In response to recent claims by former U.S. President Donald Trump, the Canadian Bankers Association has clarified that U.S. banks are not only permitted but also actively engaged in Canada's financial sector. Despite Trump's assertion that American banks cannot operate in Canada, the association highlighted that these institutions hold a significant share of foreign bank assets within the country. The presence and activities of these banks span various financial services, serving both cross-border and domestic markets.

Clarification on U.S. Banks' Operations in Canada

In a statement released during a crisp autumn day, the Canadian Bankers Association revealed that 16 U.S.-based subsidiaries and branches currently operate in Canada, managing approximately C$113 billion in assets. These institutions provide a wide array of financial services, including corporate lending, treasury management, credit cards, investment banking, and mortgage financing. They cater not only to businesses with international operations but also to Canada’s local retail market.

The clarification came after Trump posted on his social media platform, Truth Social, asserting that Canada does not allow U.S. banks to establish or conduct business within its borders. However, this claim was swiftly refuted by Laurence Booth, a professor at the University of Toronto's Rotman School of Management. Booth explained that Canada's federal Bank Act has long regulated the operations of both domestic and foreign banks. According to the legislation, banks are categorized into three schedules: Schedule I for Canadian banks, Schedule II for foreign-owned subsidiaries that can accept deposits, and Schedule III for branches primarily focused on wealth management and corporate services.

Booth emphasized that there is no legal barrier preventing U.S. banks from operating as separate subsidiaries under Schedule II of the Bank Act. In fact, historically, the central bank and the Department of Finance have encouraged U.S. banks to enter the Canadian market to foster greater competition. The Office of the Superintendent of Financial Institutions lists several prominent U.S. banks, including Amex Bank of Canada, Citibank Canada, and J.P. Morgan Bank Canada, among others, operating under Schedule II. Additionally, well-known institutions like Capital One, Wells Fargo, and Comerica Bank are listed under Schedule III.

From a journalist's perspective, this situation underscores the importance of accurate information in public discourse. Misinformation, especially when it comes from influential figures, can have far-reaching consequences. It is crucial for policymakers and the public to rely on verified data and expert opinions. This incident serves as a reminder of the need for transparency and accountability in communications, particularly in matters that affect international relations and economic policies.