Conservative Leader Pierre Poilievre is calling on the federal government to block the Royal Bank of Canada’s proposed $13.5-billion takeover of HSBC Canada, saying it will further decrease competition and drive up borrowing rates.
Speaking with radio host Alex Pierson on 640 Toronto on Friday, Poilievre said the loss of British-owned HSBC’s Canadian division will exacerbate issues in Canada’s banking sector, which he said is already overly concentrated.
“The six biggest banks control almost 90 per cent of all mortgages in Canada,” he said on the AM radio station owned by Corus Entertainment, which is the parent company of Global News.
“This would take out one potential upstart competitor who could, if it stays in the market and doesn’t get bought, could fight for more market share by offering better products and services.”
Poilievre said HSBC’s presence in major mortgage markets like Vancouver and Toronto forces RBC and other major banks to “inch down” their borrowing rates in order to compete for customers.
He said that the lack of competitiveness across major industries in Canada is a reason why the cost of living has soared so dramatically in recent years. If elected prime minister, he said he would block major mergers in federally regulated sectors like banking, telecom and airlines.
“There should be no more mergers,” he said.
Finance Minister Chrystia Freeland still needs to approve the deal, which was struck in November 2022, in order for it to officially move forward. A spokesperson for Freeland’s office said her decision will be informed by the regulatory review processes.
Poilievre told Pierson that Freeland should reject the deal, and said if he becomes prime minister, he would order his finance minister to do the same.
RBC is Canada’s largest bank in terms of assets, which were valued in the most recent quarter at $1.9 trillion. If the takeover deal is approved, RBC would be absorbing what is currently the seventh-largest asset-holder in the country, which HSBC has reported at $123.3 billion.
Despite that, the Competition Bureau cleared the way for the takeover last month, finding it would not significantly lessen competition.
It did, however, say the deal would mean a loss of rivalry between the two banks and that Canada’s banking sector remains concentrated with high barriers to entry.
RBC spokesperson Andrew McGrath said in a statement that the takeover is in the best interest of HSBC Canada’s 700,000 clients, and that the Competition Bureau’s review did not identify Competition Act concerns with the deal.
“We strongly believe that RBC’s proposed acquisition offers HSBC’s Canadian clients the best possibility for continuity and stability,” he said.
A coalition of environmental groups including Stand.earth, LeadNow and Decolonial Solidarity, who have been pushing against the deal largely because RBC’s climate policies clash with HSBC’s more progressive stance, welcomed Poilievre’s comments as a rare point of agreement.
In a joint statement from the coalition released on Friday, Richard Brooks, climate finance director of Stand.earth, called on Freeland to listen to those opposed to the deal.
“Minister Freeland needs to just do the right thing for our climate, for Indigenous rights, and for bank workers and customers and reject this mega deal,” he said.
The opposition leader’s comments came a day after the Competition Bureau released a report that found competitive forces across the Canadian economy have been on the decline over the past 20 years, while price markups and profits soared.
The lack of competition in Canada has been a dominant issue over the past several months, with particular scrutiny on the grocery sector amid the rising cost of food.
The federal government has tabled legislation it says would give the Competition Bureau more power to police oligopolies and other concentrations of market power, as well as enhance competition.
— with files from The Canadian Press
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