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90,000+ call for key measures to stop discrimination by Canada’s banks

For more than 40 years, U.S. government has required banks to disclose lending and service records by race, gender, income and neighbourhood

Canadian governments have done nothing to stop bank discrimination, and are also years behind in key measures to stop police discrimination

FOR IMMEDIATE RELEASE:
Tuesday, June 16

OTTAWA – Today, Democracy Watch announced that more than 90,000 people from across Canada have joined its letter-writing campaign and/or signed its Change.org petition calling on all federal parties to work together in this minority government situation to enact key measures to stop Canada’s big banks from discriminating against any customer, and to do more to help Canadians and small businesses, and pay their fair share of taxes, now and after the coronavirus crisis.

For more than 40 years, U.S. has required under the Community Reinvestment Act (CRA) banks to disclose their lending and service record by race, gender, income and neighbourhood, and required them to take corrective action if they are found to be discriminating against any of their customers.

The CRA needs to be strengthened, but since the 1980s it has resulted across the U.S. in trillions of dollars of lending to credit-worthy visible minorities, women entrepreneurs, and has also helped ensure low-income neighbourhoods have access to banking services instead of finding only predatory payday lender outlets in their area.

In contrast, despite broad support across Canada for key changes for more than 20 years (mainly by the Canadian Community Reinvestment Coalition (CCRC) organized by Democracy Watch), Canadian governments have done nothing to stop discrimination by our big banks.

Canada’s Big Banks track their lending and service by the characteristics of customers – they could easily be required to disclose this information as part of their annual Public Accountability Statements, just like U.S. banks are required to do annually.

As well Canadian governments have done nothing to stop gouging by our big banks. Canada’s Big 6 Banks reported record profits of more than $46 billion in 2019 – the 10th year in a row, and more than double their 2010 profits. The Big 6 Banks reaped record profits every year for the past 10 years in part by firing thousands of people, shifting jobs overseas (or using temporary foreign workers), cutting services, and hiking fees and credit card interest rates even as the Bank of Canada’s prime rate dropped to record low levels.

The Big 6 Banks also paid their CEOs a total of $75 million in 2019 in salary and bonuses (an average of $12.5 million). (See Canada’s Big Banks Backgrounder)

Finance Minister Bill Morneau has boasted that the federal government negotiated with the Big 6 Banks to temporarily cut some credit card interest rates for some customers (but not for small businesses) who request a deferral for a couple of months, and to process small business loans funded by the government (which are not being used very much by many small businesses), in addition to the up-to-6-month mortgage and loan deferrals and fee reductions the banks have already offered (but again, only for some customers, with the delayed amount still required to be paid later, plus interest).

However, Prime Minister Trudeau stated on April 6th that “we need to see even more action like this going forward because this is a time to think about each other, not about the bottom line.”

“The federal government cannot tell if the banks are still gouging or treating customers unfairly in this crisis, and won’t be able to tell post-crisis, because the banks are allowed to keep secret the profit levels in each area of their business, what type of borrowers they approve and reject for loan and credit relief, and how many complaints they are receiving,” said Duff Conacher, Co-founder of Democracy Watch. “As the U.S. did more than 40 years ago, the federal government must require the banks to disclose this information and more to ensure the banks give everyone who needs it a real break in their loan and credit card payments during the crisis, and serve everyone fairly and well at fair interest rates and fees that give the banks a reasonable profit and not excessive gouging profit levels.”

“The federal Conservatives and Liberals have done nothing since 2010 to stop Canada’s big banks from hiking fees and credit card interest rates to gouge Canadians and more than double their profits to the highest levels of banks world-wide, while reducing service, treating many customers unfairly, and exploiting loopholes to lower the amount they pay in taxes,” said Conacher. In this time of crisis, and with the minority government, all parties must work together to make key changes to make banks help more now, to finally stop their excessive profits, gouging and abuse of consumers, and to make banks pay their fair share in taxes.”

Just like the initial spending actions taken by the federal and provincial governments were not enough to address the coronavirus crisis, the banks must do more. The Big 6 Banks’ decade of record profits and cuts to their prime lending rates show that they can afford to cut interest rates much more on loans like mortgages etc., and also to cut fees much more, and not raise them again to their gouging, excessive profit levels.

See Full List of Key Bank Accountability Changes.

As well, enforcement measures and penalties also need to be strengthened to ensure banks, and other financial institutions, serve everyone fairly and well at fair prices (See Backgrounder on Weak Enforcement).

