🇨🇦 Credit Union CEO Warns New ‘Loonie-Dollar’ Policy Could Undermine Canadian Dollar and Sovereignty
This is a Mark Carney Financial Policy Brainchild...
⭐ Source: Jason Lavigne - More Information on This Article on his X Thread HERE
Calgary, AB (March 19, 2025) – Brett Oland, CEO of Bow Valley Credit Union, is raising the alarm over new financial policies introduced by the Mark Carney government in Canada. In a letter to provincial leaders titled “Battle for the Soul of Alberta”, Oland warns that adopting a so-called “Loonie-dollar System” – a framework for issuing debt in U.S. dollars – could destabilize Canada’s financial sector and erode the country’s economic sovereignty. He urges immediate attention to the policy’s potential to drive up inflation, weaken the Canadian dollar, and impinge on provincial autonomy, all while comparing the strategy to the controversial Eurodollar system that operates outside U.S. regulations.
New ‘Loonie-Dollar System’ Sparks Concern
Oland’s letter outlines the “Loonie-dollar System,” a term he uses to describe the government’s latest financial experiment. Under this system, Canada’s federal government is issuing debt denominated in U.S. dollars rather than in Canadian dollars as a core policy move. Just days after Mark Carney assumed leadership, the government announced plans to launch a U.S.-dollar global bond – a step that was executed on March 11 with a US$3.5 billion, five-year bond issuance. The Department of Finance said the proceeds will “supplement and diversify Canada’s liquid foreign reserves,” helping maintain a buffer and orderly conditions for the Canadian dollar in forex markets.
According to Oland, however, this move is a routine reserve management tactic and part of a broader strategy to create a parallel to the Eurodollar system on Canadian soil. The Eurodollar market refers to the vast pool of U.S. dollars held in banks outside the United States (often in Europe) and beyond U.S. regulatory control. Trillions of such “Eurodollars” circulate offshore, facilitating global trade and lending, but “these deposits are not subject to U.S. banking regulations or control,” Oland notes. By tapping into U.S.-dollar funding through Canada – what he dubs the Loonie-dollar System – the Carney government is effectively mimicking the Eurodollar model within the Canadian context.
Mark Carney’s role is central to Oland’s critique. The former central banker and now head of government is described as accelerating a plan that allows foreign players, notably in Europe, to influence North American currency flows via Canada. Oland alleges European financial interests are leveraging Canada to regain control over U.S. dollar pricing under Carney’s watch. He points out that the U.S. Federal Reserve’s recent actions (such as replacing LIBOR with SOFR benchmark rates) aimed to reassert American control over its currency costs, which the Eurodollar market had partly influenced. In Oland’s view, the new Canadian policy undermines those gains by creating an offshore U.S.-dollar hub in Canada, potentially “tak[ing] over controlling the price of USD” in a way that could undermine the U.S. financially.
The Currency and Inflation Risks
Oland and other critics say the economic risks of the Loonie-dollar scheme are significant, particularly for Canada’s currency stability. He argues that channelling large volumes of U.S. dollars through Canada’s much smaller monetary base will put extreme pressure on the value of the Canadian dollar (nicknamed the “loonie”). In his letter, Oland cautions that Canada’s financial market is far more limited than the Eurozone’s, so attempting to absorb “trillions of Euro-dollars” through the Canadian system could devalue the loonie rapidly. “All those trillions of Euro-dollars now need to go through the eye of [the] needle of the Canadian Dollar,” he writes, suggesting the loonie’s value could be “destroyed…much faster” under this scheme than a similar effort in Europe would harm the euro.
A primary concern is inflation at home. Because the Canadian economy and money supply are small relative to the enormous scale of offshore U.S. dollars, trying to manage or influence the USD’s price via the loonie would likely require an outsize expansion of Canada’s money supply. Oland warns this approach will be “massively inflationary,” as Ottawa might be compelled to “print” excessive amounts of Canadian currency to maintain the scheme. Such expansionary policy, he notes, would erode Canadians’ purchasing power and drive up prices domestically. Another aspect is the interest rate policy: Oland points out that Canadian interest rates have recently ticked downward, and he interprets this as a deliberate step to facilitate the Loonie-dollar plan. By pushing rates toward the zero lower bound, foreign entities could cheaply borrow Canadian dollars and use those funds to buy Canada’s new U.S.-dollar bonds. This would effectively funnel liquidity into the Loonie-dollar system. However, “moving interest rates too low is massively inflationary to Canadians but not to foreign countries,” Oland writes, emphasizing that ordinary Canadians would bear the cost of the resulting inflation while foreign borrowers reap benefits.
