Feds powerless to rein in banks

In their latest financial reporting period, Canada’s big five banks logged profits of $7.4 billion. All earned at least $1 billion except one (the Canadian Imperial Bank of Commerce, with a measly $895-million profit).

In their latest financial reporting period, Canada’s big five banks logged profits of $7.4 billion.

All earned at least $1 billion except one (the Canadian Imperial Bank of Commerce, with a measly $895-million profit).

The fattest share went to the biggest bank, and the one in the crosshairs of opposition politicians and citizens these days: the Royal Bank of Canada, at $2.07 billion.

That fat profit was up 11.5 per cent from the same reporting period last year.

But these are not annual profits; it’s what the banks earned in just three months.

With massive piles of cash flowing into their coffers, you might not think it vital to save a few dollars more by bringing foreigners here to learn tasks that Canadians now perform; send them home and take those jobs from the very Canadians who are training them and ultimately earn the bank even more money by reducing its wage costs marginally.

But you would be wrong in thinking that.

Our big five banks have long ceased to be just Canadian enterprises.

They are global players in highly competitive markets.

Their prime responsibilities are not to their homeland, its citizens, or their employees but to the global investors who own them.

In the past five years, Canada’s six biggest banks spent $38 billion buying new assets in Canada and abroad, Bloomberg Markets reported last summer.

The magazine ranked our Big Five the third, fourth, fifth, sixth and 22nd strongest banks in the world.

Globally, our big banks don’t exactly hide their Canadian roots, but neither do they promote them.

TD Bank, which Canadians know as Toronto-Dominion Bank, now has more branch offices in the United States than all but five huge American banks.

It’s doubtful that more than a tiny fraction of Americans who deal with the bank know or care that the “T” in the name stands for Toronto.

This bank made its U.S. inroads primarily under the leadership of Ed Clark, who announced his retirement last week as president and chief executive officer of TD Bank Group.

When he worked in Calgary heading Petro-Canada barely a generation ago, Clark was considered a socialist by many locals.

His workplace was labelled Red Square — the same moniker as the Russian Communist Party headquarters in Moscow — by oilpatch types who were properly furious at his Liberal Party masters for imposing the devastating National Energy Program in October 1980.

Clark’s business career clearly shows he was no commie and no dummy either.

Generally, bankers are certainly not stupid, nor are the vast majority of them corrupt.

In the main, they play by the rules.

But in Canada — and other nations as well — big banks have been very successful in getting governments to create rules that work in their favour, and not so much for average working citizens.

We witnessed that most starkly in the past decade, when the biggest American banks were saved by massive government-engineered bailouts.

Meanwhile, top bank executives continued getting their multimillion-dollar salaries and perks while sustaining high-risk banking practices.

Those banks were judged too big to fail and the bankers too politically powerful to be reined in, while millions of hard-working Americans lost jobs and homes in collateral damage from bankster hubris.

The plight of the Canadian bank employees training foreign workers who will ultimately take their jobs to Asia pales by comparison to what Americans and millions of others have endured when a banking crisis circled the globe.

But the role the federal government has played in this program is disappointing.

The foreign-worker training program was created to fill vacant job slots where no Canadian workers are available.

For the 45 Royal Bank workers — and many others, critics say — that was emphatically not the case.

Federal rules also let employers to pay temporary foreign workers 15 per cent less than the market scale, driving down wages for Canadian workers.

Both the Royal Bank and the Canadian government are now trying to distance themselves from this boondoggle.

They note that it wasn’t the Royal Bank but a second enterprise named iGate, which was hired to have the soon-to-be unemployed Canadian workers teach their foreign successors.

The Royal Bank routinely subcontracts iGate for back-office work in India.

“The rules are very clear,” Immigration Minister Jason Kenny said this week. “You cannot displace Canadians to hire people from abroad.”

But iGate is training workers here for new jobs in India, not laying any Canadians off.

That’s what the Royal Bank is doing, and bankers today do what bank shareholders want.

Kenny’s government seems too feckless to talk them down or rein them in.

Joe McLaughlin is a retired former managing editor of the Red Deer Advocate.

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