The untold story of how elements of the first Conservative budget in 2006 encouraged the entry into Canada of such big U.S. players as AIG, creating our version of subprime mortgages

New mortgage borrowers signed up for an estimated $56-billion of risky 40-year mortgages, more than half of the total new mortgages approved by banks, trust companies and other lenders during that time, according to banking and insurance sources. Those sources estimated that 10 per cent of the mortgages, worth about $10-billion, were taken out with no money down.

The mushrooming of a Canadian version of subprime mortgages has gone largely unnoticed. The Conservative government finally banned the practice last summer, after repeated warnings from frustrated senior officials and bankers that the country's financial system was being exposed to far too much risk as the housing market weakened.

Just yesterday, Finance Minister Jim Flaherty repeated the mantra that the government acted early to get rid of risky mortgages. What he and Prime Minister Stephen Harper do not explain, however, is that the expansion of zero-down, 40-year mortgages began with measures contained in the first Conservative budget in May of 2006.

Canadian Parliament suspended?

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There will be essentially no spending limits for this election, since the bulk of it will take place before the writ is dropped in the final few days of January, after the Harper government is defeated on its budget. This, of course, is of immense benefit to the Conservatives, who are sitting on a pile of cash, while the election-weary Coalition forces are bereft of money.

Furthermore, a ton of money to be spent on this campaign will be coming from you, the taxpayers. That’s because the Conservatives are still government until defeated on January 29th or 30th, and will be using ministerial budgets, free MP travel, householders, ten percenters and every other resource to wage war on the Coalition. These things, as you might imagine, are a huge advantage to the governing party.