Open letter to Mark Carney dated June 11 2013
Dear Mr. Carney:
There’s been a fair bit of ongoing analysis and controversy surrounding the remarks you made some months ago about Corporate Canada sitting on huge piles of “dead money” on their balance sheets that could be better utilized to feed the economy or failing that; returned to investors.
Estimates vary but it seems that the total balance of ‘dead money’ has increased as much as 40% since 2009; and may total as much as $526 Billion… and that has you concerned.
That is indeed a lot of cash. No question there.
But, as you head out on your new adventure and leave the Bank of Canada, I think it’s only fair to point out that corporations are not alone in holding onto ‘dead money’ that could be better utilized to grow the economy.
I am a bit embarrassed to point out that our own highly respected Bank of Canada which you have so masterfully governed for the past 5 years, is itself currently sitting on $500Million in unclaimed funds which I think we could agree may also be described as “dead money” and money that could be much better utilized to feed the economy….if not the actual owners. That might be possible, if only the Bank of Canada took a more proactive approach to finding those owners.
Indeed, the rise in the balance of unclaimed funds in the Bank of Canada certainly appears to rival the rise in ‘dead money’ in Corporations with an increase of 55% over the past 5 years (!) That’s an extraordinary increase on an extraordinary balance of ‘dead money’ given that the this balance of $500M only includes amounts turned over by federally (not provincially) regulated banks, and only after 10 years of inactivity and only where those accounts are held in Canadian dollars (no foreign $ amounts).
Alas, despite this extraordinary increase on an extraordinary balance on a population of only some 34M Canadians, very little awareness and very little effort seems to be being made in trying to locate owners. Granted, the Bank of Canada does update this balance once a year and provides an online database for unclaimed funds; whereas, the same treatment is not afforded to the balance of Unclaimed/Matured Canada Savings Bonds which are also piling up at the BoC.
It is not a published number but I understand the value of Unclaimed/Matured Canada Savings Bonds totaled $259M as of this past April which I believe would make that an increase of $147M or 231% or over the past 5 years.
Extraordinary and Sad at the same time.
So, using the same argument you have made for ‘dead money’ in Corporate Canada…for the sake of the economy AND in this case, for the sake of Canadians generally, don’t you think we could put a little more effort into reuniting this money with owners?
This is after all, the age of technology so one would think we could apply a little technology to finding owners and making things right. But as well, if some inspiration is needed into this challenge, we can also look south for some good ideas given that the US has had consistent & comprehensive unclaimed property legislation in place for 50+ years. In the US, unlike the situation in Canada, unclaimed property legislation is an important part of consumer protection legislation. Sadly, that’s not the case in Canada; but it should be. Each state in the US has enacted unclaimed property legislation requiring the transfer of all unclaimed property to that State who then takes a very proactive role in helping to return assets to owners.
So before you go…perhaps you and Mr. Poloz could give the ‘dead money’ in the Bank of Canada some thought.