As the federal government pushes to reduce bank fees, a report from an economist figures Canadians are overpaying by more than $7.7 billion a year.
The report by Alberta-based consultancy firm North Economics compared fees at the Canadian Big Five banks 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 U.K. non-interest retail bank profits compare to their deposits.
Using the retail banking profits to deposits ratio for 2022, the report concludes that Canada's five biggest banks had $7.73 billion in "excess" income.
The Canadian Bankers Association did not immediately provide comment, but noted in a recent government submission that competition has led to affordable bank accounts, including 37 per cent of Canadians reporting not having an account fee.
This report by The Canadian Press was first published March 7, 2024.
Banner image: As the federal government pushes to reduce bank fees, a report from an economist figures Canadians are overpaying by more than $7.7 billion a year. Money is removed from an ATM in Montreal, Monday, May 30, 2016. THE CANADIAN PRESS/Ryan Remiorz
