Canadian banks are rolling out low-cost chequing accounts this week, the result of a federal push to make everyday banking more affordable. While proponents are touting added choice for consumers, some economists and fintechs argue a better way to make banking more affordable is to increase competition in the notoriously concentrated sector. 

On  Dec. 1, 14 banks—including the country’s Big Six—began offering $4 accounts to all Canadians, and free accounts to seniors, students, people aged 18 or younger and Registered Disability Savings Plan beneficiaries. Newcomers are eligible for a free account during their first year in the country. Lenders are also extending no-cost accounts to one of three optional groups: Indigenous peoples, Canadians receiving certain provincial or territorial social-assistance benefits, or Disability Tax Credit recipients.

The changes come as banks increasingly rely on the fees these services generate. Nearly 48 per cent of their revenue in 2022 came from non-interest income, which includes everyday banking charges, according to the Canadian Bankers Association. Service charges on retail and commercial deposit accounts totalled almost $6 billion in the third quarter of 2025, up 267 per cent from $1.56 billion in the same quarter of 1996, data from the Office of the Superintendent of Financial Institutions show.

Banks have said little about how the new requirements could affect their business. Scotiabank, RBC and CIBC declined to comment, referring questions to the Canadian Bankers Association (CBA). In an emailed statement, Nathalie Bergeron, a spokesperson for the CBA, said that consumers have ample banking alternatives. “With more than 100 account packages to choose from, Canadians with different financial needs benefit from a wide range of banking options in the marketplace.” 

When asked questions including how the changes could impact banks’ financials and competition in the sector, Bergeron declined to comment.

National Bank, Bank of Montreal and TD Bank did not respond to requests for comment. 

The new measures build on Ottawa’s earlier efforts to reduce banking costs. In October 2023, then-deputy prime minister Chrystia Freeland ordered banks to lower non-sufficient-funds fees, which were between $45 to $48. Those charges will drop to $10 starting March 2026, a move that could save Canadians $600 million a year, estimates Tina Filion, a partnerships and education specialist at the Credit Counselling Society.

The low-cost account framework itself dates to 2014, when nine financial institutions signed the original voluntary commitment. The federal government asked the Financial Consumer Agency of Canada (FCAC) to work with banks to update it in the 2024 budget as Canadians faced rising cost of living pressures.

“FCAC supported the development of the modernized commitment based on research and consultations with Canadians, stakeholders, other government organizations, and industry,” Nadine Légaré, media strategist at FCAC, said in an emailed statement.

Andrew Spence—a veteran economist and longtime critic of the Big Six’s dominance—said the new ruling amounts to a political solution rather than a structural change. Canadians, he said, continue to “overpay for banking services” because the system remains tightly controlled by a handful of institutions.

“Do you want to have a banking system where the federal government is constantly intervening to set prices at which the banks can transact?” Spence said in an interview. More built-in competition, he argued, would better limit the banks’ ability to set fees in line with their revenue goals.

A February 2024 report by North Economics found that Canada’s biggest five banks extract significantly more fees—relative to the deposits they hold—than major U.K. retail banks. The country’s Big Six banks—among the most capitalized financial institutions in the G7—control 93 per cent of the banking sector, according to a November Fraser Institute report co-authored by Spence.  

Policymakers and regulators, who for decades emphasized safety and stability as the pillars of Canada’s financial system, are also now pivoting, with some calling the country’s financial sector an “oligopoly.”

Challenger banks and fintechs have long championed free accounts as part of their value proposition, attracting customers eager to avoid the fees associated with traditional banks.

Wealthsimple spokesperson Jessica Oliver said the changes mark a positive step for both the sector and Canadians. In a statement to The Logic, she said the new regulations aren’t a “shift” for the fintech, but rather a “validation of the business model [they’ve] been building toward for years.”

Dan Broten, head of EQ Bank, similarly noted that the industry has historically been “high on fees, low on value,” emphasizing that true competition goes beyond pricing and rests on better product offerings. He warned the rollout could confuse customers and lead to unexpected fees, depending on how banks implement it. 

“I really hope this is an inflection point for customers that need to make a switch, or have the opportunity to make a switch, to do their research and look at what’s best for them across all of the value dimensions, not just the fee dimensions,” Broten said.

Spence said one powerful lever is open banking, which would require financial-services businesses to share data at a customer’s request to power payments and services. He called recent federal moves to advance the legislation encouraging, even without a set timeline, but noted Canada remains far behind its peers in adopting the framework.

“Why are we so late to the game? The answer is, because it could potentially wipe out a very large percentage of non-interest income for the banking sector,” he said.