Can Credit Unions Keep Their Un-Bank Identity Amid a Merger Frenzy?

Plus: Canada's tax on foreign streaming companies appears to be dead, and Big Cannabis keeps getting bigger

Photo by Jonathan Cooper on Unsplash

In Canada, credit unions have long been hailed as a more customer-friendly alternative to the big banks. But with these institutions merging at a head-spinning pace, some industry experts are wondering if they might be in danger of becoming the opposite of what they’re supposed to be.

The latest potential merger is between British Columbia’s Cascadia Credit Union and Greater Vancouver Community Credit Union (GVC), respectively based in Summerland and Burnaby, who announced a potential tie-up in late April.

In a press release at the time, the duo said they were looking into whether a merger would “create a strong credit union that can provide enhanced services and financial advice to all of our members for many years to come.” A Cascadia spokesperson told Do Not Pass Go that the two credit unions expect to issue an update on their process next week.

A combined entity would have more than $1.3 billion in assets, 20,000 members and six branches. Cascadia itself was formed last year as a result of an amalgamation of Summerland Credit Union, Osoyoos Credit Union and Revelstoke Credit Union. The proposed deal is also subject to a mandatory review by the Competition Bureau, which automatically looks at all mergers where the target exceeds $93 million in assets or revenue.

If it goes ahead, the transaction would be the latest in a recent flurry of mergers that includes fellow B.C. credit unions Prospera, Coast Capital and Sunshine Coast, which joined forces earlier this year, as did Kawartha and Libro in Ontario last October. Connect First and Servus, two of Alberta’s largest credit unions, merged in 2024, as did Windsor Family and Rapport in Ontario. The Rapport acquisition was Windsor Family’s third in Ontario since 2020, following deals with Education Credit Union and Healthcare Credit Union.

This recent wave of consolidation has brought the total number of credit unions in Canada to around 150, a number that has steadily shrunk from a high of around 5,000 in the 1960s. Not including Quebec’s Desjardins, which operates more like a bank, Canada’s credit unions collectively held about $330 billion in assets at the end of 2025. That was up 5.1 per cent from a year earlier, though the total is a comparative drop in the bucket compared to the $9 trillion-plus in assets held by the big six banks.

Credit union mergers can result in benefits for customers, otherwise known as members, in the form of new services and product offerings, lower rates and better branch hours, but complaints also frequently show up. These range from criticisms about new and different systems, hours or fees, to worse customer service or, as is often seen in online fora such as Reddit, the particularly damning accusation of the credit union “starting to feel like a bank.”

The critiques are sometimes warranted, industry experts say, as credit unions have frequently established themselves by prioritizing personalized customer service and community-building. Many are based in small towns, where they have historically been the only banking services provider, or are rooted in a particular ethnic or religious community.

When such institutions merge and adopt new management, policies or procedures, they risk running afoul of what originally made them appealing to members.

“Merging can negate or dilute what is the secret sauce of the credit union that caused you to join in the first place,” says Doug MacDonald, a Toronto-based credit union advisor. “There’s a community in there, there’s multi-generational service, there’s common goals, there’s support of those things. You might lose that if you were to join a larger credit union, and that’s always a balance.”

Despite that risk, the merger wave is happening for a variety of reasons, with ongoing technological change and increasing regulatory burden among the key factors.

Like banks, credit unions have been required to invest in a steady succession of technologies over the decades, from automated banking machines and online platforms to open banking. But unlike banks, many credit unions have lacked the size and scale to pay for these developments, as well as their associated regulatory compliance costs.

For much of the 20th century, credit unions managed to largely share these and other common costs through collective associations such as Central1, Alberta Central and Atlantic Central. These organizations provided their respective provincial credit unions with one-stop shops for technology and regulatory compliance, human resources, marketing, education and training, and many other services.

But, as some credit unions grew bigger, they inevitably wanted more control over how the associations were run, leading to a fracturing of collective efforts.

“They started wanting more say in the governance of the centrals and less of this redistributive pricing kind of thing, and then they started thinking, ‘Well, we can do a lot of this stuff in house,’” says Marc-Andre Pigeon, an assistant professor at the University of Saskatchewan and the director of the Centre for the Study of Co-operatives.

