When Finance Minister Jim Flaherty got directly involved in the banks and their mortgage rates last month, Canadians were very critical of the move. We may have even made a few comments about it on this blog. But with all the heat he’s taken, TD CEO has now stepped up to the Finance Minister’s defense. And while he doesn’t come right out and say that Flaherty was right to make a move, he does say that he can at least understand the thinking behind it.
First, a brief recap.
When BMO cut their mortgage rates to rock-bottom rates again in March, there was concern that the banks would once again be starting up the mortgage wars. When it seemed clear that was not going to happen, and the other institutions were not going to take part, Flaherty praised the other banks for not making any sudden movement. That was enough to have people questioning the Minister’s moves.
Then though, Manulife matched BMO’s offer, and that seemed to have set the Minister over the edge, as he had a representative from his office call that lender to “express his displeasure.” That was too much for Canadians, and it had everyone from private individuals to NDP Leader Thomas Mulcair saying that the move bordered on being anti-competitive. It was even enough to start a shouting match in the House of Commons – a time when another Conservative MP also disagreed with Flaherty’s moves.
But, that was weeks ago. Things have calmed down, they’re now arguing about different things in the House, and the ad campaigns against the Finance Minister have stopped. And now, TD CEO Ed Clark is even supporting Flaherty, and saying that we have to understand his thinking behind the move.
“I think we understand his concern, we’ve been an advocate all along for the need to keep household debt under control,” says Mr. Clark during a shareholder meeting in Ottawa last Thursday.
“The short and long of it is, we understand why he’s doing it, we’ve been concerned about household debt, we continue to be. And I think he’s just trying to highlight the issue.”
Well if that was the Finance Minister’s goal, most Canadians would agree that his mission was accomplished. Even if he did wind up the subject of some jokes because of it. The question still remains though, will he react the same way if and when another bank lowers their rates to rock-bottom lows?
