Credit unions eye national growth as new merger and federal review promise more competition and choice
Ottawa’s latest budget has cracked open the door for credit unions to finally compete head-to-head with Canada’s banking giants—a move that could transform the financial services landscape for business owners and investors, according to BNN Bloomberg.
Prime Minister Mark Carney’s government has signalled a willingness to review and potentially simplify the rules that govern how provincial credit unions can become federally regulated institutions.
Michael Hatch, vice president of government relations for the Canadian Credit Union Association (CCUA), described the budget bill as “a first step in terms of starting that process,” and said the sector is “very encouraged by it,” as reported by BNN Bloomberg.
Currently, only three credit unions—UNI Financial Cooperation, Coast Capital Savings, and Innovation Federal Credit Union—operate under federal rules.
Hatch argues that the existing process for national expansion is “costly, complex, and time consuming,” but sees new momentum as the federal government and regulators appear ready to streamline the framework, without lowering standards.
For business owners and wealth professionals, the implications are significant.
Credit unions are the largest collective lender to small businesses in Canada, with a local decision-making approach that distinguishes them from larger institutions.
Hatch explained that businesses such as barber shops, laundromats, or restaurants in places like Swift Current, Saskatchewan, or Sydney, Cape Breton, benefit from working with credit unions.
He said, “you don’t have to wait for a lending decision to come down from HQ on Bay Street in Toronto.”
Instead, lending decisions are made locally.
The CCUA, representing $301bn in assets and 187 credit unions outside Quebec, notes that credit unions hold a 16 percent share of the mortgage market and support 277,000 small and medium-sized businesses.
Hatch also points to competition as a critical tool for addressing inflation and cost-of-living pressures.
“If you increase competition, that will have a downward impact on prices and inflation over time. And that’s one no-cost option that’s available to the government,” he said.
The Competition Bureau has echoed this, warning that robust competition is especially important as borrowing costs reach generational highs.
Meanwhile, the sector is seeing a new wave of consolidation designed to strengthen rather than diminish member value.
First Credit Union members have voted in favour of merging with Vancouver City Savings Credit Union (Vancity).
Linda Bowyer, CEO of First Credit Union, described the merger as “a thoughtful alignment of our cooperative values.”
According to a joint press release, the merger will create a combined entity.
Wellington Holbrook, CEO of Vancity, referred to it as “a truly historic moment for the cooperative movement in British Columbia,” and noted the opportunity for the organizations to work together.