“Now it’s like each credit union kind of has to fend for themselves, so they bring less of that collective weight to the market than they used to.”

Part of the problem has also been that credit unions have been hemmed into operating only in their own provinces, with regulations either preventing or making it difficult to expand into other parts of the country, either organically or through acquisition.

Only three – B.C.-based Coast Capital, New Brunswick’s UNI Financial and Prairies-based Innovation – have been operating under a federal charter. They were joined in April by a fourth, B.C.-based First West, which renamed itself Tru Cooperative to mark the status change.

Though the path to what’s known as federal continuance has been open to credit unions for more than a decade, the process has been too burdensome for many to bother. As Pigeon notes, First West’s conversion took seven years.

The federal government appears to have recognized this issue and, with its stated position of wanting to inject more competition into the banking sector, is making it easier for credit unions to grow – and merge.

Last year’s fall budget contained measures designed to streamline the process, much to the delight of the Canadian Credit Union Association, the industry trade group that lobbied for the changes.

“Consolidation is happening in our sector for a lot of the same reasons that it happens in other sectors of the economy,” says Michael Hatch, vice-president of government relations for the CCUA. “Our members in many cases need to achieve scale to efficiently cover some of these costs, and organic growth is often not sufficient to achieve the scale that they need.”

With the runway now clearer for inter-provincial growth and mergers, the already rapid pace of consolidation may speed up even more. That’s only going to further sharpen the focus on credit unions’ main selling point – that they’re not big banks. As observers point out, if they are to indeed function as viable alternatives, they will to need to remember what differentiates them in the first place.

“The challenge for credit unions is how do they get to be big enough to succeed effectively, but also be different in terms of, ‘I got your back,’” Pigeon says. “There’s something lost in that process. It’s an identity thing.”

And now, onto the rest of the competition news…

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🎧 ON THE PODCAST THIS WEEK:

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✈️ AIRLINES

• It’s possible this news item is irrelevant by the time you read it as negotiations are ongoing, but as of early Friday afternoon WESTJET flight attendants are scheduled to go on strike. The union representing the attendants issued their 72-hour notice on Thursday, meaning a strike could begin as soon as the clock ticks over into Sunday. The main issue in dispute is attendants wanting to be compensated for currently unpaid hours that they spend on the ground. Their counterparts at AIR CANADA went on strike over the same issue last summer and ultimately won concessions from the airline, though not before the federal government unsuccessfully tried to force them back to work. As documents turned up by Do Not Pass Go in April showed, Air Canada used scare tactics on the government during that labour dispute. Regardless of how the current dispute turns out, we’ll be looking into whether WestJet tried the same.

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🕺 ENTERTAINMENT & SPORTS

• Big news in the ongoing WARNER BROS. saga as PARAMOUNT late last week agreed to delay its $111-billion (U.S.) acquisition of the studio to as late as June 2027, in order to deal with legal challenges. The announcement follows a judge issuing a temporary restraining order last week in response to a group of U.S. states challenging the mega-merger, which they say will harm production and output in the news and entertainment industries. Paramount had said it was confident the deal would close by the end of September, after which a “ticking fee” comes into effect. The company will be required to pay Warner Bros. a $7 billion breakup fee if the deal falls apart.

• As if to pour vinegar on the wounds of those people upset by the recent demise of free Hockey Night in Canada on CBC, ROGERS this week announced a deal that will see Wednesday-night national games broadcast exclusively on AMAZON’s streaming service. Prime Video will also carry select Stanley Cup playoff series in additional to at least 26 regular season games, with Rogers’ Sportsnet retaining the majority of the rest. The deal, which follows Rogers’ recent cementing of full ownership over Maple Leafs Sports & Entertainment and which further fragments games across several paid services, runs through the 2037-38 season.

