Federal credit unions can give Canadians more choice and build domestic financial capacity, but Ottawa must ensure its merger and regulatory frameworks allow credible challengers to grow.
LANGLEY, B.C. and OTTAWA, ON – Canada’s next chapter of economic growth will depend on our ability to build, buy, invest, and compete at home. While much of the current conversation is focused on energy, infrastructure, housing and trade, banking belongs in this conversation too. Economic sovereignty is, at its core, about the capacity to act: to finance our own growth, invest through uncertainty, and make national decisions based on Canadian priorities. That requires strong domestic financial institutions with the scale to support our households, businesses, and communities, large and small, across the country.
Federal credit unions such as Tru Cooperative Bank are ready to help build that capacity; however, if Ottawa wants more competition in financial services, it must ensure that credible Canadian challengers have a practical path to grow. Tru Cooperative Bank serves approximately 290,000 members with approximately $21 billion in total assets and assets under administration. Our experience has shown what greater scale makes possible: stronger investment in technology and cybersecurity, more capacity to support growing businesses and communities, and a broader range of services for members.
Over the past decade, however, the middle tier in Canada’s banking system virtually disappeared. Now, a small number of very large banks dominate the national market, while most credit unions remain smaller and regionally focused. Canada needs more institutions between those two ends of the market: strong Canadian-built and owned competitors that combine national capabilities with local accountability. Building the middle tier would give Canadians more choice and would also give Canada greater financial depth, resilience, and capacity to act on its own priorities.
The case for a stronger middle tier
Canada’s missing middle is not an abstract market-structure problem. It affects the choices available to Canadians. A family in Ontario renewing their mortgage benefits when more institutions can compete for business. A growing business in British Columbia’s Fraser Valley benefits from a lender that combines local knowledge with the capacity to support its next stage. Smaller communities benefit when financial institutions can preserve local decision-making while investing in modern products, technology, and essential community infrastructure. Competition also affects the pace of innovation. Large banks have enormous capacity, but challengers create pressure to improve service, sharpen pricing, and move faster. Smaller financial institutions often bring fresh ideas and closer customer relationships but may lack the scale to extend these advantages nationally.
The Competition Bureau has repeatedly emphasized the importance of stronger competition in financial services. Yet, significant barriers make it difficult for challengers to enter, expand, and compete, and for Canadians to gain the benefits of greater choice, affordability, and innovation.
Scale with a purpose
Federal credit unions like Tru Cooperative Bank are owned by their members, not outside shareholders. We are democratically governed and rooted in the communities we serve. Earnings are reinvested in our members, our operations, and our communities, supporting better technology, small-business lending, local economic development, and rewarding career opportunities that allow people to build their futures in their own communities.
But cooperative ownership is not an argument for staying small. Responsible and sustainable scale matters in banking. It creates the capacity to invest in cybersecurity, fraud prevention, digital banking, and new products, while spreading costs across a broader membership. The objective is not growth for growth’s sake.
It is purposeful growth that delivers greater value to members, creates stronger Canadian competition, and builds more financial capacity here at home. For federal credit unions, mergers are one of the most practical ways to achieve that scale.
Publicly traded banks can raise capital through public markets. Federal credit unions primarily build capital through retained earnings, member investment, and other permitted instruments. Bringing strong credit unions together can expand their capital base, spread the costs of technology, regulation, and product development, and preserve Canadian ownership while building national capability.
We are beginning to see the potential. In April 2026, Innovation Federal Credit Union and ABCU Credit Union completed what they described as Canada’s first interprovincial credit-union merger. At Tru, our proposed combination with Libro Credit Union, announced in September 2026, would bring together two strong financial cooperatives, and create an organization serving approximately 470,000 members, with nearly $33 billion in total assets and assets under administration. The proposed transaction remains subject to member and regulatory approvals. These developments are signs of progress, but they also make the next policy challenge clear: Becoming federally regulated creates the jurisdiction to grow nationally, but it does not, on its own, make national growth straightforward.
What needs to change
Ottawa has taken an important first step by modernizing parts of the federal credit union merger framework. Now it must make sure that framework works in practice. Three priorities stand out.
First, provide clear merger regulations and appropriate tax treatment. Recent legislative changes must be supported by clear regulations and timely implementation. The tax rules should also ensure that a combination of two credit unions does not create unintended consequences for the institutions or their members merely because membership shares must be exchanged, aligned, or refunded.
Second, make federal reviews work as one system. A merger involving a federal credit union will involve the Office of the Superintendent of Financial Institutions, the Competition Bureau, the Financial Consumer Agency of Canada, the Canada Deposit Insurance Corporation, and the Department of Finance. Each has an important and distinct mandate. Applicants should not, however, face duplicative information requests, uncertain timelines, or conflicting interpretations of the same prescribed requirement. Federal agencies should coordinate their reviews, establish transparent service standards, and identify a lead process wherever possible. The review framework should also distinguish between a transaction that entrenches a dominant incumbent and one that creates a stronger challenger.
Third, align capital and regulatory requirements with the institution and the risk. Federal credit unions support rigorous oversight. We accept deposits, extend credit, and manage risk. No responsible cooperative leader is asking for weaker consumer protection or lower standards of safety and soundness. But equivalent standards do not always require identical requirements.
Regulations should reflect an institution’s size, complexity, business model, and actual risk. Rules designed around trillion-dollar, systemically important banks can have a materially different effect when applied to a mid-sized cooperative. As a CEO, I see those trade-offs directly. Time, capital, and management capacity devoted to duplicative or disproportionate requirements cannot also be invested in cybersecurity, digital banking, member experience, or small-business lending. Proportionate regulation would preserve strong oversight while allowing more resources and focus to flow to the outcomes policymakers and Canadians want.
A Canadian choice at national scale
Tru Cooperative Bank and other federal credit unions can combine national capability with member ownership, local accountability, and a long-term commitment to Canadian communities. The federal government deserves credit for beginning to modernize the framework.
The task now is to finish the job: implement clear merger rules, make federal reviews work as one system, and apply requirements in proportion on an institution’s risk.
At Tru, we are ready to invest, grow, and earn Canadians’ business. We are not asking government to guarantee an outcome or weaken oversight. We are asking for a framework to protect Canadians while allowing genuine competition to emerge. Building Canada’s financial capacity with Canadian-built and owned financial institutions means putting more of our economic future in Canadian hands. This is economic sovereignty in practice. Federal credit unions are ready to make this vision a reality.
