In terms of resilience and sustainability, I think it is important to support small local businesses. They have a vested interest in helping support the local community. There isn’t the risk that a local store will be closed overnight at the discretion of a distant corporate bean counter. Sure, many corporations are embracing sustainability and climate change mitigation goals. This is important. Every company should be obligated to show how its operation is sustainable and in line with global GHG mitigation targets. The problem is that it can be hard to distinguish between companies that are making a genuine effort for the sake of the environment, compared to those that are pretending to as a public relations exercise.
Large publicly traded companies often operate with a notion of “shareholder primacy," where the legal and economic framework for corporate governance is established solely to maximize wealth for shareholders. Profit is a priority over employees, the environment, and all the warm fuzzy goals that are found in their corporate responsibility statements. In Canada, Big Banks are the largest companies, with the top three Canadian companies on the Forbes 2000 list of the worlds largest public companies being RBC, TD Bank and Scotiabank, respectively.
As outlined in a letter below that I sent to my local Member of Parliament on February 26, 2021, (no response yet), Scotiabank has clearly demonstrated that profit goes before their stated values, where they are systematically shutting down local branches in rural settings in an effort to boost profit.
Dear Patrick Weiler,
I am writing to find out what you have done to help discourage Scotiabank from closing its branch in Pemberton? I also would like to know why the Liberals are sitting by when big banks continue to make billions in profit, yet are closing many rural branches simply because they aren’t making them enough money? This focus of growing profits over the well being of communities is hurting small towns across Canada:
- It goes against efforts to reduce local GHGs by making people drive further for their banking and reducing the number of financing options available to residents and businesses looking to fund projects to reduce their emissions.
- It goes against efforts to improve the resilience of small towns, which will be required as they face increasing pressures because of climate change.
- It goes against efforts towards reconciliation with indigenous peoples given that many rural branches also service local First Nations.
It is no secret that banks are planning to pull out of small towns. In 2015, the CEO of Scotiabank predicted that small towns would see branch closings. Scotiabank followed up with their prediction by closing branches in many towns including Chipman, N.B. (2016), Beardmore, ON (2016), Hartland, N.B. (2018), Port Alice, BC (2019), South Mountain and Beachburg, ON (2020), Pemberton, BC (2021). Other big banks are following suit with a dozen local bank branches just in Northern Ontario having been closed, including CIBC branches in Englehart and Terrace Bay, TD in Marathon, both TD and CIBC in Atikokan
Rural bank branches are a critical component of having resilient small towns. They are used daily by local businesses, local First Nations communities, seniors, etc. You can search for news articles for all of the above stated closures and read how they have severely impacted the local residents. For example, in Pemberton, the N'Quatqua Nation residents already travel significant distances to get to the branch, forcing them to go to Whistler will only further inconvenience them. Even the Lil’Wat Nation, which is closer, will be greatly inconvenienced by this move given that many of their members don’t own vehicles. Many businesses rely on the bank on a daily basis for deposits and cash. Many users of the Scotiabank are on social assistance and rely the bank to cash their cheques. By moving their personal banking to Whistler, it will undoubtedly move some of their shopping to Whistler. This will further impact the local businesses in Pemberton.
Some bank branch closures may be the result of a branch losing money. However, branches that are seemingly profitable are also closing. Pemberton and its surrounding area is growing rapidly, with $134 million in real estate traded in Pemberton in the last 12 months alone. It seems that banks not only want to make profit, they want to make lots of money to keep offering services.
Scotiabank says on its website that Customers are its first pillar. Its four values are Respect, Integrity, Accountability and Passion. Their four priorities for Corporate Responsibility are Trust, Climate Change, Economic Inclusion and Young People. They have demonstrated none of these in how they have dealt with the closure in Pemberton. They fail to mention their foremost priority is making billions in profit for their shareholders, and that growing their profits comes first.
The Liberal’s Bill C-86 essentially spelled out to banks how they can close rural branches. Giving six months’ notice and hosting a potential meeting with townspeople is all that’s needed. This certainly does not go far enough. If they are to close a branch in a rural town, banks should be forced to disclose the profits (or losses) that the branch is generating, as well as list the measures that they have taken to increase profits, if the branch is actually losing money. In addition, they should be forced to justify how the closure fits within the bank’s stated values.
Regards,
Remi Charron
Pemberton resident