(August 2025)

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 145 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 totalling just $20 million since 2001 in the 145 rulings it has issued.

In contrast, since 2013 when it was created until the end of 2024, Britain’s Financial Conduct Authority (FCA) issued penalties totalling 4.76 billion pounds ($8.86 billion Can.), and since 2011 when it was created up to January 2025, the U.S. Consumer Financial Protection Bureau (CFPB) imposed penalties totalling $24.7 billion U.S. ($34.1 billion Can.).

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 former Finance Minister Bill Morneau, did nothing, and current Finance Minister Chrystia Freeland moved as slowly as possible 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 — which finally happened in November 2024).

All banks and investment companies should be required to use OBSI, and allow financial consumers and investors to complain directly to OBSI without having to go through a financial institution’s internal complaint system, 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 that use their own complaint judges.

And while the maximum fine allowed under the Bank Act was finally increased in 2018 to the meaningful penalty of $50 million, it is very unlikely the FCAC or a court will ever impose the maximum fine so they must be required to impose a minimum fine of at least $1 million for each violation, and a sliding scale of required penalties for more serious violations up to the $50 million maximum fine for the most serious, systemic violations.

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/). Also, banks and the largest mutual fund companies must be required to promote in their mailings and emails to customers that they can join an independent, consumer-run Individual Investor Organization (IIO – as recommended by an Ontario legislative committee in 2006) so they have have a place to call for help if they are ripped off or treated unfairly, and to get fully independent, expert advice (See details at: https://democracywatch.ca/question-and-answers-about-individual-investor-organization-iio/).

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

Sorry, this entry is only available in Français.

(December 2025)

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 20 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 6 Banks reported, yet again, excessively high annual profits totalling $70 billion in 2025, almost $50 billion higher than their 2010 profits, all reaped through gouging their customers with excessively high credit card and other credit interest rates and mutual fund and other banking fees.

The banks gouged all Canadians who had loans back in 2015 by failing to lower their interest rates as much as the Bank of Canada had lowered its interest rate, and then the banks abused everyone with savings accounts by failing to increase their deposit account interest rates as much as the Bank of Canada when it began raising its interest rate in 2022.

Canada’s Big 6 Banks also paid their CEOs an average of $11 million each in 2023, and the average increased to $12.3 million in 2024 – 55% higher than in 2008).

Canada’s Big 6 Banks also handed out $27.3 billion in 2025 in bonuses to their employees.

The federal government also continues to refuse to make the Big Banks pay their fair share of taxes. Canada’s Big Banks pay a tax rate of only 16% — lower than banks in other G7 countries. The Big Banks also exploit tax loopholes more more than all other Canadian big businesses. England imposed a permanent annual excess profits tax on its banks in 2011, and Australia did the same in 2017.

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