No measures in budget, like England and Australia have, to ensure banks pay fair share of taxes, despite gouging profits since 2010
Also no measures, like the U.S. enacted 40 years ago, to stop racism and discrimination in bank lending
As PM Trudeau said April 6, 2020, the Big Banks can afford to help more
FOR IMMEDIATE RELEASE:
Wednesday, April 21, 2021
OTTAWA – Today, Democracy Watch, along with the more than 110,000 people from across Canada who have joined its letter-writing campaign and/or signed its Change.org petition, criticized Finance Minister Chrystia Freeland budget for failing to make Canada’s big banks to pay their fair share of taxes, as England and Australia have, and failing to enact measures, like the U.S. did 40 years ago, to stop discrimination in lending by the big banks.
One year ago, on April 6, 2020, after the Big 6 Banks announced temporary mortgage and loan payment deferrals, and credit card interest rate cuts, for only some customers, Prime Minister Trudeau said that “we need to see even more action like this going forward because this is a time to think about each other, not about the bottom line.” However, the deferrals and cuts for some bank customers ended last fall, and the banks have not given any breaks since.
Democracy Watch’s submission to Finance Canada’s pre-budget consultation process called for key bank accountability changes needed to make Canada’s banks to pay their fair share in taxes, to stop racism and discrimination in lending and services, and to stop gouging and other abuses.
Many of the 8 key changes were enacted in the U.S. decades ago, and apply to the U.S. banks that 4 of Canada’s Big 6 Banks own, including the Community Reinvestment Act that requires disclosure of bank lending by race, gender, income level and neighbourhood, and corrective action if a bank is discriminating against borrowers.
In contrast, the Trudeau Liberals have done very little to address discrimination in bank lending, and nothing to stop gouging of all customers.
Recently, associations representing Black and Indigenous business owners called for the U.S. measures to be enacted in Canada to stop discrimination in bank lending.
The budget also failed to impose an excess profits tax on the banks, as England and Australia have. Canada’s Big 6 Banks reported a 14% increase in their 2021 first-quarter profits, and also still very high profits in 2020 totalling $41.13 billion, just $5.1 billion (12%) less than in 2019. The Big 6 had record profits of more than $46 billion in 2019 – for 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 2020, and are the 15th (RBC), 20th (TD), 32nd (Scotiabank) and 50th (BMO) most profitable financial institutions in the world, and the four most profitable Canadian companies in the Global 500 (See Canada’s Big Banks Backgrounder).
The Big 6 Banks also paid their CEOs a total of $75 million in 2019 in salary and bonuses (an average of $12.5 million each), and a total of $66.4 million in 2020 ($11 million each on average).
“The big banks must be required by law, as banks have been in the U.S. for 40 years, to disclose much more information about how they treat customers and borrowers to ensure they don’t discriminate against anyone,” said Duff Conacher, Co-founder of Democracy Watch.
“Canada’s big banks have also gouged out record high profits for the past decade, and are among the most profitable banks in the world, so measures are needed to stop the gouging,” said Conacher. “The banks are also the biggest business tax evaders in Canada, so measures are needed like England and Australia have to close tax loopholes and ensure they pay their fair share of taxes.”
The Big 6 Banks continue to reap high profits by firing thousands of people, shifting jobs overseas (or using temporary foreign workers), cutting services, and hiking fees and credit card interest rates even as the Bank of Canada’s prime rate dropped to record low levels.
More than 110,000 voters are calling on federal parties to work together now to enact Key Bank Accountability Changes to stop discrimination in lending, gouging and other abuses, and ensure the banks pay their fair share in taxes.
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FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Email: [email protected]
Democracy Watch’s Big Banks Coronavirus Accountability Campaign