History of Canadian Bank Institutions

Today, Canada and her banks have a large impact on the global economy. Of course, to arrive at a system that is so sophisticated and well planned was not easy. It took centuries of endeavoring, refining, and experimenting to arrive at the modern Canadian banking institutions. The current banking system of Canada has given way to “The Big Five” banks in the country. These include the Toronto-Dominion Bank, Royal Bank of Canada, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, and Bank of Montreal. In this article, the origins of these banks will be explored, allowing you to catch a glimpse of how it all started.

Banking in Fledgling Canada

When the French were still in control of the country, bartering was the main form of trade. This was largely due to the fact that there was no local currency within the region. The main currency that came into early Canada was French currency. This, however, was sent right back to France for the purposes of importation. Currency was first really introduced to the nation when the British defeated the French, taking over the country. Spanish, French, Mexican, German, and Portuguese coins were used to pay the soldiers. This soon led to currency being more widespread in the area.

Early Banking Attempts

There were those who attempted to establish a banking system in early Canada. In 1792, there were nine Montreal merchants who decided to form the Canada Banking Company. Unfortunately, the company failed to get permission to issue bank notes, resulting in its untimely failure. There were other endeavours that followed the Canada Banking Company in 1807 and 1808. These too, however, failed to gain any traction and soon closed their doors.

The First Bank

By all accounts, the first bank in Canada is recognized as being the Bank of Montreal. Although it began operations in 1817, it was only approved as an institution in 1822. At this point, nonetheless, there were other banks that were also being recognized. These was the Bank of Upper Canada and the Bank of New Brunswick. There was also another institution, the Bank of the People that was launched by Francis Hincks, who was soon to be Prime Minister of the Province of Canada.

The Formation of the Other Four Major Banks

The Bank of Nova Scotia is the second oldest bank in the group. It was created in 1832, becoming the first chartered bank in Nova Scotia. This institution was created as an alternate to the then-current Halifax Banking Company. The original members were James Foreman, Benjamin Carlile, Alexander Paul, James Maxwell, and the President, William Lawson.

The Toronto-Dominion Bank, commonly referred to as TD, was brought to life in 1955, following a merger between two other institutions. This merger consisted of the Bank of Toronto, founded in 1855, and the Dominion Bank, started in 1869. This led to the TD having a long lineage, despite its later commencement.

The Canadian Imperial Bank of Commerce is also a product of a merger. In fact, it holds the title for one of the largest mergers between two banks in Canada. The Canadian Bank of Commerce, started in 1867, and the Imperial Bank of Canada, established in 1875, were the original institutions.

The Royal Bank of Canada began its operations under a very different name in 1864. It was the Merchants Bank of Halifax. In 1869, it became a public company. Between 1900 and 1930, the bank experienced incredible growth. This prompted them to change their name to the Royal Bank of Canada. Over the years, RBC has merged with the Union Bank of Halifax, the Traders Bank in Canada, the Quebec Bank, the Northern Crown Bank, and the Union Bank of Canada.

The Current Performance of the Big Five

All of the Big Five banks continue to be based in Toronto. In terms of capitalization, deposits, and assets, these financial institutions have claimed their spots above the rest. Collectively, they consist of about 85 percent of the overall banking industry in Canada. One of the reasons that these banks continue to top the list is that they have been considerably resilient, even in the face of the recession.

Currently, the Royal Bank of Canada is the largest bank among them, boasting about $655 billion in assets. The Toronto-Dominion bank is a close runner up with assets of almost $560 billion. The Bank of Nova Scotia claims the next spot with $500 billion in assets. Bank of Montreal has almost $390 billion in assets. In fifth place is the CIBC, which has about $336 billion in assets.

While these banks still remain five of the most important banks both worldwide and in Canada, there have been a few shakeups. For instance, over the years, RBC, TD, and the Bank of Nova Scotia have been performing considerably better, allowing them to sequester the top three positions by a landslide. Although still incredibly relevant, the Bank of Montreal and CIBC have been lagging for a while now.

