Canadian Banks Need to Step Up

The pandemic is requiring all of us to make adjustments. Banks have been making huge profits for years and are in a position to make a significant financial contribution to assist this country through COVID- 19.

These institutions bring in massive profits on the backs of Canadian workers and they must do better in assisting them in managing their financial stress during these difficult times. Some measures they can implement include: reduced interest rates across the board, slashing bank fees, a moratorium on executive bonuses, and cutting dividend payments.

Banks have a reputation of gross profit margins. We continually hear of appalling bonuses paid to bank CEOs; much more than any Canadian could dream of making in a decade and a half. On top of these profits and bonuses are the continually increasing bank fees and interest rates. These can be incorporated by the banks at little or no hardship to them.

Immediate reduction of interest rates should take effect until at least the end of 2020. If banks were to drop their rates to the prime rate (2.45%) across the spectrum, it would provide a significant boost to many Canadians.

Bonuses for 2020 should be put on hold. If there are bonuses, it should be no more than 2:1 across the bank. This means that the bonus for the highest paid in the bank cannot be any more than double the amount given to those with the lowest wages.

Bank fees are notorious for being a hot election issue. While some reductions have been made, now is the time to take the bold step and cut those fees permanently. Financial stresses will be a continuing issue after COVID-19 and Canadians will need the flexibility without these added costs.

The final suggestion is to reduce dividends. Bank stocks are considered safe investments some retirees rely on. Banks could reduce dividend payments to cover some of the costs to Canadians.

We are all making adjustments but most Canadians are not in a position to defer their incomes. The income that is lost will not be made up. Banks may not want to  jump on board with these proposals but getting on board will be a clear message that they want to be part of a long-term solution that does not rely solely on the government paying interest rather than individuals.

Joe Byrne

Joe Byrne

Here on PEI, Joe has worked on numerous social programs in rural communities. He has done field work on issues faced by university and college students, has been Director of Youth Ministry, and has also coordinated pastoral planning for the diocese. He remains active in the Latin American Mission Program, and is President of the Cooper Institute, a grass-roots collective for community development. He also counts among his volunteer and community work Charlottetown Abbies soccer, church Youth and Music ministries, Voluntary Resource Council, Peace Vigil Group, Atlantic Council for International Cooperation, Canada World Youth, and Katimavik hosting. He keeps up his interaction with young people as a part-time instructor for the Abegweit Driving School. All of this, he does in addition to his work in the NDP. His vast array of church and community experiences have helped him cultivate his skills in communication, organization, and consensus building, and also brought him the joy of forming hundreds of friendships.

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