Abstract
The growing polycrisis in Canada and elsewhere associated with deteriorating living and working conditions have increased calls for a post-capitalist socialist economy. Among the means of accomplishing this goal is the late Erik Olin Wright’s argument for eroding capitalism by developing alternative economic structures and processes that enable equality and fairness, democracy and freedom, and community and solidarity in a post-capitalist society. In this article, we consider how one of the means cited by Wright for eroding capitalist structures, credit unions, can contribute to this goal. Credit unions are non-profit and member-owned financial institutions that in addition to offering all the services of for-profit banks, usually at lower costs to clients, provide an alternative public ownership model to capitalist finance and privately owned food production and distribution, housing, transportation, and telecommunications. We also propose that in addition to providing a model of collective ownership credit unions can – in collaboration with other social movements – take on a broad advocacy role calling for public policy that more equitably distributes economic and social resources to the population.
I’ve seen my brothers working, Throughout this mighty land, l prayed we’d get together, And together make a stand. Then we’d own those banks of marble, With a guard at every door, And we would share those vaults of silver, That we have sweated for!
Introduction
The polycrisis in many nations is drawing attention to some of the inherent contradictions of late-stage capitalism embodied in the conflict between capital accumulation – that is, profit making – and social reproduction – the ongoing functioning of society (Jayasuriya 2023). In Canada, capitalism’s relentless quest for profit making is creating crises of income and wealth inequality, housing and food insecurity, precarious work and deteriorating working conditions, declining benefits and services, and threats to the environment, among others (Raphael & Bryant 2025). These developments have led to increasing calls for a rupture in Canada and elsewhere between the present-day capitalist economic system toward a post-capitalist socialist society (Chibber 2022; Meiville 2022; Wolff 2021). Whether this rupture should be abrupt or gradual is a source of ongoing debate within progressive circles yet there is agreement that capitalist structures need to be replaced by alternative institutions.
In How to be an Anti-Capitalist in the 21st Century Erik Olin Wright (2021) outlined six means of moving beyond capitalism: smashing capitalism, dismantling capitalism, taming capitalism, resisting capitalism, escaping capitalism, and eroding capitalism. Wright does not see smashing capitalism as viable or possible and suggests attempts to do so have not proven – to date – emancipatory. 1 Dismantling capitalism through the electoral process has proven to be unsuccessful as most left parties have accepted the neo-liberal agenda. 2 Taming capitalism by removing its rough edges has been at times somewhat successful, but according to Wright, deals with symptoms rather than the underlying causes of our problems. 3 Resisting capitalism is carried out by social movements and organized labor but its locus outside of the state makes systematic change unlikely. 4 Escaping capitalism occurs through organized efforts such as self-sufficient communities and cooperatives or lifestyle choices to tune out of capitalist society. However, its lack of political engagement makes changing the world unlikely. 5
Eroding capitalist structures was Wright’s preferred direction and we use it to consider the potential role of credit unions in moving toward a post-capitalist future. Wright suggests developing a ‘cooperative market economy’ to provide alternative ‘non-capitalist’ institutions such as worker, producer, and consumer-owned and controlled cooperatives in the domains of housing, consumer goods, and food among others. Of particular interest for us is his suggestion of banking becoming a public utility either through nationalization of the industry or developing alternative financial institutions outside of capitalist structures such as credit unions.
Similar calls for establishing post-capitalist institutions have come from Chibber (2022), Durand (2016), Gilbert (2020), Gindin (2018), Ostrowski (2020), Jackson (2021), and McBride (2022), among others. Most suggest public ownership or enterprise with democratic governance of various domains as well as worker-controlled cooperative enterprises. 6 McBride (2022) in particular calls for the establishment of publicly controlled state-owned democratically governed sectors that would control capital and allow social investments in education, health, transport, and housing. Gindin (2018) emphasizes workplace collectives, sectoral councils, various layers of planning, and a central planning board that would undertake the transformation of the state. Beginnings must be made in this process, and we focus on growing the credit union sector as one such step.
