But are they getting better? The federal government's Competition Bureau has announced that it will use the big banks' own figures to help it decide on their proposed merger plans. There exists a great deal of different opinions with regard to the issue of Canadian bank mergers; however, it appears as though Canadian officials and private citizens are not favouring the big banks combining. Cited for a number of reasons including lost jobs and higher costs for various transactions, the proposed merging of five of Canada's most influential financial institutions has caused a great deal of concern. In an age when bigger does not always compare to better, Canadians are worried that too much merging will be a costly mistake. .
Reasons for Merging .
The reasons for bank's to merge come as no surprise. The Finance Minister .
concluded that the mergers are not in the public interest as they would result in: .
too much concentration of economic power in Canada in the hands of too few .
financial institutions .
a reduction in competition in the Canadian financial services sector .
a reduction in the Canadian government's flexibility to address future concerns.
Definition of a Merger'.
In Section 91 of the Competitive Act, it defines a merger as "any transaction in which control over, or a significant interest in, the whole or a part of a business of another person is acquired or established."" With respect to corporations, "control" is explicitly defined in section 2(4) of the Act to mean de jure control. Given the range of management and ownership structures which exist, a determination of whether a significant interest is likely to be acquired or established must be made on a case by case basis.
Bank mergers in general.
Unlike other mergers, bank mergers need the ultimate approval of the Minister of Finance under the Bank Act. In recognition of this fact, the Competition Bureau announced in July 1998, as part of The Merger Enforcement Guidelines as Applied to a Bank Merger , that it would send a letter containing its assessment to the banks proposing to merge, and to the Minister of Finance.