Economic observers note that offshore dollar systems can carry stability risks. The Eurodollar market’s light regulation helped it grow, but it also “introduced risks (e.g., during the 2008 financial crisis)” when unchecked dollar creation contributed to global financial turmoil. By analogy, a Canada-centric USD system could likewise become a source of volatility. If the loonie sharply devalues or inflation spikes, Canada’s economic stability and creditworthiness could be threatened, potentially forcing harsh measures to regain control. For everyday Canadians, that scenario would mean a higher cost of living, erosion of savings, and possible stress on jobs and investments if the economy destabilizes. Oland’s warning underscores that a policy he views as aimed at global currency maneuvering has real-world implications for Canadian citizens, who could feel the fallout in grocery prices, loan payments, and the value of the dollars in their bank accounts.
Banking Sector and Credit Union Implications
The financial sector’s reaction is another focal point of Oland’s letter. He suggests that Canada’s major banks quietly align with the Carney government’s plan. These large institutions – often called the “Big Five” banks – dominate Canadian banking and are tightly overseen by federal regulators. Oland describes them as a “monopolistic oligopoly” closely aligned with Ottawa’s agenda, noting their significant foreign ownership and federal oversight. In his view, the big banks have little incentive to push back on a federal strategy even if it carries risks, and thus “will not stand up to Carney on this.” This compliance means there may be no internal banking opposition to check the Loonie-dollar policy, leaving any critique to outsiders and smaller players.
For credit unions and smaller lenders, the stakes are different. Oland’s outspoken warning is unusual in Canada’s banking landscape – it’s rare for a financial executive to challenge government monetary or fiscal policy publicly. As the head of a regional credit union, he appears to voice concerns that may be shared by other community-based institutions worried about being sidelined or exposed by these sweeping changes. Credit unions typically serve local members and don’t have the global reach or cushioning of big banks, making them more vulnerable to sudden inflation or currency value shifts. A spike in inflation could squeeze household finances and loan repayment rates, directly affecting credit union balance sheets. Moreover, creating a sizeable USD-denominated liability (Canada’s new foreign debt) raises questions about regulatory oversight: it introduces complexities that Canada’s banking regulators, like the Office of the Superintendent of Financial Institutions (OSFI), must closely monitor. Oland’s letter implies a gap in trust here – he doubts the current oversight framework or the big banks will do much to restrain the Loonie-dollar experiment, given their coordination with the government. This leaves institutions like his and their members anxious about potential fallout. In sum, the concern from the credit union perspective is that local financial stability could be at risk if the national policy misfires and someone needs to speak up before Canadians’ deposits and livelihoods are put in jeopardy.
Provincial Sovereignty and Alberta’s Stake
A significant theme in Oland’s letter is the threat he perceives to provincial sovereignty, with Alberta at the epicentre. Alberta’s economy – particularly its oil and gas sector – generates a significant trade surplus in U.S. dollars for Canada. Oland warns that this surplus is the linchpin of the Loonie-dollar System’s viability and thus could become a target in an international backlash. He speculates that the United States “will NOT let control over the price of the USD slip away” again after having regained some control in recent years. If Washington perceives Canada’s actions as challenging U.S. dollar primacy, Oland argues, it could retaliate with aggressive economic measures. In one scenario, he suggests a U.S. administration (such as one led by President Donald Trump, whom he references) might respond by imposing steep tariffs or trade barriers to eliminate the American trade deficit with Canada. Since Canadian oil exports are the single most significant contributor to Canada’s trade surplus with the U.S., those exports would likely be the prime target. “Oil is the single biggest line item causing the trade imbalance,” Oland notes, and each tariff “eats into the trade surplus, reducing the effectiveness of the Loonie-dollar System.” By choking off Canada’s U.S. dollar earnings, the U.S. could make it “impossible for Canada to service” its new U.S.-denominated debts, undercutting the whole scheme. In a worst-case projection, Oland even suggests the U.S. might go so far as to “collapse the oil industry in Alberta and Canada” by shutting out Canadian oil if that’s what it takes to preserve American control over its currency. Such an outcome would be economically devastating for Alberta – a province heavily reliant on energy revenues – and represent an extreme deterioration in Canada-U.S. relations.