There is a window of opportunity in Canada for such actions in the financial sector as public discontent with the power and influence of Canada’s largest banks is increasing as is recognition of their problematic business practices adversely affecting consumers as well as their supporting the fossil-fuel industry (Meyer 2024; Siekierska 2023). This discontent can be placed within a broader public concern about the harms of Canada’s capitalist economic system (Bañares 2019; Innovative Research Group 2021).
Since nationalization of the banking industry in Canada seems currently unlikely in this period of neo-liberal inspired capitalism, we explore the development of alternative financial institutions such as credit unions. 7 We build upon Block’s (2019) and Eisenschitz’s and Gough’s (2011) argument that strengthening credit unions and other alternative non-profit institutions can serve as means of transitioning toward socialism.
Credit unions are part of the larger cooperative movement – sometimes included in the even broader concept of the social economy 8 – which emerged in Europe as a reaction to early 19th-century industrialization (MacPherson 2012). Cooperative organizations are owned by and operated for the benefit of their members rather than external shareholders common to for-profit institutions. Credit unions are well established in Canada and arose due to the failure of traditional financial institutions to meet the needs of many Canadians (Pigeon 2023).
In this article, we make the case that a small first step in a transition to socialism could involve building the cooperative banking sector by enlarging the reach and influence of credit unions in Canada and making it a model for eroding capitalist institutions that currently produce and distribute financial and other resources. Many credit unions exist in Canada and enjoy public policy protections usually reserved for solely capitalist enterprises, providing a base for further expansion. Their financial services – banking, loans, mortgages, and investment opportunities – are objectively superior to profit-driven financial institutions for the average Canadian.
Background
What’s wrong with capitalism?
While a detailed exploration of the many problems associated with late-stage global capitalism in Canada and elsewhere is beyond the scope of this article, we provide a brief overview. Critiques of capitalism and its adverse effects existed prior to Marx’s and Engels’s work (Priestland 2016 [2009]). Bouglé (2024) sees the work of Francois-Noel Baheuf, Comte Henri de Saint-Simon, and Charles Fourier following on the French Revolution as providing the foundation for Marx’s and Engels’s development of communism. Newman (2020) traces the origins of socialism to values enumerated by Plato, the Bible, and the English Civil War which led Victorian-era socialists to emphasize values of community, cooperation, and association, rather than the individualism which emerged during the industrial revolution.
The most developed critique of capitalism is clearly that of Marx and Engels as elaborated in The German Ideology (Marx & Engels 1998 [1845]), the Manifesto of the Community Party (Marx & Engels 2012 [1848]), and Marx’s (1992 [1867], 1993[1885], 1993 [1894]) three volumes of Capital. The Marxist critique focuses on the inherent exploitation built into the capitalist economic system whereby workers sell their labor to the owners and managers of the means of production yet receive only a fraction of its value in wages (Holstrom 1977). Engels’s (2009 [1845]) biting analysis of capitalism’s adverse effects upon workers and their families’ health remains relevant to this day (Govender et al. 2023).
Capitalism’s overriding goals of capital accumulation or profit-making leads to growing inequalities and the alienation experienced by workers as the fruits of their labor are siphoned off to owners and managers (Das 2023). Capitalism also spawns ongoing financial crises which consistently worsen the living and working conditions of workers while benefiting those owning and controlling the corporations producing these resources (Stevano et al. 2021). Carroll’s and Sapinski’s (2018) list of financial crises since World War 1 include 1929, 1937, 1947, 1951, 1953, 1957, 1960, 1974, 1980, 1981, 1990, and 2008. Colonialist practices, past and ongoing, result from the practices of capitalist accumulation and profit-making (Issar 2021). The climate crisis is a result of capitalism’s relentless extraction of natural resources in the service of capital accumulation (Flanagan & Raphael 2023).
Singh and Tiwana (2020) note how capitalist imperatives include the need for profit maximization, where firms and capitalists prioritize increasing profits to ensure growth and survival. Capital accumulation is another key imperative, as the system requires the reinvestment of profits into productive activities or financial ventures to maintain economic expansion. In addition, capitalism relies on continuous expansion and competition, where firms must grow and compete in increasingly global markets. The role of the state is also crucial, as it facilitates these imperatives through regulation, infrastructure development, and interventions to stabilize the economy as Marxist and Keynesian economists believe that capitalism naturally goes through cycles of instability.
