Trump falsely says U.S. banks aren’t allowed to do business in Canada. What

U.S. President Donald Trump said on Monday that U.S. banks are not allowed to operate in Canada, echoing an earlier statement he’d made on his Truth Social platform — but the claim is false.

“American banks are not allowed to do business in Canada. Can you believe that?” he said to a room of reporters. Trump has mentioned Canada’s banking sector several times recently in relation to trade tensions, suggesting that he has another bone to pick as a tariff dispute simmers between the two countries.

Several U.S. financial institutions have operations in Canada. They fall under the Schedule 2 category (foreign-owned banks with Canadian subsidiaries), and they include JPMorganChase, which has about 600 employees on this side of the border, and Citibank, which has operated in Canada for more than a century.

So what might the U.S. president be referring to? 

“It’s somewhat exaggerated. [U.S.] banks can operate in Canada, but if they really want to be major players, it’s a little more difficult,” said Lawrence Kryzanowski, a professor of finance at Concordia University’s John Molson School of Business.

Regulations, loyal clients dissuade U.S. banks

Foreign banks might not want to move into Canada because of tough competition. Canada’s banking industry is highly concentrated, with its big six domestic banks — Royal Bank, Bank of Montreal, Scotiabank, CIBC, TD Bank and National Bank — accounting for the vast majority of total bank assets.

The Big Six already have an extensive and entrenched network of loyal clients in the domestic market, which makes it harder for foreign banks to get a foothold here: “It’s not a very exciting market for a large U.S. bank,” said Kryzanowski.

“If a foreign bank goes in and they want to set up a network, they have to get a lot of retail customers to switch.”

Canada’s Big Six fall under the Schedule 1 category — meaning they must be Canadian-owned institutions that take deposits. Any American bank that wanted to buy a major Canadian bank would face these and other restrictions.

Even smaller Schedule 1 banks face ownership limits, said Kryzanowski, because 35 per cent of the bank has to be publicly owned. “Typically, if an American bank is going to move into Canada, they want to have complete control.”

There are arguments to be made for and against the Canadian banking’s strict regulatory environment, he added.

Canadian banks known for stability

The regulations make it difficult for foreign competition to compete here, but they’ve also given Canadian banks a reputation for stability.

“The big difference between…