Canada:
Banks slash thousands of jobs

by Kimball Cariou

Profits are going through the roof for some of Canada's biggest banks, but 
instead of sharing the wealth with their employees or cutting service fees, 
the banks are wiping out thousands of jobs.

Last month, the Royal Bank announced profits of C$1.76 billion for fiscal 
1999. On the same day, Royal chairman John Cleghorn promised to slash 6,000 
jobs by the end of 2001, as part of a drive to reduce costs by $400 
million.

Another 3,000-4000 jobs will be eliminated next year, and 1,000-2,000 in 
2001, almost 12 percent of the bank's current employees.

Toronto-Dominion (TD) announced even bigger 1999 profits in November, the 
largest ever by a Canadian bank, a staggering C$2.98 billion. TD had 
already said that it will slash 4,900 jobs when it takes over Canada Trust.

The Bank of Montreal announced in October that it will eliminate 1,450 jobs 
to cut costs. While the CIBC has not issued similar workforce downsizing 
predictions, it plans to cut costs by C$500 million annually, spelling the 
end of thousands more jobs.

The total scope of job losses over the next two years at the big banks is 
expected to top 15,000.

Financial analysts predict that the Royal and TD figures will carry the 
industry to a fifth straight year of record profits.

After racking up total profits of C$7 billion in 1998, the six major banks 
are headed for C$8 billion or more this year.

Even so, the banks and the corporate media claim that profits are not high 
enough. The truth is that capitalist competition is indeed driving these 
massive job losses.

In 1970, the Royal Bank was 12th in the world in terms of bank assets. 
Today it ranks 57th. The dizzying pace of mergers and takeovers in the 
global financial industry continues to create mega-banks and corporations 
on a scale inconceivable a decade ago.

To survive in the capitalist jungle — or in other words, to reap profits 
equal to those of the competition — Canada's big banks are desperate to 
keep shutting down less profitable outlets and build on what they consider 
their "core operations".

Four of the five biggest banks also tried to force the Chretien Government 
to let them merge, a demand which was turned down because the banks are so 
widely hated by their own customers, i.e. Canadian voters.

But Ottawa is about to give the banks a "consolation prize": permission to 
increase their levels of foreign ownership to 20 per cent, up from the 
present 10 per cent.

Already rumours are circulating that Chase Manhattan, one of the biggest US 
banks, will buy 20 per cent of the Royal or one of its Canadian rivals.

That would give Chase Manhattan a virtual controlling interest.

As Eric Reguly wrote in the November 19 Globe and Mail, "In time, 
Chase and Royal would become fully integrated, with Chase, of course, using 
its sheer heft to get its way.

"While Royal's official headquarters would remain in Toronto, more and more 
senior executive and managers would move to New York. Eventually, the 
Canadian headquarters, would be hollowed out to the point that it would be 
little more than a PR gesture to Ottawa."

Tens of thousands more jobs lost, and another shattering blow for the 
remnants of Canadian sovereignty. That's the direction the Big Banks are 
taking us, in the name of higher profits. Welcome to capitalism in the 
third millennium!

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People's Voice, "Canada's leading communist newspaper"