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
Email: info@democracywatch.ca

Democracy Watch’s Big Banks Coronavirus Accountability Campaign

85,000+ call on federal parties to Make the Big Banks Help more during the coronavirus crisis, and after

Big Banks’ temporary cuts to some credit cards and fees and mortgage and loan deferrals for only some customers are not enough – key measures needed to ensure fair interest rates, fees and treatment of all customers now, and into the future

Big 6 Banks gouged out record profits of more than $46 billion in 2019 – their 10th year in a row of record profits – so they can afford to help more, as the Prime Minister said recently

Loopholes also must be closed to ensure banks pay fair share of taxes

FOR IMMEDIATE RELEASE:
Thursday, May 14, 2020

OTTAWA – Today, Democracy Watch announced that now more than 85,000 people from across Canada have joined its letter-writing campaign and/or signed its Change.org petition calling on all federal parties to work together in this minority government situation to make Canada’s big banks do more to help Canadians and small businesses, and pay their fair share of taxes, now and after the coronavirus crisis.

The call comes as Canada’s Big 6 Banks reported record profits of more than $46 billion in 2019 – the 10th year in a row, and more than double their 2010 profits. The Big 6 Banks reaped record profits every year for the past 10 years in part by firing thousands of people, shifting jobs overseas (or using temporary foreign workers), cutting services, and hiking fees and credit card interest rates even as the Bank of Canada’s prime rate dropped to record low levels.

The Big 6 Banks also paid their CEOs a total of $75 million in 2019 in salary and bonuses (an average of $12.5 million). (See Canada’s Big Banks Backgrounder)

Finance Minister Bill Morneau has boasted that the federal government negotiated with the Big 6 Banks to temporarily cut some credit card interest rates for some customers (but not for small businesses) who request a deferral for a couple of months, and to process small business loans funded by the government, in addition to the up-to-6-month mortgage and loan deferrals and fee reductions the banks have already offered (but again, only for some customers, with the delayed amount still required to be paid later, plus interest).

However, Prime Minister Trudeau stated on April 6th that “we need to see even more action like this going forward because this is a time to think about each other, not about the bottom line.”

“The big banks can afford to do much more to help during this crisis, and must be required by law passed by the federal Liberals and all parties to disclose much more information about how they treat customers and borrowers, and about their profits in every part of their business, to ensure they don’t gouge or abuse anyone and are effectively required to serve everyone fairly and well with fair interest rates and fees,” said Duff Conacher, Co-founder of Democracy Watch.

“The federal government cannot tell if the banks are still gouging or treating customers unfairly in this crisis, and won’t be able to tell post-crisis, because the banks are allowed to keep secret the profit levels in each area of their business, what type of borrowers they approve and reject for loan and credit relief, and how many complaints they are receiving,” said Conacher. “As the U.S. did 30 years ago, the federal government must require the banks to disclose this information and more to ensure the banks give everyone who needs it a real break in their loan and credit card payments during the crisis, and serve everyone fairly and well at fair interest rates and fees that give the banks a reasonable profit and not excessive gouging profit levels.”

“The federal Conservatives and Liberals have done nothing since 2010 to stop Canada’s big banks from hiking fees and credit card interest rates to gouge Canadians and more than double their profits to the highest levels of banks world-wide, while reducing service, treating many customers unfairly, and exploiting loopholes to lower the amount they pay in taxes,” said Conacher. In this time of crisis, and with the minority government, all parties must work together to make key changes to make banks help more now, to finally stop their excessive profits, gouging and abuse of consumers, and to make banks pay their fair share in taxes.”

Just like the initial spending actions taken by the federal and provincial governments were not enough to address the coronavirus crisis, the banks must do more. The Big 6 Banks’ decade of record profits and cuts to their prime lending rates show that they can afford to cut interest rates much more on loans like mortgages etc., and also to cut fees much more, and not raise them again to their gouging, excessive profit levels.

All federal parties need to work together now to require the banks:

  1. To cut all their interest rates and fees in half now, and cut loan payments entirely for anyone who needs it;
  2. To disclose detailed profit reports after fully independent audits and keep rates and fees at reasonably low levels in the future (for example, many U.S. states cap credit card interest rates);
  3. To empower consumers and increase consumer protection by supporting the creation of an independent, consumer-run bank watchdog group (as recommended by MPs and senators in 1998);
  4. To disclose approval rates for credit, loans and account services by neighbourhood and type of borrower, and require corrective actions by any bank that discriminates (as the U.S. has required for 30 years under the Community Reinvestment Act) as part of their annual Public Accountability Statements);
  5. To re-open basic banking branches in neighbourhoods (where they closed them in the 1990s) to help get rid of predatory pay-day loan companies (and banking at Canada Post outlets should also be allowed to help ensure everyone has access to basic banking services at fair rates and fees);
  6. To cut bank executive pay down to a reasonable level (as in some European countries);
  7. To pay their fair share of taxes now, and in the future, by closing all the loopholes they exploit and (as England and Australia have) imposing an excess profits tax, and;
  8. Finally, enforcement measures and penalties also need to be strengthened to ensure banks, and other financial institutions, serve everyone fairly and well at fair prices (See Backgrounder on Weak Enforcement)

See Full List of Key Bank Accountability Changes.

