The proposed deal comes amid a widespread rethink in how corporate consolidation has been treated for decades, with potential new rules in the works both in
Current Canadian laws generally don't challenge an acquisition over market power concerns if it leaves the company with less than 35 per cent of market share, which means many smaller deals don't face enough scrutiny, said
“A key issue is that our competition law really only pays attention to the big guys, and often misses the value that the small players play.”
He said the loss of HSBC’s Canadian division would remove a player that has offered fairly aggressive rates on mortgages along with other advantages offered by a smaller player trying to increase market share.
RBC is well aware of the bureau's guidelines, with chief executive
“It doesn't take us anywhere close to the normal
The acquisition of a smaller player may appear to be of minor significance on its own, said
She said that one of the biggest challenges to blocking mergers in
“Even it’s very obvious it's going to have anticompetitive effects, or harms, the efficiencies defence is kind of a veto power saying, 'Well, it doesn't matter.'”
The
It's in that atmosphere of heightened scrutiny that TD is trying to close its
The deals are still expected to go through, in part because the two Canadian banks are moving into new markets rather than taking out a competitor where they already operate.
To help placate regulators though, the banks have made numerous commitments including that neither plan to close branches, which provide a physical commitment to maintaining choice in a neighbourhood.
RBC, meanwhile, has made no commitments on keeping
Heightened scrutiny in the
BMO set out its benefits plan in late November, outlining more than
The revival of the agreements in recent years has been spearheaded by the
“When a merger takes place, it should increase access to financial services and community reinvestment,” said
She said the benefits agreements help to make sure a bank merger doesn't just help shareholders and investors, and that she's especially excited about the part of the BMO deal that has the bank forming an advisory group to understand and serve the needs of Indigenous communities in the bank's footprint.
“It's a great model for ensuring that the consolidation of the banking industry doesn't result in communities being left out, or have a negative impact on underserved communities.”
When announcing the merger, McKay said
Asked to clarify the bank's position on wider benefits, spokeswoman
"We are confident our agreement to acquire HSBC Canada will deliver a strong net benefit in communities that we already know well," she said.
The
In
RBC did launch a lending program for Black entrepreneurs late last year after a co-ordinated effort between banks and the federal government to create a wider program fell apart. The bank however wouldn't say how much they've lent out through the initiative other than to say they've had thousands of "client engagements."
"We remain committed to taking action to help create an equitable and inclusive economy for all," said McArdle.
While much of this is well outside what the
He said that since
"It really is a question of, I believe at least, what does the minister say?"
This report by The Canadian Press was first published
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