Canada’s Financial Services:
Fueling Growth Since 1867

When Donald Smith drove in the last spike of the Canadian Pacific Railway on November 7, 1885 in Craigellachie, British Columbia, he was doing more than completing a huge project. A board member (and future President) of the Bank of Montreal, Smith was bringing financial capital and national ambition together in one stroke, highlighting the value of Canada’s banks to building a young and wide-open country.

Smith and Bank of Montreal, of course, are far from being alone in contributing to Canada in this way.

Indeed, Canada’s insurance companies, stock exchanges, investment dealers and banks, among others, have all been financing growth from coast to coast to coast since July 1, 1867, the day Canada was officially proclaimed.

At the time, the country’s financial services sector was small but vibrant.

According to financial historian Ed Neufeld, on that fateful day in Canadian history there were: 35 active chartered banks with approximately 123 branches; 28 building societies; approximately six savings banks; one insurance company (Canada Life Assurance, founded in 1847); and 30 fire insurance companies (in 1869). According to Neufeld, the cumulative assets of these intermediaries amounted to just over $100 million, or roughly just under 33% of the GDP.1

There were stock exchanges in Toronto (founded in 1852) and Montreal (founded in 1842), as well as several specialized brokerages. The new Dominion government also established the Post Office Savings Bank in 1867, which was abolished 101 years later.2

Some financial services companies – such as Bank of Montreal, Canada Life and those two stock exchanges – are older than Canada itself. Others, like the growing array of fintechs starting up across Canada, are brand new.

Canada’s first Prime Minister, Sir John A. Macdonald was also the first president or the Manufacturers Life Insurance Company now Manulife. His vision for Canada’s economic success has helped shaped our path to success.

Together – across platforms and across the country – these firms have grown to form a vibrant and deep ecosystem serving the expanding needs of an increasing domestic population.

Did you know:

  • Sun Life, originally incorporated in 1865, starts operations as Sun Mutual Life Insurance Company of Montreal. By 1920 Sun life operated in 55 countries across the globe.
  • By 1898 there were at least 10 trust companies in Canada.3
  • In 1914-1918, thousands of men and women from Canada’s financial services sector join the war effort. At Bank of Nova Scotia, for example, 612 employees went off to war, with 82 of them killed and 91 wounded.4 Similarly, thousands of financial services employees went to war in 1939.
  • In 1919, Sun Life was the first Canadian company to offer group life insurance.5
  • In 1932, the Canadian Investment Fund Ltd, the country’s first mutual fund, was launched.6
  • In 1934, the “Bank of Canada Act” received royal assent, with Graham Towers, a Royal Bank executive, appointed the new bank’s first governor.7 The Bank opened its doors opens in March the following year.8
  • During World War Two, several financial services executives helped Prime Minister Mackenzie King’s government finance and plan aspects of Canada’s financial contribution to the war effort.
  • In 1954, Bank of Montreal was the first chartered Canadian bank to offer home mortgages.9
  • In 1961, RBC was at the forefront of the information technology revolution by being the first Canadian bank to install a computer.10
  • In 1969, CIBC introduced Canada’s first bank machine in the Cloverdale Mall in Etobicoke (west of Toronto).11

While financing Canada’s domestic growth, financial services have also been at the forefront of international expansion – connecting a huge country with a small but growing economy to the world.

In 1874, for instance, The Canadian Bank of Commerce (became CIBC after a merger) opened an agency branch in New York, the first Canadian bank to take this step following Confederation. [Bank of Montreal had opened the first such New York-based branch by a Canadian in 1855.]

Fifteen years later, in 1889, The Bank of Nova Scotia opened a branch in Kingston, Jamaica, the first branch established by any Canadian bank outside of the United States or the United Kingdom.

Canada’s financial firms have been active in Asia for a long time. In 1992, Manulife was the first Canadian life insurance company to open a representative office in China (Beijing).12

Four years later, BMO became the first chartered Canadian bank to receive a license for a full-service branch in Beijing.13 In each case, these firms – as indeed many others have done – were building off roots they had planted in Asia decades earlier.

The reach of Canada’s financial services companies even goes beyond terra firma. Canadarm, the robotic space arm featured on the new polymer $5 bills, was financed in part by Canada’s capital markets in the late 1970s.

Back on Earth, the physical presence of financial services is clearly grounded in countless towns and cities across the country.