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
Email: info@democracywatch.ca

Democracy Watch’s Big Banks Coronavirus Accountability Campaign

Democracy Watch calls on B.C. Special Prosecutor to reverse decision not to prosecute anyone in lobbyist donations scandal

Investigation ending like quick-wins probe – years later with very questionable decision not to prosecute anyone

FOR IMMEDIATE RELEASE:
Tuesday, May 12, 2020

OTTAWA – Today, Democracy Watch called on the B.C. Special Prosecutor David Butcher to reverse his decision announced yesterday not to prosecute anyone involved in the lobbyist donation scheme revealed by the Globe and Mail in March 2017 in which several lobbyists donated money their clients gave them. Mr. Butcher’s decision is based on his exaggerated conclusion that convictions wouldn’t be possible, and the RCMP’s misplaced reasoning in its August 2019 report that the trials may cost more than the illegal donations.

“In situations like this, where a rule in a law has not been drawn clearly in past court rulings, prosecutors should generally prosecute when there is evidence of a violation and let the courts decide whether the accused has crossed the line,” said Duff Conacher, Co-founder of Democracy Watch. “By failing to prosecute anyone, the special prosecutor has let all the alleged violators off the hook without even identifying them, and blocked the courts from ruling on their very questionable and likely illegal actions.”

David Butcher was appointed Special Prosecutor to assist the RCMP investigation at the end of March 2017. Elections B.C. reported in April 2017 that the B.C. Liberals had returned $174,313 in donations dating back to 2010 ($92,874 of which the Liberals had admitted were “prohibited” donations), and that the NDP had returned $10,500.

“The B.C. Liberals admitted they returned almost $93,000 in illegal donations in April 2017, so it’s unbelievable that special prosecutor Butcher has decided three years later not to prosecute any of those easily identifiable donors for violating B.C.’s political donations law,” said Duff Conacher, Co-founder of Democracy Watch. “Mr. Butcher should drop his weak excuses and reverse his unjustifiable decision and prosecute the people who violated this key democracy law.”

The RCMP’s investigation is ending like another long-delayed investigation overseen by Butcher – the so-called “quick-wins probe” that lasted five years and resulted in only one person pleading guilty even though the RCMP recommended charges against other people.

In this case, according to the first page of Mr. Butcher’s statement released yesterday, the RCMP’s report stated that there was “no substantial likelihood of conviction” in many of the donation situations and, secondly, that “where violations have occurred the RCMP has determined that is not in the public interest to pursue a prosecution, as the cost of doing so would be disproportionate to the value of the donations under investigation.”

Mr. Butcher exaggerates what the RCMP reported to say on the third page of his statement that “I have concluded that there is no prospect of any conviction in this case.”

The RCMP report paragraph quoted on the first page of Mr. Butcher’s statement didn’t say that there was no chance of conviction, it said that violations occurred but conviction wouldn’t be likely, and that the cost of prosecuting outweighs the amount of the donations.

Those are lame excuses that Mr. Butcher should not have exaggerated to try to create cover for his unjustified decision not to prosecute anyone.

Many people are prosecuted in Canada without full, clear evidence, including many who have stolen less than the cost of prosecuting them. They are prosecuted in part to send the message to the public that you can’t break the law and get away with it.

The message Mr. Butcher’s decision not to prosecute sends is that you can break the law in B.C. and get away with it, if you are part of the province’s political and legal elite – which won’t surprise many people in the province.

“Once again, David Butcher is burying, through unjustifiable delay and excuses, the possibility of powerful people in B.C. who have violated a key democracy-protecting law being prosecuted and convicted,” said Conacher.

At the end of his statement, Mr. Butcher says about the 2018 changes to B.C.’s political donations banning corporate and union donations and limiting individual donations to $1,200 annually that: “These amendments should squarely address the concerns expressed by the media and the complainants in this case.” This is entirely wrong. Democracy Watch’s concern was that lobbyists broke the law, and the only thing that will address that concern is having the lobbyists who violated the law prosecuted.

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
Email: info@democracywatch.ca

Democracy Watch’s Money in Politics Campaign and Stop Unfair Law Enforcement Campaign and Stop Bad Government Appointments Campaign

50,000 + call on federal parties to Make the Big Banks Help more during the coronavirus crisis, and after

Big Banks’ temporary cuts to some credit cards and fees and mortgage and loan deferrals for only some customers are not enough – key measures needed to ensure fair interest rates, fees and treatment of all customers now, and into the future

Big 6 Banks gouged out record profits of more than $46 billion in 2019 – their 10th year in a row of record profits – so they can afford to help more, as the Prime Minister said recently

Loopholes also must be closed to ensure banks pay fair share of taxes

FOR IMMEDIATE RELEASE:
Tuesday, April 21, 2020

OTTAWA – Today, Democracy Watch announced that more than 50,000 people have joined its letter-writing campaign and/or signed its Change.org petition calling on all federal parties to work together in this minority government situation to make Canada’s big banks do more to help Canadians and small businesses, and pay their fair share of taxes, now and after the coronavirus crisis.

