Democracy Watch is calling on the Trudeau Liberals to keep all five of their 2021 election promises to increase bank accountability in Canada, saying the government partially fulfilled two and abandoned the rest.
All five promises were listed in the finance minister’s mandate letter.
First, the Trudeau Liberals imposed a temporary excess profits tax on banks and insurance companies that earn more than $1 billion a year (of 15%, but for one year only in 2022), and an increase in their annual tax rate of 1.5%. However, the Liberals promised they would impose a higher 3% increase in the annual rate (England imposed a more than 8% tax hike on banks in 2011, and Australia increased its bank tax rate in 2017).
Second, on November 1, 2024, the Trudeau government finally required all banks to use the Ombudsman for Banking Services and Investments (OBSI) as the complaint-appeal entity. However, Democracy Watch complains the Liberals are breaking their promise to give OBSI “the power to impose binding arbitration.”
Third, the Liberals also said the Financial Consumer Agency of Canada (FCAC) would “review the prices charged by banks and impose changes if they are excessive” (and review interest rates, as Australia did in 2017). Instead, the FCAC is only reviewing one gouging bank fee and consulting on low-cost, small-value credit.
Fourth, the Liberals said they would require financial institutions to offer options to delay consumer debt payments when needed. Instead, Democracy Watch says, the Liberals have only issued unenforceable mortgage guidelines and an unenforceable mortgage charter.
Fifth, the Liberals have not finished a review on closing tax loopholes to prevent banks and other financial institutions from pretending to make their money in low-tax countries in order to lower the taxes they pay in Canada. The Liberals promised to close the tax loopholes.
In a press release, Duff Conacher, Co-founder of Democracy Watch, said “As usual, the Trudeau Liberals spouted half-truths" in their election platform.
“The Liberals continue to protect the big bank’s gouging profits and their executives’ excessive multi-million salaries instead of making the changes needed to stop banks from gouging billions from their 30 million customers and to protect bank customers from discrimination and other abuses," Conacher said.
“Every dollar of excessive profit for the banks, and every person and business the banks unjustifiably refuse to loan to, costs the Canadian economy because it means that the banks are overcharging for their essential services and loans, and choking off job creation and spending,” added Conacher.
Canada’s big six banks reported, yet again, high annual profits totalling $51.28 billion in 2024, $30 billion higher than their 2010 profits.
Five of Canada’s big six banks are listed in Fortune’s Global 500 for 2024 (based on 2023 profits), and RBC, TD and Scotiabank were also in the top 35 most profitable banks in the world in 2023 and RBC, TD and Scotiabank were among the top five most profitable Canadian companies in 2023.
Canada’s big six banks also paid their CEOs an average of $11 million each in 2023, and the average increased to $12.3 million in 2024 – 55% higher than in 2008). They handed out $23.75 billion in bonuses to their employees in 2024.
Democracy Watch complains that none of the federal parties have shown concern for rampant online banking fraud and the fact that the banks often blame their customers for the fraud and refuse to compensate them for lost money even if the fraudsters do account transactions that the customer has never done. Democracy Watch wants the Bank Act changed to ensure customers are compensated if they don’t have adequate safeguards to prevent fraudulent account transactions.