Local bank branches became meeting places in burgeoning frontier towns, as was the case in 1886 when The Imperial Bank of Canada (became CIBC after a merger) opened the first chartered bank branch in Calgary, two years after Calgary was officially incorporated.14

Meanwhile, large iconic buildings – stone-built statements of financial probity – sprang up in expanding cities such as Toronto. In 1931, as the effects of the stock market crash really started to sink in, Canada Life opened its head office on University Avenue in Toronto. [Twenty years later they installed what became a landmark weather beacon of lights on the roof.15]

That same year, The Canadian Bank of Commerce opened its new head office on King, just east of Bay Street. At 476 feet, the 34-storey tower was the tallest building in the British Commonwealth until 196216. It was a structure designed, among other things, to project financial strength in times of financial worry.

Toronto has been home base to a growing number of financial services companies over the years, such that the city is currently home to over 40 per cent of all financial services headquarters employment in Canada.

At the intersection of King and Bay streets, a busy corner often thought of as the heart of Canada’s financial services sector, all four corners feature iconic buildings. Among them is TD Tower, a signature building designed by Mies van der Rohe on the southwest corner of King and Bay Streets and opened in 1967 to help mark Canada’s centennial.17

Yet the roots of Canada’s financial services sector go well beyond its biggest city. Indeed, many of those roots were planted in other cities well before Toronto emerged as a global financial centre.

From furs to fintech, Montreal – celebrating its 375th anniversary this year – has cultivated financial services in many ways over the centuries. Similarly, it was in Halifax that the Bank of Nova Scotia (established in 1832) and the Merchants Bank (established in 1869, later changing its name to the Royal Bank of Canada in 1900) first began making loans to local businesses.

Much farther west, as Canada’s population pushed into the fertile grounds of the prairies, stock markets sprang up to connect capital with opportunities. The Winnipeg Stock Exchange started trading in 1903, with Vancouver following suit with its own exchange in 1907, and Calgary in 1914.18

Governments of all levels have also contributed enormously to Canada’s financial services infrastructure, and thus to all Canadians.

In 1929, just before the worst of the Great Depression hit, the federal government started the Canadian Farm Loan Board (known more recently as the Farm Credit Canada), to extend loans to farmers.19

Similarly, in 1944 – as war continued to rage – the federal government set up the Export Credit Insurance Corporation to help stimulate Canadian exports after the war.20 Two years later, the Central Mortgage and Housing Corporation – which changed its name to Canada Mortgage and Housing Corporation in 1979 – was created so as to house returning war veterans.21

The list of financial services and their milestones goes on.

But it’s more than money, and more than capital. It’s about community.

Employees in Canada’s various financial services have dedicated themselves to supporting innumerable community initiatives – large and small – from coast to coast to coast. They’ve gone to war for their country, and gone to bat for their local sports teams.

What’s more, sponsorships by financial services companies have helped countless Canadians raise money, support charities, run races, enjoy live sports, and enhance their own neighbourhoods.

For just as the railway tied Canada together, so, too, do our financial services companies.

1E.P. Neufeld, The Financial System of Canada: Its Growth and Development, (Toronto: MacMillan of Canada, 1972), pp. 43-44.
2Neufeld, The Financial System of Canada, p. 47.
3Neufeld, The Financial System of Canada, p. 294-295.
4The Scotiabank Story, p. 119.
5“History of Sun Life Financial”, Sun Life website.
6Neufeld, The Financial Services System of Canada, p. 48.
7Donald Fullerton, Graham Towers and His Times, (Toronto: McClelland and Stewart, 1986), p. 55.
8“The Bank’s History”, Bank of Canada website, www.bankofcanada.ca.
9“The BMO Legacy: Two Centuries of Commitment to Customers”, PDF article on BMO website, p. 9.
10“Automating the Branch”, RBC history, RBC website.
11“Technology Pioneers’, CIBC website.
12“Our Story”, Manulife website.
13“The BMO Legacy: Two Centuries of Commitment to Customers”, p. 11.
14“Growing with Canada”, CIBC website.
15“Company History”, Canada Life website.
16“Growing with Canada”, CIBC website.
17“TD’s Timeline”, TD website.
18Neufeld, The Financial Services System of Canada, p. 50.
19Neufeld, The Financial Services System of Canada, p. 49
20“About Us”, EDC website.
21“History of CMHC”, CMHC website.

CANADA 150