A letter arrived last week from TD Bank. "In order to continue to meet your banking needs …" it began.
Try to guess what came next. Hint: I'm a customer at a Canadian bank.
Sure enough, "We sometimes need to adjust our pricing."
Unsurprisingly, the prices being adjusted were not being adjusted downward.
As of March, the bank's "non-TD ATM fee" is being raised 33 per cent.
Fees for cancelling an Interac e-transfer and for holding a post-dated cheque at a branch are going from free to $5. And the fee for transferring a tax-free savings account to another bank is going from free to $75.
These are huge increases, far in excess of growth or individual spending power.
Now, it's important to understand TD's position. The bank's profits were $8.02 billion last year, up only slightly from $7.88 billion the year before.
- Canada's big banks earn $35B profits in 2015
- TD joins rest of Big Five in raising bank fees
- Bank fee outcry unites consumers and even politicians
It remains only the second most profitable bank in Canada. Its shareholders clearly expect better.
No increase in U.S., mind you
It's worth noting, though, that in the U.S., where TD is now a serious player, with more branches than in Canada, the bank plans to impose no fee increases on customers come March.
"Totally different environment," a TD spokeswoman told me.
Translation: There's a lot more competition there, and if TD tried charging the sorts of fees it imposes on the bank's supine Canadian flock, some other U.S. bank would be in there siphoning off business before you could say "special offer."
Up here in Canada, TD's letter advises customers that if they don't want to accept the fee hikes, they are free to close their accounts, "without cost or penalty."
It's all part of being Canadian. The equation is simple: Canadian consumers and workers are protected from certain free-market excesses, but that coddled security comes with a price: oligopolies, in which a few firms dominate, and all the behaviour that flows from that.
If you want a really depressing bit of Canadian reading, go look at the Canadian Competition Bureau's policy on "price maintenance," something most of us know as "price-fixing."
Certain companies, especially in the luxury trade, try to see to it that their products never go on sale. Rolex is one. Canada Goose, the world-famous Canadian parka-maker, is another.
This offends capitalism: in a free market, one of the few responsibilities of government is to monitor and punish efforts to deaden competition.
In fact, "price maintenance behaviour" was a criminal act in Canada, until Stephen Harper's Conservatives changed the law in 2009 (though some forms of price-fixing still remain a crime).
The new law reduced price maintenance to a non-criminal offence, and even at that, it now has to be proven that "price maintenance conduct has had, is having or is likely to have an adverse effect on competition in a market."
In other words, the government has to prove that price fixing results in fixed prices.
It gets worse. Read deeper, and the Competition Tribunal mind-bogglingly advises that:
"Price maintenance practices … can be pro-competitive in many circumstances."
Having made that remarkable declaration, it unleashes a stream of obscurantism: "Price maintenance conduct can stimulate inter-brand competition among competing brands of products, such as by facilitating the entry or expansion of competitors by encouraging retailers to stock and promote the supplier's products …"
And so on. Bottom line: Price fixing can be good for you, people. Eat your bran.
Free the Goose
For the record, Canada Goose's CEO says that even though Canada Goose products never go on sale, the company does not engage in "retail price maintenance."
Because, says Dani Reiss, sales are never necessary. Canada Goose says the company's coats are so desirable that demand always exceeds supply, and people are happy to pay full price. A sale, he said in an email reply to questions, "is just not something we or our retailers have needed to do."
He has also said publicly that Canada Goose is careful to choose retailers that share the company's values.
Evidently. When Sporting Life, which describes itself as Canada Goose's largest retailer, sent me a $50 gift card recently, an employee at the store explained that it applied to everything in Sporting Life's huge inventory, except for anything made by Canada Goose, even its gloves and hats: "We just can't," she told me.
Now, to be fair, the market has changed in the last 20 years. Retail margins have been shaved to extremes, at least in the hyper-competitive U.S. market.
There is also "showcasing," which is the practice of visiting a store, taking advantage of its sales staff, examining the product, then going home and finding the cheapest price on the internet.
Lawson Hunter, formerly the federal government's head of competition enforcement, says "suppliers are being forced into national pricing" by the availability of price-checking, and the fact that "everything is now online."
Well, perhaps in the U.S. There's far less disparity in prices at Canadian retailers with internet sites.
In any event, by far the most anti-competitive force in the Canadian economy is government, says Lawson.
Just look at the efforts to squash Uber, he said: "Governments love supply management."
After trying to make sense of the gibberish on its website, I asked the Competition Bureau how many times it's gone after companies for what it calls price maintenance since it issued its new "enforcement guidelines" in 2014.
The answer: None. Zero.
"Nevertheless," said a spokeswoman in an email, Canadians should rest assured the bureau remains vigilant: "The Competition Bureau will not hesitate to take appropriate action where it believes price maintenance has occurred."
Okay. Good to know.
Clarification: This story was changed to note that the Competition Bureau has not gone after any companies for "price maintenance" since the guidelines were changed in 2014. It has, however, pursued cases of price fixing among competitors.Feb 17, 2016 7:24 PM ET