Foreign firms can operate in Canada, but it’s far from easy especially Telecom and Banking
The claim that "American banks, are not allowed to do business in Canada" - though false - does speak to a broader frustration with restrictions on competition in Canada.
According to Bloomberg, Foreign firms can operate in both sectors, but it’s far from easy.
A US company can enter Canada’s telecom sector but is barred from buying an existing player with more than 10% market share — this effectively rules out foreign takeovers of industry leaders Rogers Communications Inc., BCE Inc. and Telus Corp. Starting from such a small scale is a tall order in that business, which is heavily regulated and demands decades of capital investment before a payoff.
Rules that would let foreign firms come in as resellers of wireless services have never materialized, despite years of calls for more competition on cellphone prices.
In banking, winning a Canadian license can take years and is contingent on an opaque approval process by the country’s bank regulator and finance minister.
To accept retail deposits, a foreign bank has to set up a Canadian subsidiary with its own capital structure and board. Only three of the US-headquartered banks have gone that route — Amex Bank of Canada, Citibank Canada and J.P. Morgan Bank Canada.
They employ hundreds of people here but none offer widespread, full-service consumer banking. UK-based HSBC Holdings had a significant Canadian retail presence but sold those assets to Royal Bank of Canada last year.
The other American banks in Canada are so-called “branches” that can take deposits of more than C$150,000 — essentially limiting them to wealth management and providing services for businesses, including corporate lending.
Contrast this to the US, where three of Canada’s six largest lenders have notable retail franchises — RBC, Toronto-Dominion Bank and Bank of Montreal.
TD alone has almost 1,200 American branches, 10 million customers and $408 billion in US assets as of Dec. 31.
As with telecom, there are many Canadian interests who are eager to see the government to do something to loosen the grip of the domestic Big Six. This includes the fintech sector, which continues to bemoan the seemingly unending process to get open banking approved.
The claim that "American banks, are not allowed to do business in Canada" - though false - does speak to a broader frustration with restrictions on competition in Canada.
According to Bloomberg, Foreign firms can operate in both sectors, but it’s far from easy.
A US company can enter Canada’s telecom sector but is barred from buying an existing player with more than 10% market share — this effectively rules out foreign takeovers of industry leaders Rogers Communications Inc., BCE Inc. and Telus Corp. Starting from such a small scale is a tall order in that business, which is heavily regulated and demands decades of capital investment before a payoff.
Rules that would let foreign firms come in as resellers of wireless services have never materialized, despite years of calls for more competition on cellphone prices.
In banking, winning a Canadian license can take years and is contingent on an opaque approval process by the country’s bank regulator and finance minister.
To accept retail deposits, a foreign bank has to set up a Canadian subsidiary with its own capital structure and board. Only three of the US-headquartered banks have gone that route — Amex Bank of Canada, Citibank Canada and J.P. Morgan Bank Canada.
They employ hundreds of people here but none offer widespread, full-service consumer banking. UK-based HSBC Holdings had a significant Canadian retail presence but sold those assets to Royal Bank of Canada last year.
The other American banks in Canada are so-called “branches” that can take deposits of more than C$150,000 — essentially limiting them to wealth management and providing services for businesses, including corporate lending.
Contrast this to the US, where three of Canada’s six largest lenders have notable retail franchises — RBC, Toronto-Dominion Bank and Bank of Montreal.
TD alone has almost 1,200 American branches, 10 million customers and $408 billion in US assets as of Dec. 31.
As with telecom, there are many Canadian interests who are eager to see the government to do something to loosen the grip of the domestic Big Six. This includes the fintech sector, which continues to bemoan the seemingly unending process to get open banking approved.