Canadians Question Why Banks Are Raising Fees Amid Pandemic, Billion Dollar Profits

At least four Canadian banks are raising their fees, at the same time they are raking in record profits and customers are struggling through the pandemic, CBC reports.

Customers with TD, CIBC, Bank of Montreal and Scotiabank have each contacted CBC’s investigative team about bank fees that have recently increased, or are about to, for a range of accounts, products and services. 

Duff Conacher, a co-founder of Democracy Watch, a citizen group calling for government accountability and corporate responsibility, is also a TD Bank customer.

Conacher told CBC the bank is raising the minimum balance required for avoiding fees from $2,000 to $5,000 on the “preferred chequing” account.

“In an environment where people have lost their jobs, they’re on furlough, they’re trying to get CERB payments, who’s going to be able to keep $5,000 in their bank account to not get service fees?” he told CBC.

Conacher also said TD is raising transaction fees on those accounts from $1.25 to $1.95 for every transaction, even on debit cards, and fees for overdraft protection.

TD’s reported net income is up from 2019, CBC reported, with the bank disclosing $3.2 billion in net income for this year’s first quarter profits alone.

The new fees come as each of the big five banks reported billions in profit for the first quarter, with profits higher than the same period last year for all five. 

Bank of Montreal reports $2 billion in net income, Royal Bank of Canada reports $3.8 billion, Scotiabank has $2.4 billion and CIBC has $1.6 billion.

Conacher said Democracy Watch had collected nearly 80,000 signatures on a petition asking Ottawa to force the banks to do more to help Canadians during the pandemic.

The citizen group is calling on Ottawa to change the Bank Act, and is pushing to see built-in independent audits of every division of the banks to determine if they are taking in more profit than is fair.

“If it’s more than a reasonable profit margin of 10 to 15 percent, then the banks should be forced to lower their fees and interest rates to a reasonable level,” Conacher told CBC.

The group said it hasn’t seen any action from the government so far. The government told CBC it could not address questions on what it was going to do about banks’ fee increases. 

TD encouraged customers worried about fees to contact it about options available. The new fees go into effect in one week. 

What do you think about Canadian banks raising their fees right now? Let us know in the comments! 

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