• The so-called NETFLIX tax appears to be dead, according to court documents unearthed by The Wire Report this week. Back in May, the Canadian Radio-television and Telecommunications Commission’s implemented a levy on foreign streaming companies including Netflix, AMAZON and APPLE, that would see 15 per cent of their Canadian revenue go to funds supporting local content production. The ruling would have increased the existing 5-per-cent levy, which the streaming companies have been fighting in court since 2024. The federal government nixed that ruling in June, instead promising additional public funds for Cancon production while also stating that the streaming companies’ contributions “won’t be zero.” However, in a letter sent by the government to the Federal Court of Appeal dated July 17, it looks like those contributions will indeed be nil. “We are instructed to inform the court that the government’s intention is to eliminate the base contribution requirement on streaming services and to provide government funding to replace those contributions,” said letter from the attorney general’s office.

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📱 TELECOM

• Speaking of the CRTC, the regulator has temporarily suspended deadlines in its investigation of new wireless fees being charged by BELL, ROGERS and TELUS. The regulator launched the probe, known as a show-cause proceeding, a few weeks ago after the carriers refused to scrap the new fees, which they introduced last month to coincide with a ban on charges that are designed to prevent or discourage customers from switching providers. The CRTC had written to the companies to inform them of its belief that these charges, which range from device handling to SIM card fees, were in violation of the rules. Submissions and interventions were due by July 30, but the regulator on Wednesday temporarily suspended the deadlines. The CRTC could not say why it went with a suspension rather than an extension, but explained that it needs to consider procedural request from relevant parties. “Once those requests have been addressed, the CRTC will establish new deadlines, giving all parties sufficient time to consider the determinations and prepare their submissions,” spokesperson Mirabella Salem says. “The CRTC expects this to result in only a short delay before the revised deadlines are announced.”

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💾 BIG TECH

• This happened last week but we missed it in the roundup, so it’s incumbent to mention it here because it’s big – the European Union has hit GOOGLE parent Alphabet with a 890-million-euro ($1.4 billion Canadian) fine for favouring its own services and preventing other apps from steering users to money-saving alternatives. Roughly half the penalty was issued for Google preferencing its own shopping, hotels, transport and sports services in search results. The remainder was for restrictions on the Google Play app store, which prevent developers from directing users to cheaper offers on rival app stores or websites. Google reacted angrily and said it may fight the findings in court. “To comply, we are having to strip away real-time search features Europeans love like instant pricing and direct availability ‌for hotels, flights, and restaurants and dismantle safety protections on Google Play,” the company said in a statement. “This isn’t fair competition, it’s product degradation driven by a small group of self-serving complainants, with European businesses and consumers taking the hit. Regulation should improve products, not make them worse.”

• It’s not every day that we hear of an antitrust ruling out of China, much less a massive one, but lo and behold local travel website operator TRIP.COM GROUP has been hit with a 5.2-billion-yuan ($1 billion Canadian) fine for monopolistic behaviour. The company, which runs Ctrip, Skyscanner and other brands in the country, was found to have restricted competition through exclusive partnerships and funnelling traffic to specific hotels. The company also prevented some hotels from working with other platforms and required them to list their lowest prices on its outlets. In stark contrast with Google’s reply above, Trip.com said it “sincerely accepts and will resolutely comply” with the findings.

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🛒 RETAIL

• Big Cannabis is getting bigger, with Edmonton-based SNDL this week announcing that it had completed the acquisition of some assets belonging to SURTERRA HOLDINGS, a U.S. company with operations in Florida, Texas and Massachusetts. The acquisition, made under Surterra’s foreclosure, gives SNDL a 249-store cannabis retail network – the largest in the world – and “represents a defining milestone in our strategy to become a leading vertically integrated North American cannabis company,” according to a release. SNDL, which is also involved in liquor retail, owns cannabis retail brands including Spiritleaf, Value Buds and Cost Cannabis.

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🚨 COMING UP

Think you’re safe from monopolies while you sleep? You may be in for a rude awakening. Lexington, Kentucky-based Somnigroup has been on an acquisition spree over the past few years and is on the verge of becoming a vertically integrated giant with interests in nearly every part of the sleep business. Meanwhile, Toronto-based Sleep Country has been on a similar acquisition tear and is now expanding into the United States. Independent mattress retailer NATE CANGEMI joins the Do Not Pass Go podcast this Tuesday to talk about how this growing duopoly is leading to higher prices, homogenized choices and worse sleep for consumers.

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