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Backgrounder – Canada’s Big Banks

(December 2023)

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 $58.3 billion in 2023 and record total profits of $61 billion in 2022, almost triple 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.

Four of Canada’s Big 6 Banks are listed in Fortune ’s Global 500 for 2023 (based on 2022 profits), and TD, RBC, Scotiabank and BMO were also in the top 35 most profitable financial institutions in the world in 2022 (more profitable than most other larger banks) and two banks are among the five most profitable Canadian companies in the Global 500.

Canada’s Big 6 Banks also paid their CEOs a total of $73.3 million in 2022 (an average of $12.2 million each – 55% higher than in 2008) and in 2023 handed out $21.2 billion total in bonuses to their employees. The Big Bank CEOs and employees were given these huge salaries and bonuses even though customer complaints about bank interest rates fees and poor service increased in 2023.

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