The call comes as Canada’s Big 6 Banks have once again reported record profits of more than $46 billion in 2019 – the 10th year in a row, and more than double their 2010 profits. The Big 6 Banks have reaped record profits every year for the past 10 years in part by firing thousands of people, shifting jobs overseas (or using temporary foreign workers), cutting services, and hiking fees and credit card interest rates even as the Bank of Canada’s prime rate dropped to record low levels.

The Big 6 Banks also paid their CEOs a total of $75 million in 2019 in salary and bonuses (an average of $12.5 million). (See Canada’s Big Banks Backgrounder)

Finance Minister Bill Morneau has boasted that the federal government negotiated with the Big 6 Banks to temporarily cut some credit card interest rates for some customers (but no small businesses) who request a deferral for a couple of months, and to process small business loans funded by the government, in addition to the mortgage and loan deferrals and fee reductions the banks have already offered (but again, only for some customers, with the delayed amount still required to be paid later, plus interest).

However, Prime Minister Trudeau stated on April 6th that “we need to see even more action like this going forward because this is a time to think about each other, not about the bottom line.”

“The federal government cannot tell if the banks are still gouging or treating customers unfairly in this crisis, and won’t be able to tell post-crisis, because the banks are allowed to keep secret the profit levels in each area of their business, what type of borrowers they approve and reject for loan and credit relief, and how many complaints they are receiving,” said Duff Conacher, Co-founder of Democracy Watch. “As the U.S. did 30 years ago, the federal government must require the banks to disclose this information and more to ensure the banks give everyone who needs it a real break in their loan and credit card payments during the crisis, and serve everyone fairly and well at fair interest rates and fees that give the banks a reasonable profit and not excessive gouging profit levels.”

“The federal Conservatives and Liberals have done nothing since 2010 to stop Canada’s big banks from hiking fees and credit card interest rates to gouge Canadians and more than double their profits to the highest levels of banks world-wide, while reducing service, treating many customers unfairly, and exploiting loopholes to lower the amount they pay in taxes,” said Duff Conacher, Co-founder of Democracy Watch. In this time of crisis, and with the minority government, all parties must work together to make key changes to make banks help more now, to finally stop their excessive profits, gouging and abuse of consumers, and to make banks pay their fair share in taxes.”

Just like the initial spending actions taken by the federal and provincial governments were not enough to address the coronavirus crisis, the banks must do more. The Big 6 Banks’ decade of record profits and cuts to their prime lending rates show that they can afford to cut interest rates much more on loans like mortgages etc., and also to cut fees much more, and not raise them again to their gouging, excessive profit levels.

All federal parties need to work together now to require the banks:

  1. To cut all their interest rates and fees in half now, and cut loan payments entirely for anyone who needs it;
  2. To disclose detailed profit reports after fully independent audits and keep rates and fees at reasonably low levels in the future (for example, many U.S. states cap credit card interest rates);
  3. To empower consumers and increase consumer protection by supporting the creation of an independent, consumer-run bank watchdog group (as recommended by MPs and senators in 1998);
  4. To disclose approval rates for credit, loans and account services by neighbourhood and type of borrower, and require corrective actions by any bank that discriminates (as the U.S. has required for 30 year under the Community Reinvestment Act) as part of their annual Public Accountability Statements);
  5. To re-open basic banking branches in neighbourhoods (where they closed them in the 1990s) to help get rid of predatory pay-day loan companies (and banking at Canada Post outlets should also be allowed to help ensure everyone has access to basic banking services at fair rates and fees);
  6. To cut bank executive pay down to a reasonable level;
  7. To pay their fair share of taxes now, and in the future, by closing all the loopholes they exploit (as England and Australia have), and;
  8. Finally, enforcement measures and penalties also need to be strengthened to ensure banks, and other financial institutions, serve everyone fairly and well at fair prices (enforcement is much stronger in the U.S. and England — See Backgrounder on Weak Enforcement in Canada)
(See Full List of Key Bank Accountability Changes).

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
Email: info@democracywatch.ca

Democracy Watch’s Big Banks Coronavirus Accountability Campaign

Backgrounder – Weak Enforcement of Financial Consumer and Investor Protection in Canada

(April 2020)

Both watchdogs too weak in powers, and enforcement attitude, to protect financial consumers and investors

The federal government’s Financial Consumer Agency of Canada (FCAC) has a very weak enforcement record since it was created in 2003.

It has made only 134 compliance rulings, is prohibited from naming a law-violating bank unless it prosecutes the bank, and it has only prosecuted 2 banks (neither of them a Big 6 bank). The FCAC not only lacks resources by comparison to the similar watchdog agencies in Britain and the U.S., it is also clearly a lapdog compared to these two other agencies.