This is the history of the major banking institutions in Canada. Most of these banks have been around for a long time and have managed to maintain their powerful positioning despite considerable upheavals.



Canadian History

Despite being the second largest country in the world, Canada has not been a country for too long. At least not when taking into consideration other nations across the world. Canada officially became a country in 1867, just 149 years ago. Nonetheless, the history of the region and the people who inhabited it are considerably older. It has taken many centuries and events to create the Canada that you know of today. Let’s take a look at this rich and tumultuous history:

The First Explorers

The most well-known European explorers were the ones that eventually colonized North America. Much earlier than that, however, there were other visitors to this land. In fact, thousands of years ago, the Vikings were some of the first invaders to land in Canada. Once they had colonized Greenland, they made their way to Canada, settling in Labrador and Newfoundland. The L’Anse aux Meadows, where they first settled, is now a World Heritage site.

It was only many years later – the end of the fifteenth century – in fact, that other European explorers were made aware of Canada. It was first Jean Cabot, ordered by the English King Henry VII, that sailed towards this region. There, in Newfoundland, he discovered an abundance of fishing opportunities. Cabot did not stay there long, however.

Between the years of 1534 and 1536, there were other expeditions made. These were largely carried out by a Frenchman, Jacques Cartier. In August of 1935, Cartier sailed into the later named St. Lawrence River. This also marked the first time that Europeans met the Aboriginals of this land. The name Canada is actually derived from the Iroquoian word Kanata, which means village.

The Initial Settlements

Despite the initial explorations, there were no actual settlements until much later on. It was only in 1604 that the first proper settlement began to take place. The first one was in St Croix Island, which is modern Maine, and then in Port Royal, Acadia – now Nova Scotia. Four years later, there was a fortress set up in what is now known as Quebec City. These settlements were made possible due to the French explorers Pierre de Monts and Samuel de Champlain.

The Aboriginals of this land, particularly the Iroquois, were opposed to the French settling on their land. To counteract this defiance, Champlain created alliances with the Huron, Montagnais, and Algonquin, who had been fighting against the Iroquois for many years. The Iroquois and the French finally came to an understanding in 1701. From this a business collaboration involving the fur trade sprung forth.

Britain vs. France

France was not the only player in a bid to dominate North America. Britain had also begun colonizing a majority of the area, particularly in what is now known as America. Britain soon began to grow more prolific, wealthier, and more successful than their French counterparts. In the 1700s, this led to a battle for control between the French and the English. In 1759, the British defeated the French army in Quebec City, bringing the French rule to an end. This colony was renamed the Province of Quebec. Although it took some time, the British rulers and the French citizens were able to come to an agreement regarding the law of the land.

America vs. Britain

In 1776, the United States declared its independence from Britain, leaving future Canada the only part of North America that Britain maintained control over. Several decades later, America felt that it would be beneficial to colonize Canada over anger at the British Empire. However, by 1814 this invasion had failed, allowing Canada to remain independent from the United States.

The Confederation

While Canada wanted to be separate from the United States, they also wished to be a democratic nation all the same. Some individuals in Upper and Lower Canada felt that the process needed speeding up, leading to a rebellion that was quickly thwarted. This, however, did lead to the merging of the Upper and Lower Canada regions under one responsible government. Between the years of 1864 and 1867, there was progress made towards a single, united nation. This led to the splitting of the Province of Canada into Ontario and Quebec. This, together with the regions of New Brunswick and Nova Scotia, was proclaimed the Dominion of Canada.

It was deemed that each of these provinces would govern independently when it came to certain factors such as health and education. This meant that the government of Canada would operate on two levels – provincial and federal. All of these arrangements were made official on July 1, 1867. This day was known as Dominion Day but was later celebrated as Canada Day.

This is just a short history of the country that is now known as Canada. After the declaration of the Dominion of Canada, other provinces joined the ranks one by one to make up the ten provinces that Canada consists of today.