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Opinion: Our banks are still being weaponized. It should be stopped

The U.S. and U.K. have taken measures to prevent 'de-banking' — cutting off bank services for political reasons. Canada should do the same

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Banks are key institutions of modern life. The idea that they might become ideological actors and deny service to — or “de-bank” — otherwise eligible individuals or companies because of their political opinions or the perfectly legal business they’re engaged in is more than a little disconcerting. Yet until recently Canadian banks have been all-in on punishing the oil and gas industry and enforcing ESG requirements on institutions that borrow from them, and in several high-profile instances they have denied service to protesters and activists, though only those on one side of the political spectrum.

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About the only thing more disconcerting than the bank’s coercive paternalism is the Canadian public’s apathy concerning this issue. In the U.S., no doubt motivated by Donald Trump’s own experience with de-banking, the White House has issued an executive order that targets de-banking and calls for a review of financial institutions’ banking practices. The order, “Guaranteeing Fair Banking for All Americans,” directs federal banking regulators to identify institutions that have engaged in unlawful or politicized de-banking and authorizes enforcement actions against them.

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In the U.K., where Brexit advocate and Reform UK leader Nigel Farage had his bank account arbitrarily closed in 2023, de-banking is referred to as a “national scandal” that “must be stopped,” according to advocacy group The Prosperity Institute. The Treasury Committee of the U.K. Parliament has published data showing the number of de-banking complaints received by the Financial Ombudsman Service increased by 69 per cent from 2021 to 2024. The U.K. government has introduced new rules that will come into effect at the end of April to protect individuals and businesses against de-banking.

In Canada, however, nothing is happening. The federal government has done nothing to stop the weaponization of the banking sector, while our banks have offered no assurances to Canadians concerned they might lose their accounts because of their political views or affiliations. Only one financial institution, Alberta-based Bow Valley Credit Union, has publicly committed not to de-bank its law-abiding customers.

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The fact that Ottawa is not following our allies on this topic is not surprising, given that it was the Liberal government of Justin Trudeau that unconstitutionally coerced our banks to de-bank selected customers by means of the Emergencies Act. And both the Trudeau and Carney governments have allowed the banks to engage in sector-based forms of cancellation like de-banking. Financial institutions, including banks, have maintained exclusions for the oil and gas sector for ideological, not fiscal or business, reasons.

This year, InvestNow, the organization I lead, presented shareholder proposals to the “Big Five” Canadian Banks asking them to return to maintaining viewpoint neutrality in their business practices. We asked them to look after the interests of their clients in a non-partisan, non-ideological way. Only if banks are held to strict viewpoint neutrality will they become truly inclusive institutions open to all potentially profitable businesses and individuals who are abiding by the law. The “Big Five” have yet to reply. We will see what happens at their annual general meetings in April.

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Banks hold a government charter to conduct banking. That charter grants a privilege, but it also comes with the responsibility to stay focused on the purpose of banking. Withholding services based on the ideological alignment or political perspective of clients is overreach. As both customers and shareholders of the banks, Canadians need to hold them to account for any activity that strays from the business of banking.

Gina Pappano is executive director of InvestNow.

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