The Decibel - The Alberta credit union betting on gold over government

Episode Date: February 16, 2024

Worried about total economic collapse because of government mismanagement? Bow Valley Credit Union might be for you. The Alberta credit union is leaning hard into anti-government, anti-regulation rhetoric. And it’s buying up precious metals like gold in a bid to shore up its depositors’ investments.They’re proud of the fact that they’ve run afoul of regulators, using their distrust of authority as a selling point, and recently sponsored Tucker Carlson’s interview with Alberta premier Danielle Smith.The Globe’s Carrie Tait explains how Bow Valley’s CEO has built up the credit union and why they appeal to thousands who’ve invested with them.Questions? Comments? Ideas? Email us at [e-mail]

We've got massive debt. We saw the inflation coming from a mile away when you're going to print that much currency. So we wanted to be able to come together and provide a solution to our membership and our organization to protect ourselves against what I see as inevitable devaluation of the currency, as well as inflation as far as the eye can see. Brett Oland is the CEO of Bow Valley Credit Union. He's speaking to a crowd at an event for the political group Take Back Alberta in Lethbridge. Now, specifically about Bow Valley Credit Union, how are we different than the other credit unions in Alberta? We were the only financial institution, as far as I know, in Canada

that didn't force our staff to get vaccinated. During the trucker convoy, the freedom convoy, we were, as far as, again, one of the only organizations, if not the only organization in Canada to stick up our hand and say, this is not right, you're freezing people's bank accounts. Bow Valley Credit Union is a bit different

from other financial institutions. So we came up with this gold-backed solution where we were backing up our organization with precious metals. Then the regulator stepped in and basically said, cease and desist, you're a systemic risk to the Canadian banking system. Which I thought was really interesting. So since then, we've had to backtrack to some degree. I can't use the word backed anymore to the organization, but what we do is we purchase

physical precious metals. Bow Valley is making a bet that the piles of gold and silver it's buying and storing in vaults will hold value better than the Canadian dollar. And people are banking on it. Today, The Globe's Carrie Tate joins us from Calgary. She'll tell us about how this unconventional approach to banking is capitalizing on politics and fears of inflation. I'm Maina Karaman-Wilms, and this is The Decibel from The Globe and Mail.

Carrie, thanks so much for being here. Hi, thanks for having me again. So off the top, we just heard a bit from Brett Oland, the CEO of this credit union. Tell me a little bit about him. What's he like? Brett walks into a room like the one we just heard in TBA, and he takes the stage like, you know, he doesn't blink. He's really comfortable in front of that crowd. He doesn't really stick out in any way as a CEO. There's nothing about him that,

you know, you would go home and think about for days and days on end. He just kind of does come across as a regular guy who's running a credit union. Very quickly, remind us, how is a credit union different from a bank? Well, it's very much like a bank, except they're owned by the members. The idea, I think, back when they started was pooling your money together. But in a way there, if the credit union makes a bunch of money, the idea is it splits the profit, pays a dividend to its members. Not all of it, of course, it still operates very much like a bank. Because they are smaller in most of Canada, not all offer big, huge mortgages, or they can't necessarily compete with the banks on everything,

but they can on a lot. Okay. So let's talk specifically then about Bow Valley Credit Union. They have this idea of this gold initiative. What is this? Okay. Brett has this idea, the CEO, Brett Olin, that gold and precious metals and silver will hold their value. And there's people all around the world that subscribe to that idea, right? They hoard gold. And so his idea is that in the event of an economic catastrophe in Canada, this credit union has been buying gold and silver, putting it in vaults, and it could sell that gold and silver into an inflationary environment, take that money, and then pay it to its members as a dividend to account for that inflation. So his idea is that he doesn't trust the federal government. He thinks they're printing too much money. It's causing too much inflation and that this is a hedge against that. down a little bit because the reasoning for this gold initiative seems to be kind of a scenario of economic collapse really in Canada. Can you just kind of specify here, Carrie, what exactly are

they worried about? You mentioned inflationary environment, but let's just lay it out. Right. I asked the CEO this. And so I'm going to walk you through what he walked me through. Not everyone's going to agree that this is A, possible, or B, going to work. But let's just go along for the ride. So it starts with this idea. First of all, you don't like the federal government. You don't trust them to manage sort of the economy in general, but specifically a catastrophe. And so the example that Olin presented to me was one of a housing crisis, which in Canada is not that unreasonable. We can see housing crisis all across the country.