Many of the problems caused by capitalism were papered over during the ‘Golden Age of Capitalism’ of the 1945–1975 post-WWII era (Barker 2021). This period corresponded to what Ross and Trachte (1990) term monopoly capitalism, where advanced competitive capitalist economies transitioned into oligopolistic ones dominated by a few large corporations. This shift led to reduced competition, with a few firms gaining significant control over prices and production. As monopoly capitalism developed, the state became more involved in managing economic instability through regulation and public spending.
In Canada and elsewhere, this saw the corporate and business sector reaching accommodations with organized labor and civil society. These accommodations occurred due to recognition that unbridled capitalist practices contributed to the rise of fascism during the 1930s. As a result, the post-WWII era saw government management of the most egregious aspects of capitalist economies and the development of the modern welfare state (Teeple 2000). In addition to robust economic growth from 1945 to 1975, this golden age saw increases in Canadians’ real income across the social class spectrum.
Since the 1970s and 1980s – during the emergence of what Ross and Trachte (1990) term global capitalism – the lifting of restrictions on the flows of capital and the dispersing of manufacturing to the periphery from the industrial west associated with the neo-liberal resurgence has led to the state being forced to rollback governmental supports and services, skew tax structures in favor of corporations and the wealthy, and attack the labor movement through enactment of restrictive laws and regulations.
The result has been the growth of income and wealth inequality and deterioration of living and working conditions for many constituting a polycrisis of housing unaffordability, food insecurity, insecure employment and low wages, deteriorating benefits and services, and environmental crises (Banting & Myles 2013; McBride 2022). The polycrisis is contributing to stagnating or declining health outcomes – especially declining life expectancy and growing infant mortality rates – in liberal welfare states such as Canada, the United Kingdom, and the United States (Raphael & Bryant 2023). The polycrisis is implicated – reminiscent of Weimar-era Germany – in the rise of right-wing populist movements and threats of fascism (Rayner et al. 2020).
While these critiques have long existed in the Marxist-oriented academic and popular literature, they now are appearing in mainstream public health work. Nick Freudenberg, a prominent public health authority states: ‘Now my thinking is that the vast majority of people in the United States and the world are harmed in some very direct ways by the current ways that capitalism operates’ (Rozsa 2021). He sees the capitalist economic system’s inequitable distribution of resources adversely affecting six areas that shape health: food, education, healthcare, work, transportation, and human relations (Freudenberg 2021). China Meiville (Polychroniou 2023) states the problems with capitalism rather more directly: Every day, capitalism proves that it is absolutely indifferent to human flourishing, or life, and therefore it really shouldn’t be a surprise that so many of the grotesque and monstrous phenomena of our society – inequality, racism, misogyny, imperialism, ecological catastrophe, mass extinction, mass unnecessary death – are inextricable from capitalism.
Capitalism and societal values
We place the problems of capitalism, following Wright (2021), in three clusters of values equality/fairness, democracy/freedom, and community/solidarity, which are remarkably consistent with the values of the cooperative sector in general and credit unions in particular.
Equality/fairness
For Wright (2021): ‘In a just society, all persons would have broadly equal access to the material and social means necessary to live a flourishing life’ (p. 10). By any measure, the processes of capitalism makes the attainment of fairness in terms of life outcomes difficult for many. While the structures and processes of capitalism were managed during the period of monopoly capitalism from 1945 to 1975, under global capitalism social inequalities are increasing and day-to-day life for most is not improving. The growth of neo-liberal governance has led to growing corporate domination of the political process with the state becoming actively involved in the promotion of capital accumulation at the expense of social reproduction.
Democracy/freedom
Wright (2021) sees democracy and freedom as linked in that they support self-determination: ‘In a fully democratic society, all people should have broadly equal access to the necessary means to participate meaningfully in decisions about things that affect their lives’ (p. 15). Key components of this ability include access to power and the ability to shape public policy that affect the lives of individuals.
