments on campus.

This report by The Canadian Press was first published July 21, 2024.

The Canadian Press. All rights reserved.

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