But that would then cause a federally regulated bank to collapse. So hypothetically, like TD, RBC, those big recognizable brand names. Now, when a federally regulated bank collapses, the deposit holders, you know, you and me, our deposits are guaranteed up to $100,000. It's like an insurance. So not everyone would get all of their money because some people would have deposit or accounts worth more than $100,000. So Olin fears that the federal government would then make those people whole. And you can kind of see why a federal government might want to step in if, say, a bank collapsed and all of a sudden all of these people were out, what would be millions

and millions and millions of dollars would be lost. But to make those people whole, he sees the federal government printing trillions of dollars. That would then cause widespread inflation across the economy. So even people who were not customers at that bank, their money in their bank accounts would not be worth as much unless you banked with Bo Valley, in which case in his penciled out doomsday scenario, they would take their gold and silver and sell it into the inflationary market, which would make it even more because in theory, that's how that market would respond to that. They would take that cash, distribute it to its members as a special dividend, and then their members would be whole or somewhat whole after accounting for the inflation.

That's a good response. Not everybody buys into this idea. Of course, it's pretty untested. It requires a lot of imagination, but there's a lot of people who think that the federal government manipulates or controls too much of what the dollar is worth, but they can't control precious metals. So that's part of the attraction to this credit union. Okay. And is this something a lot of people are worried about, I guess, like the potential of a federally regulated bank in Canada collapsing that way and then the government printing all that money? It's not something people are running around talking about as an actual possibility. It's more like when the CEO walks people through it or they like the idea of having gold and silver, having a share of it in their back pocket kind of. And they do see inflation everywhere, right? There's no arguing that. And the people who bank here do tend to be really wary of the federal government. Wary is like a very polite term in this situation.

So I don't think it's something that they've imagined in their head. But when you put it to them, well, what if we had gold and silver to as a backstop, they get on board. So how many people are signing up for this? Like what kind of support does this credit union have? Right now it has about 10,000 members. It makes it a midsize credit union. Some of those would have been there prior to this turn of political philosophy within the bank and the economic strategy. So this idea of dealing in precious metals is kind of a newer thing than this. This credit union existed before. Yeah, it's two, three, four years old. But what

we're seeing now is Brett Olin, the CEO, is out on the road pitching it to people and attracting new customers. So you said about 10,000 members now. What about assets? What kind of assets do they have? It's got over 500 million assets. So that's like the deposits, the reserves, the money that's right there. This is one of the areas where they clash with the regulators. They want to take their gold and silver and market as if it was cash essentially, right? Like liquid asset. Their regulator says, no, no, you cannot do that. And so Olin argues that their assets are much greater than what their financial statements reflect. So he talks about the gold and the silver, but it took me a while to get it out of them. But it's not as though they've got

like McDuck amounts of gold that they're diving into. They're not swimming in it, okay. Yeah, there's no McScrooge amounts of gold. They claim they have 31 troy ounces of gold and about a third of a ton of silver. And they argue, well, it's, you know, the strategy's new. They're just starting. The regulator did make them sell bars of their precious metal. And now they have to collect basically Royal Canadian mint coins of it. So and reflect them at the face value, which is like 10 and 50 bucks or something like that. I think it's five for silver, 50 for gold.

Yeah, rather than the weight of what it would sell in the open market. But it actually is a tiny fraction of their assets right now. However, I mean, they're arguing this is just the beginning. I guess I wonder about this method of stockpiling gold and silver. Like, is that actually safer than a traditional bank? Traditional money, I guess I should say. Well, I guess that gets into the idea of like, do you trust the dollar bill in your hands? You know, they don't trust the currency.

