: A sizable fee pool and costly account switching put competition in the spotlight
Bank fees that look small one at a time can be hard to see, predict and compare, the Financial Consumer Agency of Canada (FCAC) said in a review released Friday. It added that the costs can add up over time, especially for lower-income Canadians.
The 130-page A Review of Banking Fees in Canada, requested by Ottawa in Budget 2025, looked at fees on personal deposit accounts, not mortgages. Across nine fee categories, financial institutions earned an estimated $2.45 billion in 2025, the Globe and Mail reported.
Where costs get hidden
FCAC said multiple fees can apply to a single transaction, foreign exchange and cross-border debit fees can be embedded in a purchase price, and usage-based fees are hard to predict when customers cannot track their transactions.
FCAC’s backgrounder also flagged multiple fees on one ATM withdrawal, excess transaction fees, and prepaid product fees that can erode balances over time. It said point-in-time disclosures do not always show cumulative costs.
The review said customers with lower incomes, less savings or heavier reliance on daily banking may be disproportionately affected, CBC reported.
“Canadians should be able to clearly understand what they are paying for banking services. When fees make the full cost harder to see, it affects both affordability and competition,” FCAC commissioner Shereen Benzvy Miller said in the release. “More transparency makes it easier for consumers to compare options and save money, and financial institutions have stronger incentives to compete for their business.”
Switching, competition and open banking
The review also pointed to barriers to switching. Transfer-out fees raise the cost of moving an account, and customers face indirect costs such as time and paperwork. “We need financial institutions to remove the friction for switching,” Benzvy Miller said in an interview with the Globe. Canada’s six largest banks together hold more than 90% of the market, the Globe reported.
FCAC said consumer-driven banking, also known as open banking, could make fees more visible and help consumers compare and switch providers. The Consumer-Driven Banking Act received royal assent in March. Proposed regulations published in June place the framework under the Bank of Canada’s oversight. It would let people share their financial data with accredited providers of their choice.
The mortgage industry has long advocated for open banking, CMP has reported.
The Canadian Bankers Association (CBA) did not directly address the findings in its response. CBA chief executive Anthony Ostler said in a statement: “When money is put in a bank in Canada, deposits are insured and the bank is overseen by regulators who ensure Canadians are treated fairly and their money is secure.”
What it means for brokers
The review does not examine mortgage products. But everyday banking costs shape clients’ monthly cash flow, and brokers who want to discuss total cost can point clients to FCAC’s Account Comparison Tool and the low-cost and no-cost account commitment the agency supervises.
