Stop RBC's Acquisition of HSBC

Earlier today, my colleagues and I sent a letter to Finance Minister Chrystia Freeland asking her to stop RBC's acquistion of HSBC.

Thursday, October 5, 2023
The Honourable Chrystia Freeland
Deputy Prime Minister and Minister of Finance
House of Commons
Ottawa, ON, K1A 0A6


Dear Minister Freeland:


We are writing to you regarding the Royal Bank of Canada’s (RBC) acquisition of HSBC. The potential merger of these two big banks will not only be bad for Canadians and their budgets but will hurt Canada’s efforts to fight the climate crisis. As Minister of Finance, you have the power to stop this merger and put protecting Canadians and our climate before the profits of big bank executives.


HSBC has been a leader among financial institutions in green financing. They have committed to stop funding fossil fuels and helped issue Canada’s first green bond. By contrast, RBC is the largest financier of fossil fuels globally. While they have pledged to fund sustainable projects, these investments are a drop in the bucket compared to the role RBC plays in funding big oil. RBC has promised to be Net Zero by 2050 but we find it difficult to see how this is possible when RBC has no plans of reducing its financing of fossil fuels. If RBC were to acquire HSBC under the current conditions, it would undo the work that has been done by HSBC to tackle climate change.


This deal is an opportunity for RBC and big polluters to continue making even more money while Canadians are dealing with the devastating impacts of the climate crisis. According to the United Nations, Canada is a “low regulation jurisdiction” for climate financing, giving room for financial institutions to behave in destructive ways in the name of seeking more profit. We must follow the path of other countries and move away from financing the oil and gas industry. Despite Canada’s commitment to the Paris Climate Agreement, your government has yet to make any moves to align our financial system with Canada’s climate commitments.


While RBC’s financing of fossil fuels is not surprising considering the lack of environmental regulations in the financial sector, what is appalling is that RBC is funding projects that do not have the Free, Prior, and Informed consent of all Indigenous Nations affected, such as the Trans Mountain Expansion Project.


Moreover, shocking reports that RBC segregated Indigenous and other racialized delegates at their annual shareholder meeting in 2023 are unacceptable.


RBC’s potential acquisition of HSBC comes at a time of historic inflation in Canada. As you know, the cost of living has soared across the country. RBC sees the acquisition of HSBC as an opportunity to reduce competition and make an even more outrageous amount of money at a time when families are struggling to pay their bills. HSBC has historically offered lower mortgage rates to Canadians. According to a report by the Globe and Mail, HSBC beats RBC by 75 basis points on mortgage rates, which translates to over $30,000 in savings over five years for average home prices in Vancouver and Toronto. During this housing and cost of living crisis, we worry not only about the effects of the potential merger on our environmental commitments, but about fewer options and higher prices for Canadians.


Once again, we urge you to reject RBC’s acquisition of HSBC unless RBC implements a credible climate plan and commits to HSBC’s international commitments to end fossil fuel investments. The short-term profits for big bank executives from RBC’s acquisition of HSBC will cost us greatly in the future.


Warmly,


Laurel Collins
MP for Victoria
NDP Critic for Environment and Climate Change


Alexandre Bouleric
MP for Rosemont—La Petite-Patrie
NDP Deputy Leader and Deputy Critic for Environment and Climate Change


Taylor Bachrach
MP for Skeena—Bulkley Valley
NDP Critic for Transport