They don't trust that it will be worth what it says it's going to be worth. And so you buy into this global market. But the global market years ago moved away from the idea of backing things with gold and silver. We don't have great vaults of gold anymore. But it still does appeal to a subset of people. Interesting. Okay. So, but essentially the idea of, you know, the value of gold protecting yourself financially, maybe not as strong as it was decades ago, it sounds like. Yeah. Bow Valley's definitely out there. They're not trying to pretend that this is a mainstream idea. They know that they are unique, but they also sell that idea. We are offering a unique idea that everyone else walked away from. Federally regulated banks have defaulted before. The last one in Canada was in 1996. Historically, of course, there have been moments of extreme inflation. And recently,

when we're thinking about stuff like cryptocurrencies, we have seen cryptocurrencies implode after bank runs. So I guess I just wonder, though, is Bow Valley Credit Union onto something here? Like, is this a legitimate concern? Well, even just that you're asking, are they onto something? It really shows like why it does appeal to people that maybe most of us don't have a great grasp of global markets and what would happen in a bank collapse. And you can see why somebody would be like, you know what? Okay. I guess I got to protect myself some way. I don't know. Brett is an expert. He's up there. He tells a convincing story. Why not? We'll be back in a minute. So, Carrie, a big part of Olin's pitch seems to be his values, right, about being free from government, overreach, doing things your own way, essentially.

I guess, is this a big factor in why people are drawn to this credit union? This is huge. When I was talking to Olin, of course, like I was somewhat skeptical of the gold idea. And he said, yeah, you know what? Of course, some people are skeptical. But that's not all that attracts people to Bow Valley right now. So when you look at what this bank is doing, kind of separated into two piles, some are attracted to the gold and silver, and some are attracted to its politics. It doesn't trust the Trudeau government, especially. It rails against COVID restrictions. It brags that it did not enforce vaccine mandates. It tells people it will not ever freeze bank accounts, which of course is a nod to what happened in February 2022 in response to the convoy protests and the Emergencies Act.

And in Alberta, that really, really speaks to people, and especially the people that Olin is literally speaking to. They're the types of people who either were involved in the convoy, supported the convoy, or were perhaps quickly upset that some of the things were happening. So when he's talking about particularly the bank freezing, that is a tangible thing that he's offering people that he says he will not do. Of course, how much control he has over some of that is still a little questionable. But when he's talking politics, that's where people can really relate and they come alive. And so how is Olin getting his message out? How is he recruiting new members? Well, we heard him at the TBA meeting. So that's one way he's going along with David Parker and other groups like him.

But they're a little more active now, and that is partly through TBA. James Lindsay, he's a controversial American podcaster. He sponsored tickets to that event with Take Back Alberta. They bought a whack of tickets to the Tucker Carlson event in Calgary and gave people tickets that way. And he was one of the people who introduced Tucker at the very beginning of that afternoon in Calgary. That was that event in January with Premier Daniel Smith. Right. So that was a pretty high profile event. And, you know, their logo was on some of the branding around the room and they gave away gold at the event. And then at the anniversary of the convoy protests at the end of January in Alberta. There was an anniversary convoy down to Cootes and he was down there. So he's kind of really tied himself to that crowd in high profile moments of sponsorship or even just where their logo might be displayed. I want to come back to something you were talking about a little bit earlier, Carrie,

which is the convoy protests in Ottawa. Because Brett Olin has spoken out about the federal government's freezing of bank accounts, as you said, during those protests. And this is kind of a big point that does kind of rally people, it seems like, when we're talking about this credit union. He has used that as an example of how to tap into concern, essentially, then over government overreach. And we do have a clip from a YouTube

spot that he had. So let's just listen to this clip. Not necessarily this government, but a government in the future may be able to take control of and basically dictate how you live your life. For example, with the central bank digital currency, it not only records sort of the date time amount of your transaction but can also track what you got with your transaction so for example if you went to the grocery store and you bought too much red meat or not enough vegetables or too many french fries or something like that effectively what you could do with the central bank digital currency is shut down your account if they don't agree with what you're purchasing at a store.

