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Advocating for stronger, more effectively enforced accountability measures for Canada’s big banks and other financial institutions

Please send your letter now using the form on this page, and please help spread the word by Liking and Tweeting this page.

Bank Accountability Campaign 1993-2011 archive (archive website)

The Opportunity

While millions of Canadians and hundreds of thousands of small businesses were suffering from the coronavirus crisis, Canada’s Big 6 Banks gouged out record profits of more than $46 billion in 2019 and more than $41 billion in 2020 and more than $57 billion in 2021!

That works out to almost $28 million in profit every hour banks are open – almost triple their profits in 2010!

While the Big Banks’ profits dropped a little bit (12% overall) in 2020, from 2010 to 2019 the Big Banks’ profits increased every single year, and increased again in 2021 by more than 40% compared to 2020!

The heads of the Big 6 Banks were also paid a total of $75 million in 2019 ($12.5 million each on average), and a total of $66.4 million in 2020 ($11 million each on average), and a total of $74.4 million in 2021 ($12.4 million each on average).

Canada’s Big Banks make among the highest profits of any banks in the world because the federal government has protected them from competition and bailed them out and given them many favours over the past 50 years. The Big Banks have reaped their record profits every year for the past 10 years in part by:

• firing thousands of people;
• cutting services, and;
• hiking fees and credit card interest rates to gouge you even more than they were already.

The Finance Minister is reviewing Canada’s banking law right now – so please help make your voice heard by sending your letter now using the form on this page, and Liking and Sharing this page.

In a Fall 2016 public consultation report, the federal government points to all these problems — including the fact that Canada’s big banks control more than 90% of the banking market in the country, which gives them even more power to gouge and treat business and individual customers unfairly.

But still the federal government continues to fail to require the banks serve everyone well at fair prices, or to require responsible lending and investing, even though the government gave the banks a record $114 billion bailout in 2008-2009 (most of it by having CMHC purchase mortgages from the banks), and even though the federal government will likely bail out the banks again if they have any financial difficulties.

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 than all other Canadian big businesses.

The Big Banks must be required:

1. To cut all their interest rates and fees in half now;
2. 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. 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 limit credit card interest rates);
4. To disclose how many people and small businesses apply and are approved or rejected for loan cuts, low-interest credit cards, other loans, by type of borrower (as the U.S. has done 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 low-cost banking at Canada Post outlets should also be allowed);
6. To support the creation of an independent, consumer-run financial consumer watchdog group (as recommended in 1998 by MPs and senators) so consumers have a place to call for help if they are gouged or treated unfairly, and to get fully independent, expert advice;
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. To cut the pay of their CEO and other top executives to no more than 40 times their lowest paid employee.

Enforcement measures and penalties also need to be strengthened to ensure the banks don’t ever gouge, rip-off or treat their customers unfairly, and pay high penalties if they do. Enforcement is much stronger in England and the U.S.

In addition, the federal government has an ongoing public consultation process on the review process for bank mergers.

No matter what issue or problem concerns you, strengthening the federal bank accountability systems will help you win the changes and solutions you are pushing for.

Now is a key time to send a strong message to the leaders of all the federal political parties that you are fed up with the dishonest, unethical, secretive, unrepresentative, and wasteful actions of bank executives and you want key changes to make everyone involved in Canada’s big banks act honestly, ethically, openly, responsibly and to prevent waste.

On bank honesty, ethics, openness, responsibility and waste prevention reforms, the federal government has not heard from citizens or citizen groups enough to counter the power of bank lobby groups.  It is important that you let the government know that you want significant bank accountability reforms.

Canada’s big banks spend about $500 million annually on their lobbying, protection and promotion efforts (advertising, lawyers etc.), including having about 100 full-time lobbyists across the country. In contrast, there are only about 5 citizen group lobbyists spending only about $50,000 annually on bank accountability efforts. As a result, Canadians must all work together and push hard if there is any hope to counter the bank lobby and win key bank accountability changes.

Democracy Watch and the nation-wide Canadian Community Reinvestment Coalition (CCRC) that it coordinates, made up of 100 citizen groups from across Canada with a combined total membership of more than 3 million Canadians, are leading the push for key accountability reforms in Canada.

Background

The bank mergers proposed in 1998 were stopped, but TD Bank was allowed to take over Canada Trust in February 2000, banks and other financial institutions continue to provide poor service to many Canadians, and bank mergers will likely be proposed in the future.

The federal government released a policy paper on financial services at the end of June 1999, and introduced draft legislation in the form of Bill C-38 on June 13, 2000, but Bill C-38 was derailed by the fall 2000 federal election.

Bill C-38 was re-introduced as Bill C-8 in February 2001, and was passed by Parliament in June 2001.

Bill C-8 contained some good measures, but left some key gaps in bank regulation (For details, see Comparison Between Bill C-8 and CCRC Recommendations).

In late 2006, the federal government introduced Bill C-37 (which passed in April 2007) but it contained a couple of ineffective measures that only slightly increase bank accountability in Canada (For details, see the CCRC’s Analysis of Bill C-37).

In 2012, Bill S-5 was passed, but all it did was strengthen a couple of measures and increase penalties from $250,000 maximum to $500,000 maximum (which is much too low).

In December 2018, the Trudeau Liberals quickly passed budget Bill C-86 which contained some measures to strengthen financial consumer protection but did nothing to stop gouging by Canada’s big banks.