Boosting Productivity: Bank of Canada’s Rogers Advocates for Competition in the Financial Sector
Bank of Canada’s Carolyn Rogers: Competition in Canadian Financial Sector Key to Boosting Productivity
Toronto, October 9, 2025 – Carolyn Rogers, Senior Deputy Governor of the Bank of Canada, said competition in Canada’s financial firms can boost productivity. She spoke at the Canadian Club in Toronto. In her speech, Rogers linked ideas closely. Each word connects directly to the next, so the message stays tight and clear.
Productivity Slump Poses Urgent Challenge
Canada’s productivity has stalled. Rogers calls this an emergency. New data shows a 1% drop in productivity in the second quarter of 2025. This drop is the largest in three years. It comes as trade tensions with the United States rise. Rogers links the drop to the need for reforms.
She explained, “Higher productivity won’t make Canada immune to U.S. trade policy, but it would help buffer the effects of tariffs.” Rogers adds, “This is the clearest path to boosting real wages, and it helps make life more affordable.”
Competition as a Driver of Innovation and Efficiency
Rogers says competition forces firms to work fast and smart. It makes them invest in new ideas and improve services. She uses a hockey metaphor: “You always skate a little harder in the game than you do in practice. And when the game starts, the tougher the opponent, the harder you skate.”
Today, six large banks hold about 93% of all banking assets. This strong hold brings stability. Still, strong ties can slow productivity, limit innovation, and reduce consumer choices. Rogers lets us know, “Many argue that this level of concentration has clear negative impacts.”
Emerging Reforms Aim to Enhance Contestability
Looking ahead, Rogers sees hope in new reforms. Regulators and technologists want to open up the financial field. One plan is open banking. Open banking gives consumers more control over their data. This change connects banks and buyers more closely and fairly.
Another plan is the Real-Time Rail project. This project will update payment systems so firms can send money instantly. Rogers points to a study that sees more than $3 billion in efficiency gains in five years. She builds the idea on a clear link between instant payments and more economic strength. “The experiences of countries with instant payment systems show that these systems have real benefits,” Rogers said.
Balancing Competition with Stability and Inclusion
Rogers also warns that more contest does not mean no rules. Too much competition risks underinvestment and financial harm. It may also expose vulnerable groups to risky practices. Rogers stresses, “We need to ensure that while we encourage contestability in finance, transport, telecoms, and energy, we do not sacrifice stability or equal access.”
Global Regulatory Context
Rogers notes that other nations also shape their rules. The United States is cutting back on financial sector rules. In the United Kingdom, Chancellor Rachel Reeves said regulation can hold businesses back. These signals point to a worldwide trend. Each idea is linked clearly to the next, with short connections that show how change can build fresh strength.
Conclusion: Embracing Competition for Economic Growth
In her closing words, Rogers told policymakers and leaders to “lean into” competition. This means taking steps that connect competition directly with stronger productivity, better wages, and a solid economy. She shows that even with tradeoffs, a clear and close link between ideas leads to innovation and growth.
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