September 5, 2017

The bank was able to turn negative press to a small advantage – but is the press really paying attention?

Interest Rate differentials (“IRDs”) can be extremely costly.  They are not based on the interest rate at which the loan was written but rather on the ‘differential’ between the actual loan rate and the prevailing posted rate at the time of writing the paper.  Typically all major lenders will issue mortgages at discounts on posted rates.  When the house is sold or the vendor tries to renegotiate their mortgage they become subject to the dreaded IRDs.

This story however has an additional and very interesting twist:

Becoming a soldier in the Canadian Armed Forces is still a very good career choice, it pays reasonably well, offers career training and good benefits and it has relatively low risk – considering it is a profession that is all about war.   Surely when people sign up someone in the recruiting office has the courtesy to tell them that they may be called into active service?

Obviously there is a highly visible risk involved joining the armed services.  Similarly firefighters, police officers and construction workers all expose themselves to workplace hazards.

Interestingly, since 2003 (a span of more than ten years) a total of 158 Canadian military personnel have been killed in conflict in foreign countries.   The WSIB reports that in 2011 alone a total of 73 Ontario workers lost their lives in workplace accidents.

Additionally in Ontario hundreds of thousands of workers are injured in workplace accidents every year. Should every injured worker automatically expect the same treatment from their bank?   Or, should they all be going to the press to obtain the same kind of benefit?