Big Six Banks gouged out record profits of $57.7 billion in 2021 – close to triple their 2010 profits, and higher than all similar banks worldwide
FOR IMMEDIATE RELEASE:
Monday, April 4, 2022
OTTAWA – Today, following Canada’s Big 6 Banks reporting, yet again, record-high 2021 annual profits that are almost triple their 2010 profits, and double-digit hikes in their 2022 first-quarter profits, all reaped through gouging of their customers, Democracy Watch called on Finance Minister Chrystia Freeland to use this week’s federal budget bill to make the key changes the Trudeau Liberals promised in their 2021 election platform to tax excess bank profits (but permanently not just for a few years), close tax reduction loopholes the Big Banks exploit, and to stop Big Bank gouging and abuse of customers.
Four of Canada’s Big 6 Banks are listed in the top 50 of Fortune’s Global 500 for 2021, and are the 17th (TD), 18th (RBC), 34th (Scotiabank) and 47th (BMO) most profitable financial institutions in the world (more profitable than most other larger banks) and are four of the five most profitable Canadian companies in the Global 500 (See Canada’s Big Banks Backgrounder).
The excess profits tax and tax loophole closure changes, and changes to stop gouging and abuse of bank customers, that the Liberals promised in their 2021 election platform are among the 11 Key Bank Accountability Changes called for by Democracy Watch’s letter-writing campaign and Change.org petition that a combined total of more than 120,000 voters have endorsed. A recent national poll also showed 70% of Canadians want governments to take these kind of actions.
The Liberals’ election platform promised the following five key measures called for by these 120,000 voters (all the promises were also listed in Minister Freeland’s mandate letter):
- A temporary excess profits tax on banks and insurance companies that earn more than $1 billion a year (which should be permanent, as England has had since 2011, and Australia since 2017);
- Close tax loopholes to prevent banks and other financial institutions from pretending to make their money in low-tax countries in order to lower the taxes they pay in Canada;
- Require financial institutions to offer options to delay consumer debt payments when needed;
- Require all banks to use one ombudsperson who has the power to impose binding arbitration, and;
- Empower the Financial Consumer Agency of Canada to “review the prices charged by banks and impose changes if they are excessive” (which must also include reviewing interest rates, as Australia did in 2017).
(See Backgrounder on Weak Enforcement of Financial Consumer and Investment Protection)
“Will the federal Liberals continue to protect big bank’s gouging profits and their executives’ multi-million salaries, or will they make the changes they promised to increase protections from gouging and abuse for 30 million bank customers, and to require the banks to pay their fair share of taxes?” asked Duff Conacher, Co-founder of Democracy Watch.
The following other key measures are needed to actually stop gouging and abuse, and to stop discrimination in bank lending and service, and to wipe out predatory lending companies and ensure the banks serve everyone across Canada fairly and well at fair prices and interest rates (See the Full List of Key Bank Accountability Changes):
- Require banks and insurance companies to promote a national financial consumer organization, and a national individual investor organization, in their emails and mailings to their customers and investors, to give financial consumers and investors across Canada a very easy way to band together, without any cost to the government or financial instutions, to help and protect themselves through joining the organizations (as recommended in 1998 by the Liberal-controlled MacKay Task Force, House Finance and Senate Banking committees);
- Require the banks to disclose detailed information annually about their lending and service records (as the U.S. has required banks to do for 30 years, including the U.S. banks that 4 of Canada’s Big 6 Banks own), categorized by race, gender, income level and neighbourhood, and require corrective action whenever banks discriminate against customers;
- Require every bank to have basic branches in every neighbourhood (including through partnering with Canada Post outlets for postal banking, as TD has started to do);
- Require the Financial Consumer Agency of Canada (FCAC) to do unannounced, mystery-shopper audits to find violations of consumer protection laws, and to identify all violators and and fine them a minimum of $1 million up to a maximum of $50 million, and;
- Require the Big Banks and other financial institutions to cut the pay of their CEO and other top executives to no more than 40 times their lowest paid employee (as in some European countries).
“Every dollar of excessive profit for the banks, and every person and business the banks unjustifiably refuse to loan to, costs the Canadian economy because it means that the banks are overcharging for their essential services and loans, and choking off job creation and spending,” said Conacher.
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FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Email: [email protected]
Democracy Watch’s Big Banks Coronavirus Accountability Campaign