The structures and processes of capitalism have seen the corporate and business sector reducing the role of citizens – always in short supply – in shaping public policy and the societal processes that produce and distribute resources. As the corporate sector comes to dominate societal discourse through its control of the mainstream media and public policy through its influence upon corporate-friendly political parties, democracy is reduced to voting for one of the pro-business parties that dominate public discourse. The illusory process of freedom means little since as Coburn (2010) notes ‘capitalists preach democracy, but practice power’ (p. 68).
Community/solidarity
Wright (2021) states, Community/solidarity expresses the principle that people ought to cooperate with each other not simply because of what they personally get out of it, but also out of a real commitment to the wellbeing of others and a sense of moral obligation that it is the right thing to do. (p. 18)
This is important because the communitarian view of society provides a sense of purpose and meaning in life as well as supporting equality/fairness and democracy/freedom.
The lack of democratic processes and the growing competition for resources among the population under capitalism leads to a weakening of already very fragile concepts of community and solidarity. Neo-liberal processes – now dominant in this age of global capitalism – absolutely celebrate the fraying of ties among the population thereby reducing the sense of common purpose and weakening the public’s ability to control their future.
What’s right about socialism?
We argue that socialism as an economic system can support these values of equality/fairness, democracy/freedom, and community/solidarity. For Miliband (1994), socialism is defined by three core pillars which overlap with the values put forward by Wright: democracy, egalitarianism, and the public ownership of important parts of the economy. Democratic socialism calls for decentralized economic, political, and social structures to allow public decision-making processes (Chibber 2022; Miliband 1994; Sunkara 2022).
Socialist democracy would see citizen involvement in all major societal sectors including, but not limited, to the workplace, education, health, and housing (Baer 2017; McBride 2022). This would lead to collective ownership, social equality, and a representative and participatory democracy that would provide all people with basic resources, while simultaneously being environmentally sustainable (Baer 2017; McBride 2022). What might such a system look like and how can we get there?
Moving beyond capitalism
Marx and Engels (2012 [1848]), Meiville (2022), Chibber (2022) and Sunkara (2022) among others, identify the need for a rupture between capitalism and socialism, yet it is unclear as to whether this rupture could be sudden or gradual. McBride (2022) for example, calls for a ‘radical transformation’ whereby popular sovereignty comes to control capital; there is a rebuilding of the public domain and state and socialization of capital investment. A new regime would respect human rights and create a welfare state where meeting peoples’ needs is primary.
In contrast to the form socialism took within the communist regimes of the former Soviet Union and Eastern Europe, Baer (2017) advocates a ‘reconceptualized’ version of socialism that occurs through gradual reform. The goals of this reconceptualization would be an economy oriented toward meeting basic social needs of all, a high degree of social equality, public ownership of the means of production and distribution, a representative and participatory democracy, and environmental sustainability. This system would be what Wright (2010) terms a ‘real utopia’ – a utopia that is achievable through theorizing and experimentation.
Furthermore, the vision of democratic socialism includes the ‘eradication of health and social disparities’ through the redistribution of resources and through the development of an economy that is oriented toward ensuring basic needs such as food, clothing, shelter, health care, and other determinants of health for everyone as opposed to capital accumulation, that is, profit-making (Baer 2017). The existing capitalist system is self-destructing due to unsustainable social and environmental practices, thus, transforming current institutions and social structures has the potential to greatly reduce human harm and increase the likelihood of human equity and well-being (Löwy 2017; Wright 2013). Socialist planning would therefore be grounded within democratic and pluralist institutions where major decisions are made by people within society (Lowy 2007).
The role of the state
The state has a crucial role in facilitating capitalist development as the state has been involved in key industries in Canada and elsewhere such as finance, providing essential infrastructure and capital that enable these private sectors to thrive. Whiteside (2022) argues that even prior to the neo-liberal era – and now enhanced – the Canadian state was central in shaping capitalism through legislation, deregulation, and privatization that provided favorable conditions for capital. The state consistently facilitates capitalist expansion, making state capitalism a fundamental part of Canada’s economic history.
