Banks and the Economy
Fast facts
- 267,000 Canadians are employed by banks in Canada
- Banks provide start-up and growth financing to more than 1.6 million Canadian SMEs
- Canada’s largest six banks paid $8.3 billion in taxes to all levels of government in Canada in 2010
- Canada’s profitable banks provided $10.3 billion in dividend income to millions of Canadians in 2010
- The banking sector helps Canada grow, generating over $55 billion / 3.4% of gross domestic product (GDP)
The bottom line
Strong banks are needed more than ever to help families buy a home, help Canadians save for retirement, help small businesses to grow and thrive, and help promote Canada’s brand internationally that this country is a great place to do business.
Contribution to Total Canadian GDP | |
Banking | 3.4% |
Financial & Insurance | 6.7% |
Contributing to the Canadian Economy
Canada’s financial services sector 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. Three- quarters (76%) of Canadian believe that banks are doing an important job in contributing to Canada’s economic recovery. And almost nine-in-ten (87%) Canadians continue to believe that a strong banking sector that is able to compete on the international stage and support Canadian businesses is important.
Serving small business
Banks have relationships with nearly two million small businesses, providing products and services that range from accounts and merchant payment processing solutions to payroll and international trade services. Banks also provide financing, as do a wide variety of alternative financing providers.
Domestic and other banks provide approximately 58 per cent of small business financing, with other sources including credit unions and caisses populaires, finance companies, insurance companies and venture capital/investment funds.
Despite the recent economic downturn, banks have 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 $14.4 billion in 2010.
Banks as taxpayers
Canada’s banking industry is one of the highest taxed sectors in the country. Canada’s six largest banks paid $8.3 billion in taxes to all levels of government in Canada in 2010.
Canadians as shareholders
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 the main beneficiaries of the billions of dollars that the banks pay in dividends each year ($10.3 billion in 2010).
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 2010 was generated outside Canada, while 74 per cent of bank employees were located in Canada, and 82 per cent of taxes were paid in Canada.
Banks as employers
Canada’s banks and their subsidiaries contribute significantly to employment and job creation. In 2010, banks employed 267,240 Canadians. Industry employment has increased by 11.5 per cent over the past ten years while full-time industry employment has increased by 21.5 per cent over the same period.
Both the quality and the number of jobs are consistently high in the banking industry. Full-time jobs reached 78.9%, the highest it has been in the past 17 years.
And banks and their subsidiaries paid $18.2 billion in salaries and benefits in Canada in 2009.
A Diverse workforce
Canada’s banks have built workforces that reflect the diversity of the Canadian labour market. As of 2009, close to 70 per cent of the banks’ workforce is comprised of women, and 32 per cent of senior managers are women. Both of these figures are well over the government’s benchmarks. More than one in five bank employees are visible minorities, who are also increasingly represented in senior management. This number also exceeds government benchmarks.
In 2009, just over 2,500 aboriginal people and more than 6,800 people with disabilities were bank employees. Banks are currently engaged in a number of initiatives to increase representation and advancement in employment of aboriginal people and people with disabilities.
Banks in the community
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.
General inquiries
1-800-263-0231 or inform@cba.ca
Media inquiries
Rachel Swiednicki, Manager, Media Relations
(416) 362-6093, ext. 220 rswiednicki@cba.ca
