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Banks

COVID-19

As we are regularly reminded, Canadian banks are very stable.

Clearly, then, the banks had the financial stability to give people a real mortgage holiday when the pandemic hit, with no accumulating interest or massive lump sum payments.

For that matter, the Federal Government had the authority to force them to do it. Surprise, surprise, neither group stepped up.

Unacceptable. Time for the banks to step up and truly help Canadians. If they won’t, then it’s time for the Federal Government to make them. And by ‘make them’ we don’t mean guarantee all the banks’ loans backed by taxpayer money, which is usually where these programs end up.

In short, the banks need to do their share.

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The Big Six Canadian banks have had it really good for a really long time in this country. However, in return for the privileged and protected status they enjoy in Canada, Banks seem to think it is enough to offer:

  • obscenely high fees on everything from chequing accounts to mutual funds;
  • sky high interest rates on credit cards;
  • pathetically low savings account interest rates;
  • government backed, consumer financed, no-risk-to-the-bank insurance on billions in mortgages through the Canada Mortgage and Housing Corporation (CMHC); and
  • no competition!

To add insult to this financial injury, the Big Six proudly announce to the world how many billions they have made in pure profit every three months (every three months!). 

Banks are in this for the banks

Contrary to what their friendly ‘we are in this together’ advertisements suggest, banks are in this for the banks, and not for you. The Big Six Canadian Banks are international mega-corporations and, like all international mega-corporations, have a singular focus: to make a profit.

We can’t blame them for this. All corporations are meant to make a profit. But we can expect that companies protected and sheltered by Canadian law (like the Big Six), and companies that benefit from billions of dollars in government backed loans (like the Big Six), should be working, at least to some extent, for the benefit of all Canadians and not just the people who own shares in the banks.

One way the banks can benefit the rest of us is if they were forced to compete for our business, rather than take us for granted as they do now. That way, we might at least have a chance of experiencing reasonable rates and service.

Compete? Why would they do that?

The truth is the Big Six banks do not compete or fight for your business, because they have never needed to. They are one of several oligopolies in Canada and, like the other oligopolies (cellular phone companies, airlines…the list goes on!), they dominate their industry. As a result, we simply don’t have the choice and the banks know this.

So, what can we do?

Take Action

We can start by expecting more. Once we have made that shift in our thinking, and we realize that we deserve more, then we can get together and demand more.

Connect with other Canadians, and demand more from your elected officials, who are the only ones with the power to force the changes we want.

Ultimately, it is your responsibility to tell the elected officials what you want. It is their responsibility to make it happen. Assuming, of course, they want to get re-elected.

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