The possible role of the state in any transformation from capitalism to socialism is therefore a contradictory one. On one hand, its role in facilitating capitalist structures and processes requires developing alternative institutions such as credit unions outside of it (Gindin 2018). But any real transformation requires state action, hence the eventual goal of state-organized banks (McBride 2022; Pilon 2025).
As noted earlier, Wright (2021) downplays radical transformations to a post-capitalist society and argues for eroding capitalist institutions by strengthening competing ones such as credit unions, worker cooperatives, and instituting governmental structures of participatory budgeting. In this article, we focus on credit unions and the role they could play in eroding Canada’s capitalist banking system and promoting other democratically controlled institutions across a range of domains.
Credit unions in Canada
Extent and reach
At the beginning of 2024, there were 403 credit unions in Canada at 2,103 locations with 11,049,306 Canadian members representing 34% of all adult Canadians. Yet, in Canada, credit unions constitute only between 6% and 7% of deposit-taking institutions with the figures somewhat higher in Quebec, indicating room for growth. Such growth of credit unions could assist – by providing workable models – in the expansion of other non-profit sectors of the economy such as food production and distribution, housing, transportation, and telecommunications, thereby eroding capitalist structures. While credit unions are perceived by many Canadians as providing personal service that nurture and support members in small scale, community-established institutions in a manner superior to major banks, their potential for transforming profit-based finance and other capitalist structures in Canada has not been emphasized (Eisenschitz & Gough 2011; Innovation Credit Union 2022).
History
Financial cooperatives appeared in Europe in the early 19th century; first in the United Kingdom, and then Germany. The key features of these were democratic governance, one member-one vote, member-elected boards of directors, and labor donated by volunteers (Desjardins 2024a).
The first one – the Rochdale Equitable Pioneers Society, also known as the Rochdale Pioneers – was established in 1844. Twenty-eight weavers in cotton mills in Rochdale UK were unable to afford food and other goods due to low wages and poor working conditions. They pooled their resources such that working together they could access basic goods at lower prices.
In Germany, Friedrich Wilhelm Raiffeisen and Franz Hermann Schultz-Delitsch created an association in 1847 to aid the indebted rural poor by extending small loans to farmers on favorable repayment conditions. Since then, the model has grown into other sectors and inspired the growth of financial cooperatives across the world. The World Council of Credit Unions (2023) reports that there are now 82,758 credit unions in 98 nations across the globe with 403,976,049 members with $3.6 trillion dollars in assets. Its financial penetration rate is stated as 13.9%.
Desjardins and the Founding of Caisse populaire de Lévis on 6 December 1900
The first credit union in Canada was founded in Quebec in 1900 by Alphonse Desjardins who was a journalist as well as French-language stenographer for the House of Commons (Desjardins 2024a). His primary concern was making affordable loans available to working-class families. Over 14 years, he founded 149 caisses populaire (credit unions) throughout Quebec and Ontario.
Desjardins also established the first credit union in the United States and the company he founded now offers a wide range of services and represents every credit union in Quebec and many in Ontario. Desjardins (2024a) provides an extensive history of the growth of the Dejardins group credit union and the origins of the credit union movement in Canada. MacPherson (2012) gives a detailed background to the credit union movement in Canada.
Historic support by the federal government
Key landmarks
Credit unions arose in Canada in response to the deficiencies of traditional banking institutions in meeting the needs of many Canadians and communities (Clements 1965; Coady, 1939; MacPherson 1979; Matthews, 2006 [1996]; Ontario Credit Union League 1943; Rudin 1990). This was particularly the case for rural communities and lower income individuals who were unable to secure loans from traditional banks. Their democratic nature and their commitment to local community development also facilitated their growth across Canada.
While they first appeared in Canada in 1900, legal recognition came slowly with a breakthrough occurring in 1945 when the Royal Commission on Cooperatives recommended credit unions and their second-tier entities remain tax exempt as they provided important services that complemented other financial institutions. The 1953 federal Cooperative Credit Society Act recognized the right of credit unions to engage ‘in the business they were set up to do’.
