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UPDATE: The Council of Canadians campaign to stop bank mergers in 1998

Then-executive director Peter Bleyer on a billboard (which stood across the street from then-finance minister Paul Martin’s office) opposing bank mergers.

Then-executive director Peter Bleyer on a billboard (which stood across the street from then-finance minister Paul Martin’s office) opposing bank mergers.

Today, Globe and Mail business reporter Michael Babad wrote, “The International Monetary Fund today took a deeper look at why banks in Canada and a handful of other countries withstood the 2008-2009 meltdown, which could provide lessons going forward. …The IMF said the Canadian and Australian regulatory structures ‘share some features that might have resulted in less globally integrated banking systems’. Notably, the two countries share a ‘de facto’ ban on big bank mergers. …Then Liberal finance minister Paul Martin rejected two huge mergers in the late 1990s – RBC with BMO, and CIBC with TD – and nothing has changed since despite the ascension of the Conservatives. Mr. Martin killed the proposed mergers on grounds that there would be too much power in the hands of too few banks, reduced competition, and troubles for the government when problems arose.”

This news article fails to recognize the critical role played by the hard-fought Council of Canadians campaign to ‘Stop the Mergers’ in 1998.

In the Autumn 1998 issue of Canadian Perspectives, Council of Canadians chairperson Maude Barlow wrote, “We feel that this is an issue dear to our members’ hearts. We must make it politically impossible for Paul Martin to approve these mergers and open up our borders to foreign banks. We need to set the tone for public dialogue on how our financial institutions can be compelled to serve our communities.” To read more about the Council of Canadians campaign against bank mergers, go to http://canadians.org/archive/documents/bank_mergers.pdf.

On December 14, 1998, we won when then-finance minister Paul Martin rejected the proposed mergers of the Royal Bank with the Bank of Montreal and CIBC with the Toronto-Dominion Bank.

This is not the first time that the history of the bank merger fight has been somewhat re-written. In October 2008, the Canadian Press reported, “Canada’s banking system is weathering the economic storm engulfing the global financial sector because of Liberal government policies he enacted more than a decade ago, former prime minister Jean Chretien said. Chretien reminded his audience that he took a lot of flak for his position.”

Where are we now on the issue of bank mergers?

The issue resurfaced in December 2006 when the Globe and Mail reported that David Dodge, then-governor of the Bank of Canada, ‘seemingly hinted’ his support for bank mergers in Canada. Reuters reported, “Finance Minister Jim Flaherty has said as recently as (November) that reviving the dormant bank-merger issue is not a priority for the minority Conservative government. (But) banking executives have called repeatedly for the issue to be addressed since a previous Liberal government halted a pair of proposed marriages in 1998.”

In September 2008, the Globe and Mail reported, “The Canadian market is not ready for bank mergers, Prime Minister Stephen Harper said, making it clear he does not plan to move on the issue if he is re-elected. Finance Minister Jim Flaherty has repeatedly said that bank mergers are not a priority for the Conservatives, but Mr. Harper’s comments went a step further. He said the Conservatives are not proposing moving forward with recommendations that an expert panel, headed by Lynton (Red) Wilson, made (in the summer of 2008) on easing bank merger restrictions.”

One caution – the December 2006 Globe and Mail article also noted, “With public opposition seen to mergers, analysts doubt the issue will be resolved until there is a majority government in Parliament to push through the legislation.”