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Finance

CUPE sues Premier Kathleen Wynne's Ontario government over Hydro One sale

Premier Kathleen Wynne and several Ontario Liberal cabinet ministers are being sued over their controversial sale of Hydro One.

The Canadian Union of Public Employees (CUPE) announced Wednesday it has launched the lawsuit in a bid to halt the sale of a piece of the province's electricity distributor. In addition to Wynne, Finance Minister Charles Sousa and Energy Minister Glenn Thibeault.

The union alleges "misfeasance in public office over the sale of shares in Hydro One."

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The Bail-In: Or How you Could Lose Your Money in the Bank

Buried in the Liberal Federal Budget that was introduced on March 22, 2016, under Chapter 8 - Tax Fairness and a Strong Financial Sector, was a section titled "Introducing a Bank Recapitalization 'Bail-in' Regime." Simply stated, in the unlikely event of a large bank failure, the Government proposed it would reinforce that bank shareholders and creditors are responsible for the bank's risks - not taxpayers.

What that means is that shareholders, bondholders and depositors, rather than taxpayers, are responsible for the bank's risks in the event of a failure. During the 2008 global financial crash, banks that were deemed "too-big-to-fail" were bailed out by the government, meaning the taxpayer footed the bill. None of the banks were Canadian banks, but it does need to be noted that Canadian banks received some $114 billion from Canada's federal government. This was against the background of Canadian banks being declared "the most sound banking system in the world." At the time, the government denied there was any bailout, preferring to use the term "liquidity support." To put the amount in perspective, $114 billion is roughly 7% of Canada's GDP.

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Canada Housing Market Is 63% Overvalued: Deutsche Bank

Canada, Australia and New Zealand are in the top ranks of the developed world's most overpriced housing markets, according to Deutsche Bank AG. Homes in Canada are the most expensive, being 63 percent overvalued, the bank said in a survey ranking Organization for Economic Co-operation and Development countries' markets. The measure reaches 56 percent in New Zealand, the second-most priciest, 53 percent in Belgium and 49 percent in Australia.

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Will Ireland Be First Country In World To See Bail-in Regime?

Deposit bail-in risks are slowly being realised in Ireland, after it emerged overnight that FBD, one of Ireland's largest insurance companies, have been moving cash out of Irish bank deposits and into bonds. Revelations regarding deposit bail-in risks came in the wake of warnings of a new property crash centred on the housing market in Ireland. The former deputy governor of the Central Bank warned in an op-ed in a leading international financial publication, Project Syndicate, that Ireland is at risk of another housing market crash.

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Rating agency DBRS keeps negative outlook on big Canadian banks as Ottawa moves ahead on 'bail-in' regime

With the Canadian government moving forward with plans for a "bail in" regime that would keep taxpayers off the hook in the event of a bank collapse, ratings agency DBRS is maintaining its "negative" outlook on the country's largest banks. There is not yet enough information yet about how a bail-in would work to change the banks' ratings to reflect the reduced government support, DBRS said in a report published Friday.


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