According to an article by Reuters in March 2017, and Democracy Watch’s research of fines imposed since then, the FCAC has issued fines totaling just $3.2 million since 2001 in the 134 rulings it has issued.

In contrast, since 2013 when it was created, Britain’s Financial Conduct Authority (FCA) has already issued penalties totalling more than US$3.5 billion, and since 2011 when it was created, the U.S. Consumer Financial Protection Bureau (CFPB) has already imposed fines of more than US$5 billion.

Key consumer protection rules need to be strengthened, and the FCAC must be required to do unannounced, mystery-shopper audits to find violations, required to publicly identify financial institutions who violate the rules, and required to impose high fines on violators. The FCAC hasn’t done unannounced audits since 2005, tipped off the banks in March 2017 about the audit they did through the rest of 2017 on abuses, and then allowed the banks to see the draft audit results and suggest changes that weakened the report.

Meanwhile, former Finance Minister Jim Flaherty, and current Finance Minister Bill Morneau, have done nothing to require TD, Royal, Scotiabank or National Bank to stop using their own complaint judges and return to the Ombudsman for Banking Services and Investments (OBSI).

All banks and investment companies should be required to use OBSI, and OBSI’s rulings on complaints by bank customers and investors must be made binding in every case.

An FCAC report released in February 2020 showed that the banks have a horrible record of dealing with financial consumer and investor complaints, especially the banks using their own complaint judges.

The maximum fine allowed under the Bank Act is $10 million, which is still low for the big banks who each make more than $10 billion in revenue annually, especially given that it is very unlikely the FCAC or a court will ever impose the maximum fine.

The Financial Consumer Agency of Canada (FCAC) and the Ombudsman (OBSI) will continue to be ineffective until the federal government gives them key powers and requires them to use those powers to audit banks and other financial institutions regularly and to penalize every violation with a high fine (there should be minimum fines for various violations of at least $1 million, and the maximum fine should be $50 million) and public naming and shaming.

Finally, to ensure the FCAC and OBSI do their jobs properly, and to ensure that financial consumers and investors have help when complaining to the FCAC and OBSI, require banks, trust and insurance companies to promote in their mailings and emails to customers that they can join an independent, consumer-run Financial Consumer Organization (FCO – as recommended in 1998 by the MacKay Task Force, and the House Finance and Senate Banking committees) so consumers have a place to call for help if they are gouged or treated unfairly, and to get fully independent, expert advice (See details at: https://democracywatch.ca/question-and-answers-about-the-proposed-financial-consumer-organization/).

For more information, see Democracy Watch’s
Big Bank Coronavirus Accountability Campaign

Backgrounder – Weak Enforcement of Financial Consumer and Investor Protection in Canada

(April 2020)

Both watchdogs too weak in powers, and enforcement attitude, to protect financial consumers and investors

The federal government’s Financial Consumer Agency of Canada (FCAC) has a very weak enforcement record since it was created in 2003.

It has made only 134 compliance rulings, is prohibited from naming a law-violating bank unless it prosecutes the bank, and it has only prosecuted 2 banks (neither of them a Big 6 bank). The FCAC not only lacks resources by comparison to the similar watchdog agencies in Britain and the U.S., it is also clearly a lapdog compared to these two other agencies.

According to an article by Reuters in March 2017, and Democracy Watch’s research of fines imposed since then, the FCAC has issued fines totaling just $3.2 million since 2001 in the 134 rulings it has issued.

In contrast, since 2013 when it was created, Britain’s Financial Conduct Authority (FCA) has already issued penalties totalling more than US$3.5 billion, and since 2011 when it was created, the U.S. Consumer Financial Protection Bureau (CFPB) has already imposed fines of more than US$5 billion.

Key consumer protection rules need to be strengthened, and the FCAC must be required to do unannounced, mystery-shopper audits to find violations, required to publicly identify financial institutions who violate the rules, and required to impose high fines on violators. The FCAC hasn’t done unannounced audits since 2005, tipped off the banks in March 2017 about the audit they did through the rest of 2017 on abuses, and then allowed the banks to see the draft audit results and suggest changes that weakened the report.

Meanwhile, former Finance Minister Jim Flaherty, and current Finance Minister Bill Morneau, have done nothing to require TD, Royal, Scotiabank or National Bank to stop using their own complaint judges and return to the Ombudsman for Banking Services and Investments (OBSI).

An FCAC report released in February 2020 showed that the banks have a horrible record of dealing with financial consumer and investor complaints, especially the banks using their own complaint judges.

The maximum fine allowed under the Bank Act is $10 million, which is still low for the big banks who each make more than $10 billion in revenue annually, especially given that it is very unlikely the FCAC or a court will ever impose the maximum fine.

