Banks and the Economy
- Over 280,000 Canadians are employed by banks across Canada.
- Banks and their subsidiaries paid $24.1 billion in salaries and benefits in Canada in 2014.
- Banks provided financing to about 1.6 million small and medium sized businesses.
- Canada’s six largest banks paid $8.5 billion in taxes to all levels of government in Canada in 2014.
- Canada’s profitable banks provided $14.8 billion in dividend income to millions of Canadians in 2014.
- The banking industry helps Canada grow, contributing 3.3% (or around $60 billion) to Canada’s gross domestic product (GDP).
Strong, sound banks help families buy a home and save for retirement, help small businesses to grow and thrive, and help drive the economy, providing economic benefits to all Canadians today and into the future.
Canada’s banking industry is an essential contributor to the country’s economic growth and well-being. Banks are leading taxpayers, progressive employers and major purchasers of goods and services from Canadian suppliers as well as being good corporate citizens. And Canadians understand the industry’s importance to the country’s economy. Almost nine-in-ten (89 per cent) Canadians believe that a strong banking industry that is able to compete on the international stage and support Canadian businesses is important.
Banks provide small businesses with products and services that range from accounts and merchant payment processing solutions to payroll and international trade services. Banks also provide financing, such as lines of credit, term loans, mortgages, credit cards, overdraft protection, and leasing.
Domestic and other banks provide approximately 62.5 per cent of small and medium-sized enterprise (SME) business financing, with other sources including credit unions and caisses populaires, finance companies, portfolio manager, financial funds and insurance companies.1
During the economic downturn, banks continued to provide financing to both consumers and businesses, including small businesses. The banking industry also assists Canadian businesses by supporting knowledge and skill-based initiatives. Some examples include:
- CBA small business online information resources
- Bank websites offer numerous tools, including business planning and budgeting templates
- Participation by bankers in local workshops and ‘access to experts’ programs
- Support for entrepreneurial studies programs at post-secondary institutions
We’re good customers, too:The banking industry is a major purchaser of goods and services from outside suppliers, spending $17.7 billion in 2014.
Canada’s banking industry is one of the highest taxed industries in the country. Canada’s six largest banks paid $8.5 billion in taxes to all levels of government in Canada in 2014. And according to data compiled by Bloomberg, four of Canada’s banks were among the country’s top five corporate taxpayers.2
Most Canadians are shareholders in Canadian banks either directly through share ownership or through pension funds and mutual funds, including the Canada Pension Plan. Pension funds and RRSPs are some of the primary beneficiaries of the billions of dollars that the banks pay in dividends each year ($14.8 billion in 2014).
Successful exporters and international competitors
Canadian banks are successful exporters, with banks’ foreign operations contributing significantly to each bank’s bottom line. Approximately 29 per cent of bank income in 2014 was generated outside Canada, while 72 per cent of bank employees were located in Canada, and 76 per cent of taxes were paid in Canada.
Canada’s banks and their subsidiaries contribute significantly to employment and job creation. In 2014, banks employed 280,145 Canadians and full-time industry employment has increased by 26.9 per cent over the past ten years
Both the quality and the number of jobs are consistently high in the banking industry. Full-time jobs reached 80.9 per cent, the highest it has been in the past 19 years.
And banks and their subsidiaries paid $24.1 billion in salaries and benefits in Canada in 2014.3
A diverse workforce
Canada’s banks have built workforces that reflect the diversity of the Canadian labour market. As of 2014, 62 per cent of the banks’ workforce was comprised of women, and 34.5 per cent of senior managers were women. Both of these figures are well over the government’s benchmarks. More than one in four bank employees are visible minorities, who are also increasingly represented in senior management.
In 2014, 2,729 aboriginal people were bank employees. Representation of people with disabilities in the large six banks increased to 4.1 per cent in 2014. Banks are currently engaged in a number of initiatives to increase representation and advancement in employment of aboriginal people and people with disabilities.
Banks and their employees are among Canada's top corporate donors and have a long tradition of community participation. Canada’s charities and non-profit community groups receive multi-million dollar support from banks and every year thousands of bank employees at all levels donate their time and talent to charitable initiatives. These contributions help support a broad range of programs, particularly in the areas of education, the arts, youth, the environment, disaster relief and health care.