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Backgrounder – Canada’s Big Banks

(April 2022)

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 still high profits in 2021 totalling $57.7 billion, $16.55 billion (40%) more than in 2020 (BMO – $7.75B; CIBC – $6.4B ; National – $3.18; RBC – $16.1B; Scotiabank – $9.95B; TD – $14.3B).The Big 6 had record profits of more than $46 billion in 2019 – the 10th year in a row, and more than double their 2010 profits.

Four of Canada’s Big 6 Banks are listed in 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, and are four of the five most profitable Canadian companies in the Global 500.

Canada’s Big 6 Banks also paid their CEOs a total of $74.4 million in 2021 (an average of $12.4 million each) in salary and bonuses (55% higher than in 2008).

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. 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
Big Bank Coronavirus Accountability Campaign