The Financial Consumer Agency of Canada (FCAC) and the Ombudsman (OBSI) will continue to be ineffective until the federal government gives them key powers and requires them to use those powers to audit banks and other financial institutions regularly and to penalize every violation with a high fine (the maximum fine should be $50 million) and public naming and shaming.

For more information, see Democracy Watch’s
Big Bank Coronavirus Accountability Campaign

Backgrounder – Canada’s Big Banks

(April 2020)

Controlling the market, and gouging out world-leading, record profits year after year for the past decade, while reducing service and treating many customers unfairly

According to Finance Canada, despite the lowering of barriers to competition 15 years ago under a World Trade Organization agreement, Canada’s Big 6 Banks:

  • Bank of Montreal (BMO)
  • Canadian Imperial Bank of Commerce (CIBC)
  • National Bank
  • Royal Bank of Canada (RBC)
  • Bank of Nova Scotia (Scotiabank)
  • Toronto Dominion Bank (TD)

control 93 per cent of all banking assets, and are more profitable than comparable banks in other countries, and than small banks in Canada, and Canada’s corporate sector overall. The big banks control of the market essentially allows them to gouge and abuse customers with excessive fees, high interest rates (especially on credit cards). As a result, government regulation is needed to stop them.

The federal government bailed out the banks with $114 billion in mortgage purchases during the financial industry fraud crisis in 2009. It hasn’t required the banks to do anything in return for that bailout, or for the protections from foreign competition that the government has given the banks since 1967.

Canada’s big banks also paid their CEOs about $12.5 million each in 2019 in salary and bonuses (55% higher than in 2008).

According to Fortune magazine’s Global 500 for 2017, three of Canada’s Big Six Banks ranked in the top 500 based on their revenues but are in the top 90 most profitable companies in the world: Royal Bank ($8.735 billion in 2017 profits; ranked #55 in total profits, #292 in revenue); TD Bank ($7.947 billion in 2016 profits; ranked #65 in profits, #337 in revenue); Scotiabank ($6.12 billion ranked #88 in profits, #430 in revenue). The profits of all three, and the other three Big Six Banks in Canada, all increased in 2018 and 2019 so they were all ranked even higher in the Global 500 for 2019. The three banks were the most profitable of the 11 Canadian companies in the Global 500 for 2017.

The federal government also continues to refuse to make the Big Banks pay their fair share of taxes to help pay the costs of the crisis. Canada’s Big Banks paid a tax rate of only 16% over the past 6 years — lower than banks in other G7 countries. The Big Banks also exploit tax loopholes more more than all other Canadian big businesses.

For more information, see Democracy Watch’s
Big Bank Coronavirus Accountability Campaign

Backgrounder – Full List of Key Bank Accountability Changes

(April 2020)

Democracy Watch’s letter-writing campaign and petition call for the following key bank accountability changes needed to make Canada’s Big Banks give everyone a break on interest rates and fees, pay their fair share in taxes, and treat everyone fairly, now and after the coronavirus crisis is over:
  1. Require banks to cut all their interest rates and fees in half now, and to cut loan payments entirely for anyone who needs it for the next few months, without requiring payment or extra interest later;
  2. Require banks to disclose the profit level of every part of their business (credit cards, mortgages, lines of credit, each other type of loan, bank machines, and investment and insurance divisions) after fully independent audits (overseen by the Auditor General);
  3. Require banks to keep all their interest rates and fees at a level that gives them no more than a reasonable profit (for example, many U.S. states cap credit card interest rates);
  4. Require banks to disclose detailed information how many people and small businesses apply for credit cards and loans or all types, and loan interest rate cuts or other relief, and accounts, and how many are approved and rejected, by type of borrower and customer, and require corrective actions if a bank discriminates against any type of borrower or customer (as the U.S. has required banks to do for 30 years);
  5. Require the Big 6 Banks re-open basic banking branches in neighbourhoods where they closed them in the 1990s to help get rid of predatory pay-day loan companies (and low-cost banking at Canada Post outlets should also be allowed);
  6. Require banks, trust and insurance companies to promote in their mailings and emails to customers that they can join an independent, consumer-run Financial Consumer Organization (FCO – as recommended in 1998 by the MacKay Task Force, and the House Finance and Senate Banking committees) so consumers have a place to call for help if they are gouged or treated unfairly, and to get fully independent, expert advice (See details at: https://democracywatch.ca/question-and-answers-about-the-proposed-financial-consumer-organization/);
  7. Strengthen key consumer protection rules, and require the Financial Consumer Agency of Canada (FCAC) to do unannounced, mystery-shopper audits to find violations, and to identify violators and fine them (the FCAC hasn’t done unannounced audits since 2005, tipped off the banks in March 2017 about the audit they did through the rest of 2017 on abuses, and then allowed the banks to see the draft audit results and suggest changes that weakened the report);
  8. Require all banks to be covered by the Ombudsman for Banking Services and Investments (the Finance Minister has done nothing to require TD, Royal, Scotiabank or National Bank to stop using their own complaint judges and return to OBSI) and make OBSI’s rulings binding;
  9. Require the FCAC to name every bank and financial institution that it finds has violated any rule and, given the big banks each make billions in profit annually, to fine violators a minimum of $1 million on a sliding scale for various violations, and increase the maximum fine for violations to $50 million, which should be high enough to discourage violations;
  10. Close all the loopholes that allow Canada’s banks (and other big businesses) to evade paying taxes in Canada by pretending they make their money through companies they own in low-tax countries, and impose a special tax (as England and Australia have) on any Canadian business or bank that has excessively high profits like Canada’s Big Banks have had in the past several years, and;
  11. 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).
For more information, see Democracy Watch’s
Big Bank Coronavirus Accountability Campaign

