Canadians paying billions in `excess' bank fees: report
As the federal government pushes to reduce bank fees, a report from consultancy North Economics figures Canadians are overpaying by billions of dollars a year.
The report by the Alberta-based firm compared fees at the Canadian Big Five banks — Royal Bank of Canada, Toronto-dominion Bank, Bank of Montreal, Canadian Imperial Bank of Commerce and Bank of Nova Scotia — with what consumers face in the U.K. and Australia.
It shows that Canadians pay much more per month for bank accounts, as well as for fees for non-sufficient funds, overdraft charges, and accessing ATMS at competitor banks.
To get a sense of just how much more Canadians pay, North Economics managing director Alain de Bossart looked at how Canadian and British non-interest retail bank profits compare with their deposits. The measure excludes interest-based profits from mortgages and other loans.
Using the retail banking profits to deposits ratio for 2022, he found that Canada's five biggest banks had $7.73 billion in “excess” income. The number works out to about $250 per Canadian.
“Canadian banks have done a very good job of extracting as many fees out of people as possible,” said de Bossart.
He said he's been wanting to delve into the issue since moving to Canada from the U.K. about seven years ago.
“The first thing that struck me was that you pretty much have to pay a monthly fee, for just allowing a bank to hold your day-to-day deposits,” said de Bossart.
“In the U.K., you can hold multiple bank accounts with multiple banks, and expect to pay no monthly charges at all for a bank account that allows you to do everything you would reasonably expect to do in a month.”