Given these risks, Oland urges Alberta’s leaders to take defensive action to protect the province’s interests. One proposal he puts forward is for Alberta to redirect or shield its oil revenues from the Loonie-dollar System. For instance, the Alberta government could price its oil in gold or immediately convert oil sale proceeds into gold instead of U.S. dollars. By doing so, Alberta’s U.S. dollar income would not flow into the federal system that services Canada’s U.S.-denominated debt. This measure, Oland argues, would effectively “neuter the functionality of the Loonie-dollar System,” starving Ottawa of the USD resources needed to continue the scheme. He acknowledges that such a move would be unprecedented and could roil markets – the letter notes it might cause oil prices to spike and advises consulting with U.S. authorities first to avoid misinterpretation. Nevertheless, the suggestion underscores how far Oland believes Alberta may need to go to protect its economy.
Oland frames the situation as pivotal for Alberta’s autonomy within Canada. Because Alberta generates much of the trade surplus underlies the Loonie-dollar strategy, he sees the province as “on the front line” of this economic battle. He implores Alberta officials to act decisively in the province’s interest. “If Canadian/Albertan sovereignty is at all a concern, we need to act now,” Oland writes, underlining the urgency he attaches to the matter. The letter pointedly asks whether Alberta will “subvert control to Europe or the U.S., or remain an independent” force in charting its destiny. While such rhetoric goes beyond typical financial analysis, casting the issue in almost existential terms for Alberta, it highlights the depth of frustration and alarm behind Oland’s message. His stance taps into a broader sentiment in Alberta (and other provinces) about overreach from Ottawa: in this case, a fear that federal monetary policy could compromise the province’s economic future without its consent. For Albertans and Canadians, the clash raises fundamental questions about how far a national government can go in pursuit of global financial strategies that might counter regional interests.
Federal Perspective and Outlook
For now, Oland’s warning has injected a jolt of urgency into Canada’s economic discourse. His stance is striking in that it is not overtly partisan; instead of attacking a party, he frames his alarm to defend financial stability and sovereignty. Nevertheless, it arrives amid an already heated climate of federal-provincial tensions and will likely add to political debate. Economists and policymakers will be parsing these claims in the coming days: Is the Loonie-dollar plan a genuine threat to the Canadian dollar and inflation rate, or are the fears overstated? Are international players poised to use Canada as a pawn in a currency war, or is the government simply ensuring it has a cushion of U.S. funds for emergencies? The answers may become more apparent if the Bank of Canada or the Department of Finance provides further details on how these U.S.-dollar debt issuances will be managed and what limits, if any, will guide them.
In the meantime, Canadians are left to absorb the implications of this high-level financial debate. The situation underscores how decisions in monetary and fiscal policy – often technical or obscure to the public – can have far-reaching impacts on ordinary citizens. Questions of inflation, currency strength, and even provincial economic rights have suddenly become breaking news, driven by the concerns of a credit union CEO from Alberta. Oland’s dramatic call to action has put a spotlight on the balance between bolstering national financial defences and safeguarding the economic interests of Canadians. As the country weighs the potential benefits and pitfalls of the Carney government’s approach, one thing is clear: the conversation about Canada’s financial future and who gets to shape it has only just begun.
Sources:
Brett Oland’s open letter “Battle for the Soul of Alberta” (Mar. 14, 2025) – Bow Valley Credit Union
Department of Finance Canada – News Release: Government bolsters Canada’s foreign reserves by issuing US-dollar global bond (Mar. 12, 2025) https://canada.ca/en/department-finance/news/2025/03/government-bolsters-canadas-foreign-reserves-by-issuing-us-dollar-global-bond.html
Carney needs to stay in his unelected lane
Maga propaganda