Petition calls on federal parties to Make the Big Banks Help more during the coronavirus crisis, and after

Big Banks’ temporary mortgage and loan deferrals, and cuts to some credit cards and fees, for some customers are not enough – key measures needed to ensure fair interest rates, fees and treatment of all customers now, and into the future

Big 6 Banks gouged out record profits of more than $46 billion in 2019 – their 10th year in a row of record profits – so they can afford to help more, as PM said yesterday

Loopholes also must be closed to ensure banks pay fair share of taxes

FOR IMMEDIATE RELEASE:
Tuesday, April 7, 2020

OTTAWA – Today, Democracy Watch launched a letter-writing campaign and Change.org petition calling on all federal parties to work together in this minority government situation to make Canada’s big banks do more to help Canadians and small businesses, and pay their fair share of taxes, now and after the coronavirus crisis.

The call comes as Canada’s Big 6 Banks have once again reported record profits of more than $46 billion in 2019 – the 10th year in a row, and more than double their 2010 profits. The Big 6 Banks have reaped record profits every year for the past 10 years in part by firing thousands of people, shifting jobs overseas (or using temporary foreign workers), cutting services, and hiking fees and credit card interest rates even as the Bank of Canada’s prime rate dropped to record low levels.

The Big 6 Banks also paid their CEOs a total of $75 million in 2019 in salary and bonuses (an average of $12.5 million). (See Canada’s Big Banks Backgrounder)

The campaign launches as Finance Minister Bill Morneau is boasting that the federal government has negotiated with the Big 6 Banks to temporarily cut some credit card interest rates for some customers (but no small businesses) who request a deferral for a couple of months, and to process small business loans funded by the government, in addition to the mortgage and loan deferrals and fee reductions the banks have already offered (but again, only for some customers, with the delayed amount still required to be paid later, plus interest).

Prime Minister Trudeau stated on April 6th that “we need to see even more action like this going forward because this is a time to think about each other, not about the bottom line.”

Just like the initial spending actions taken by the federal and provincial governments were not enough to address the coronavirus crisis, the banks must do more. The Big 6 Banks’ decade of record profits and cuts to their prime lending rates show that they can afford to cut interest rates much more on loans like mortgages etc., and also to cut fees much more, and not raise them again to their gouging, excessive profit levels.

All federal parties need to work together now to require the banks:

  1. To cut all their interest rates and fees in half now, and cut loan payments entirely for anyone who needs it;
  2. To disclose detailed profit reports after fully independent audits and keep rates and fees at reasonably low levels in the future;
  3. To empower consumers and increase consumer protection by supporting the creation of an independent, consumer-run bank watchdog group (as recommended by MPs and senators in 1998);
  4. To disclose approval rates for credit, loans and accounts by neighbourhood and type of borrower, and require corrective actions by any bank that discriminates (as the U.S. has required for 30 years);
  5. To re-open basic banking branches in neighbourhoods where they closed them in the 1990s to help get rid of predatory pay-day loan companies (and banking at Canada Post outlets should also be allowed);
  6. To cut bank executive pay down to a reasonable level;
  7. To pay their fair share of taxes now, and in the future, by closing all the loopholes they exploit (as England and Australia have), and;
  8. Finally, enforcement measures and penalties also need to be strengthened to ensure banks, and other financial institutions, serve everyone fairly and well at fair prices (See Backgrounder on Weak Enforcement)
    (See Full List of Key Bank Accountability Changes).

“The federal Conservatives and Liberals did nothing to stop Canada’s big banks from hiking fees and credit card interest rates to gouge Canadians and more than double their profits since 2010 to the highest levels of banks world-wide, while reducing service, treating many customers unfairly, and exploiting loopholes to lower the amount they pay in taxes,” said Duff Conacher, Co-founder of Democracy Watch. In this time of crisis, and with the minority government, all parties must work together to make key changes to make banks help more now, to finally stop their excessive profits, gouging and abuse of consumers, and to make banks pay their fair share in taxes.”

