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Canadian banks took billions of dollars in support from central banks and government bodies at the height of the financial crisis, according to a recent report from the Canadian Centre for Policy Alternatives.
The report says Canada's largest banks received $114 billion in cash and loans from the U.S. Federal Reserve, the Bank of Canada and the Canada Mortgage and Housing Corporation (CMHC). The report calls the funds a "secret" bailout for the country's financial sector.
The report also says three banks -- CIBC, BMO, and Scotiabank -- were "completely under water", with government support exceeding the market value of the company.
The Canadian Centre for Policy Alternatives, a left-leaning think tank, says the findings contradict repeated claims that Canadian banks did not require a bailout.
"We're getting a sense that this was much more of a problem then we were led to believe," David MacDonald, economist and author of the report, tells BNN.
The report also says that during the time of government support -- from the fourth quarter of 2008 through the second quarter of 2010 -- the banks reported $27 billion in profit and only two banks experienced a single quarter of losses.
The Finance Minister's office contradicts the report and says there was no "secret" bailout.
"This was financing extended to Canadian banks, not subsidies, so they could provide credit to businesses and consumers during the worst global financial crisis since the Depression," Chisholm Pothier, a spokesperson, tells BNN. "Not only did these measures play an important role in supporting Canadian business during the credit crunch, they also made money for Canadian taxpayers."
The Finance Minister's office says the program by CMHC to purchase $69 billion in mortgages from Canadian banks will earn the government $2.5 billion in net revenue.
But MacDonald says the government may simply be sugar-coating its bailout by calling it liquidity support.
"The figures themselves are not being challenged, it's merely the interpretation that's being challenged, so I leave it up to Canadians to decide whether liquidity support becomes a bailout at 100, 200 or 300 percent of market cap," he says.
"What it starts to do is give us a flavour of what was happening during the financial crisis."