(English) While millions of Canadians and hundreds of thousands of small businesses are suffering from the coronavirus crisis, Canada’s Big 6 Banks gouged out record profits of more than $57 billion in 2021!
That works out to almost $28 million in profit every hour banks are open – almost three times higher than their profits in 2010.
The big banks also paid their CEOs $12.4 million each on average in 2021.
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 also reaped their record profits every year for the past several years in part by:
– firing thousands of people;
– cutting services, and;
– hiking fees and credit card interest rates to gouge Canadians even more than they were already (even though interest rates have dropped to record low levels).
The federal government has failed in the past 30 years to stop the Big Banks from gouging their customers and treating them unfairly.
Now, with the coronavirus crisis hurting millions of Canadians, and even though the Big Banks can afford it, the federal government still hasn’t made the Big Banks give everyone a break by cutting their gouging interest rates and fees, and stopping loan payments for the next few months if needed (without requiring them to be paid after).
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:
- 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;
- To disclose the profit level of every part of their business after fully independent audits (overseen by the Auditor General);
- To keep all their interest rates and fees at a level that gives them no more than a reasonable profit;
- 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, and require corrective actions if a bank discriminates against any type of borrower (as the U.S. has done for 30 years);
- 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);
- To support the creation of an independent, consumer-run financial consumer watchdog group (as recommended in 1998 by MPs and senators);
- 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;
- 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.
I join with thousands of Canadians in calling on all federal political parties to make the following key fair banking changes now:
- 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;;
- 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);
- Require banks to keep all their interest rates and fees at a level that gives them no more than a reasonable profit;
- 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);
- 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);
- 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/;
- 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, and tipped off the banks in March 2017 about the audit they did through the rest of 2017 on abuses);
- 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 the Ombudsman’s rulings on every complaint by bank customers and investors binding so financial institutions are required to pay whatever penalty the Ombudsman imposes;
- 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, increase the maximum fine for violations to $50 million, which should be high enough to discourage violations;
- 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 (like 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;
- 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.
I will be deciding which party to vote for in the next election based how much each party does to make these key changes 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.