So, Carrie, Olin is essentially talking here about a fear around central bank currency that they could regulate what you're purchasing. Is what he's describing actually possible? Well, I guess it depends on your imagination. Do you believe that the federal government would make those types of decisions? And that logic appeals to a lot of people in Alberta who run in those circles, the idea of a social credit score. It's the same idea, the same fear of 15-minute cities, digital IDs, digital currencies. Those are the same family of ideas. And the people who are scared of those tend to find Olin's hypothetical pitch

somewhat possible. And you want to guard against that. And you mentioned the fear of 15-minute cities. And there's a kind of conspiracy around that, right, that it's about government control. And as you say, Carrie, it's kind of like tapping into this fear of thinking that the government is trying to control all these aspects of your life. Right. It's both a mix of reality and conspiracy theory because some of this has not happened. But when you look at something like Olin talking about the federal government printing billions of dollars and causing inflation, that is something that is pretty tangible to people. And so if you're already there,

maybe you can buy into the next two or three or four dominoes that fall in his pitch. Let's talk about regulation a little bit here, because Bow Valley Credit Union is pushing Alberta to exempt it from the Federal Anti-Money Laundering Unit. This is Fintrac, right? Financial Transactions and Reports Analysis Center of Canada. Fintrac, of course, is the agency that monitors the flow of money, and they monitored the flow of money during the convoy protests, and then banks, of course, could freeze those accounts. Kerry, could Alberta exempt this credit union from being monitored by FinTrack?

This is a little tricky. I couldn't find an expert who said, yes, there's a way to do that. However, the premier in a podcast had said she wants to change the Alberta Bill of Rights so bank accounts can't be frozen. The very next day, I received an email statement back from the finance minister, Alberta's finance minister, that said, no, that's a terrible idea. The day after, the premier said, we want to figure out how to do that. The province regulates credit unions, but something like the anti-money laundering legislation is something that might supersede that. It doesn't look as though there's an easy path for this. Okay. And I know you did get a statement from the Credit Union Deposit

Guarantee Corp, which I guess regulates credit unions in Alberta. What did they tell you, Carrie? So the reason I had went to them was because in Brett's pitch at the TBA meeting in Lethbridge, he talks about how the regulators said, you are a threat to the Canadian banking system, which is a, those are strong words. And the regulator came back and said, well, we didn't say that, perhaps like exactly, but the words that they came out with were not an endorsement and they were still pretty cautionary. There was not a lot of light between the two. So they argue that the clash there is based on accounting. They don't like when Brett was using the phrase gold back. They're not backed by gold, the deposits. So Brett has said that he sold, you know, the bars, that he doesn't use that language anymore, but that they're still negotiating their way through this.

I mean, it sounds like Bow Valley Credit Union, though, is kind of, it's positioning itself to operate outside of the rules, right? That's one of the positive points that Olin seems to be talking about. I guess I just wonder, like, is this all legal to operate in a way outside of the federal banking system? That's what he seems to be talking about. I guess I just wonder, is this all legal to operate in a way outside of the federal banking system? That's what he seems to be advocating for. See, that's the thing. They're not operating outside of those rules. They're pushing their luck and they are getting pushback and they have responded to that pushback. But one of the reasons why Canadian banks are not failing all over the place is because we really do have strong regulations in Canada. And Brett Olin has met pushback within even Alberta, where he's been asking the provincial government, please change these rules.

And the finance minister came back and was sharply against it, said no, and because we're not going to do it because it will hurt Alberta's economic situation. Very rarely do we get that type of explanation. And there it was. This credit union does seem to want to separate itself from federal influence, as we've talked about. And I feel like this comes up often when we're discussing things with you, Carrie, because there seems to be, you know, desire in parts of Alberta specifically to keep a distance from Ottawa. I guess I just wonder, how does this situation of the Bow Valley Credit Union, how does that fit into the broader feeling in Alberta towards federal institutions? It's a reflection of the broader situation in Alberta. Let's not pretend that like people are going to this credit union in droves and customers are pulling out their money at the

TD Bank and walking across the street. It is a very specific group of people. They are very enthusiastic and there are enough of them to move the needle, to prompt Bow Valley to open new branches when they've come up with enough people in one area. But it's not as though Albertans of a whole even know of Bow Valley, let alone what they're doing. At the same time, I do think it really reflects a sentiment in Alberta where it is reasonable for somebody to say, like, you know what? We need to get away from the federal regulations as fast as possible. Carrie, thank you so much for being here today.

Thanks for having me. That's it for today. I'm Maina Karaman-Wilms. Our producers are Madeline White, Cheryl Sutherland, and Rachel Levy-McLaughlin. David Crosby edits the show. Adrienne Chung is our senior producer,

and Angela Pachenza is our executive editor. Thanks so much for listening, and I'll talk to you next week.