“Because the big banks control more than 90 percent of the banking market in Canada they can hike fees and interest rates whenever they want, and treat customers however they want, and so the federal government must finally make key changes to protect 30 million bank customers from gouging and abuse during this crisis, and into the future,” said Conacher. “Every dollar of excessive profit for the banks, and every person and business the banks unjustifiably cut off from credit, costs the Canadian economy because it means that the banks are overcharging for their essential services and loans, and choking off the spending and job creation that will help Canada recover from this crisis.”

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FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
Email: info@democracywatch.ca

Democracy Watch’s Big Bank Coronavirus Accountability Campaign

Democracy Watch pursuing lawsuit challenging Ethics Commissioner’s ruling that let everyone off except PM Trudeau for pressuring Attorney General to stop SNC-Lavalin prosecution

Case also raises Ethics Commissioner Dion’s bias in ruling – Trudeau Cabinet chose him after secretive process

RCMP and prosecutors must explain publicly if they decide not to charge PM Trudeau and others with obstruction of justice

FOR IMMEDIATE RELEASE:
Tuesday, March 3, 2020

OTTAWA – Today, Democracy Watch released the application it is pursuing in the Federal Court of Appeal challenging federal Conflict of Interest and Ethics Commissioner Mario Dion’s ruling that let everyone off the hook, except Prime Minister Trudeau, for pressuring former Attorney General Jody Wilson-Raybould to stop the prosecution of SNC-Lavalin by the Public Prosecution Service of Canada (PPSC). Daniel Tucker-Simmons of Avant Law is representing Democracy Watch in the case, Federal Court of Appeal File #A-331-19.

DWatch is challenging this part of the ruling in court because in paragraphs 262-281 (pages 41-44) the Ethics Commissioner summarizes the actions of PMO officials, Cabinet ministers and their staff that put pressure on the Attorney General. However, in paragraphs 282-286 (page 44), the Ethics Commissioner then excuses the actions of everyone except Prime Minister Trudeau on the very questionable basis that the other officials “could not have influenced the Attorney General” and were acting “under the direction or authority of the Prime Minister…”

As the Ethics Commissioner ruled, by attempting to influence the Attorney General PM Trudeau violated section 9 of the Conflict of Interest Act. Other officials also attempted to influence the Attorney General. It is irrelevant whether they had the same power over the Attorney General as the PM has.

“The Ethics Commissioner made the right ruling by finding Prime Minister Trudeau guilty of violating the ethics law for pressuring the Attorney General to drop the prosecution of SNC-Lavalin, but he should have also found other PMO and government officials guilty because they also pressured the Attorney General,” said Duff Conacher, Co-founder of Democracy Watch. “The Ethics Commissioner’s ruling set a dangerous precedent because it says Cabinet staff aren’t covered by the federal ethics law, and can do things that Cabinet ministers are not allowed to do, and that’s why Democracy Watch is challenging the ruling.”

Democracy Watch is also arguing that Ethics Commissioner Dion should have delegated the investigation and ruling on the situation to a provincial ethics commissioner who had no ties to any federal party, given that he was chosen by the Trudeau Cabinet after a secretive, Cabinet-controlled process that failed to consult with opposition parties as required by the Parliament of Canada Act. Mr. Dion also had a record 8 unethical and questionable actions when he was federal Integrity Commissioner.

“Ethics Commissioner Dion should not be ruling on any situations involving Liberals as he was hand-picked by the Trudeau Cabinet through a secretive, very questionable process, and has an unethical past enforcement record, and so he should delegate investigations to a provincial ethics commissioner,” said Conacher.

Given the evidence in the Ethics Commissioner’s ruling from last August, Democracy Watch also continues to call on the RCMP and Crown prosecutors to issue a full, public explanation if they decide not to prosecute Prime Minister Trudeau and others for obstruction of justice. “Given the evidence, the public has a right to know the reasons if the RCMP and prosecutors decide not to prosecute anyone,” said Conacher.

After the Globe and Mail first reported the allegations on February 7, 2019 that members of the PMO pressured the Attorney General to intervene, Democracy Watch filed a letter the next day with Ethics Commissioner Dion requesting an investigation only of members of the Prime Minister’s Office (PMO). Ethics Commissioner Dion sent Democracy Watch a letter on February 26th confirming his investigation of its complaint.

Former Attorney General Jody Wilson-Raybould testified before a House Committee on February 27, 2019 and claimed other people – Finance Minister Bill Morneau, some of his staff, PCO Clerk Michael Wernick, and other PMO staff – also tried to influence her. Democracy Watch then sent a letter on March 5, 2019 requesting that the Ethics Commissioner expand his inquiry to cover these people.

Green Party leader Elizabeth May also sent a letter to the Ethics Commissioner on May 2, 2019 requesting an inquiry into all the people named by the former Attorney General.

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FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
Email: info@democracywatch.ca

Democracy Watch’s Government Ethics Campaign