8 August 2019

“In my opinion, the Ontario government should attract a few American banks and register them provincially, so OSFI’s rules don’t apply to them. They will pick up the business Canadian banks are ignoring only to keep the mortgage markets balanced.”

According to Davie, homeowners are also not in a great position, as switching lenders will result in a 2% stress test. In other words, banks now don’t have a reason to provide competitive rates.

An expert Calam Ross shares the idea of bringing American banks to Ontario’s market, saying Canadian banks are an oligopoly.

“Our banks’ power over the market is extremely strong. The Canadian banking is seen at the global arena as something with a license to print money. If you look at the Big Six, you’ll see they divide everything: from back room operations to commonality of credit rules,” – explained Ross. “Compare this with the definition of ‘oligopoly’ and you won’t be able to say we have enough variety and competition.”