Trump wrong, U.S. banks can and do operate in Canada, association and professor say

The sign to a Citibank location is shown in San Francisco, Tuesday, April 25, 2023. THE CANADIAN PRESS/AP-Jeff Chiu

The association representing bankers in Canada says U.S. subsidiaries and branches represent half of all foreign bank assets in the country, despite false claims by U.S. President Donald Trump that American banks can’t do business north of the border.

“There are 16 U.S. based bank subsidiaries and branches with around C$113 billion in assets currently operating in Canada,” the Canadian Bankers Association said in a statement Monday.

“These banks specialize in a range of financial services, including corporate and commercial lending, treasury services, credit card products, investment banking and mortgage financing. They serve not only customers with cross-border business activities, but also Canada’s domestic retail market.”

Trump had posted on his social media platform, Truth Social, Monday that “Canada doesn’t even allow U.S. banks to open or do business there.”

The president’s claims came hours before Prime Minister Justin Trudeau announced Monday that Trump’s threat of U.S. tariffs on Canadian goods had been paused for 30 days while the two countries work together on what Trump called a “final economic deal.”

Laurence Booth at the Rotman school of management at the University of Toronto said Trump was mistaken when it came to foreign banking in Canada.

Booth said Canada’s federal Bank Act has for years regulated how Canadian and foreign banks are able to operate.

The legislation divides banks in Canada into Schedule I, II or III, with Schedule I consisting of Canadian banks that are legally able to accept deposits.

Fifteen foreign banks, including three with U.S. parent institutions, are Schedule II banks that are subsidiaries of foreign banks that can do business in Canada and accept deposits.

Booth said dozens of other foreign banks are listed under Schedule III, meaning branches are mostly used for wealth management and corporate services, and direct business to their parent corporation rather than being a subsidiary.

“So, there’s actually nothing to stop an American bank operating in Canada as a separate subsidiary under Schedule II of the Bank Act,” he said.

“And in fact, at one point, the central bank and the Department of Finance particularly were actively encouraging U.S. banks to come into Canada to inject more competition into the Canadian banking market.”

The Office of the Superintendent of Financial Institutions lists Amex Bank of Canada, Citibank Canada and J.P. Morgan Bank Canada on Schedule II as all having U.S. parent companies.

The bankers association, which represents more than 60 domestic and foreign banks operating in Canada, provided a list of the 16 U.S.-based banks operating under Schedule II or III which also includes Capital One, Wells Fargo and Comerica Bank.

This report by The Canadian Press was first published Feb. 03, 2025