However, as they gained market share, concern by established financial institutions led to a 1971 attempt by the federal government to remove credit union tax exemption. A united pan-Canadian credit union lobby in response led the federal government to compromise by giving credit unions access to the small business tax rate, at the time equal to half the general corporate rate of 50%.
In 2001 the federal government extended retail banking powers to the centrals to merge with the nine provincial centrals (outside of Quebec) into a single, federally regulated wholesale entity for credit unions to provide direct-to-consumer services. Credit unions secured an exemption from the Goods and Services Tax (GST) for transactions between centrals and their credit unions.
However, in 2012, the finance minister sent a letter to provincial counterparts in the four western provinces – each with unlimited deposit insurance – warning they should not expect federal government support if their credit unions or centrals came under stress (Pigeon 2023).
In 2013, the federal budget announced the government was phasing out preferential tax rates for credit unions to ‘level the playing field’ because the largest credit unions no longer warranted special tax treatment. In 2017, with the backing of the Department of Finance, the Office of the Superintendent of Financial Institutions attempted to limit use of terms such as bank, banker and banking to federally regulated banks. As was the case earlier, resistance led to the federal government amending the Bank Act to allow provincial credit unions use of these bank terms.
Implications
Over decades, the federal government allowed credit unions to enjoy most of the benefits of a federal bank charter – risk diversification, liquidity support, the payments system and specialized bankruptcy legislation, use of ‘bank’ terms, and access to GST tax exemption – while maintaining their local democratic control, local regulation and competitive disposition vis-à-vis the banks. Maintaining these benefits continues to be an ongoing struggle.
In summary, we see credit unions as a step toward a post-capitalist society as these non-profit financial institutions allow members to participate within decision-making that place emphasis on member needs rather than profit-making as is the case for commercial banks. Already, one third of Canadians are credit union members and the capitalist banking sector – dominated by a few players – is the subject of ongoing critique. How can these successes be built upon and serve as a model for other areas of the Canadian economy?
Credit unions as model for a post-capitalist society
Analysis of how the cooperative movement provides an alternative model to the capitalist present is for the most part limited to the academic literature (Block 2019; Eisenschitz & Gough 2011; McCarthy 2019). We believe an opportunity now exists for the credit union movement to make this case to the general public as the current polycrisis is spurring alternative visions of society.
While the credit union community offers information on how credit unions provide more favorable rates and arguably better service than the traditional financial sector, credit union membership continues to constitute only a minority of Canadians. We believe an opportunity exists to not only increase credit union membership but also promote awareness among Canadians of the limitations of capitalist practice by directing attention to how the power, influence and practices of Canada’s traditional financial sector – with focus on the big banks – threaten their well-being.
Canada and the big banks
Canada’s banking sector is highly centralized with a few big banks controlling the great proportion of capital. These chartered banks act as public corporations licensed by the federal government (Bonham 2024). Naylor (1975) shows how the rise of big business – and the big banks – resulted from close cooperation between capitalist elites and Canadian governments. Naylor comments that in 1871 it was noted by a prominent bank manager that: ‘The political power of the larger banks and of the Bankers’ Association can hardly be exaggerated. The bank acts were written by the very banks supposedly regulated by them’ (p. 74).
In 1867, the date of the founding of Canada, there were 35 such banks but due to a process of bank failures and mergers their number has been reduced to the current total of only nine of which six are the largest (Bonham 2024). Their evolution is very much consistent with Ross and Trachte’s (1990) description of the phase of monopoly capitalism. Their power and influence upon governments and public policy likely differs little from 1871 as they are tightly linked to the largest corporations constituting Canada’s capitalist economic system (see below).
The first step: exposing and opposing the big banks
Credit unions can become a greater force against capitalist institutions – thereby transforming society – by placing themselves in opposition to Canada’s large banks. Such public education can help organize and direct existing anti-capitalist sentiment necessary for social change (Raphael et al. 2022).
These six banks that dominate the banking industry are Bank of Montreal (BMO), Scotiabank, Canadian Imperial Bank of Commerce (CIBC), Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD) and the National Bank (NB). In Canada, these banks hold 93% of all banking assets (Democracy Watch 2023). Their control allows them to ‘gouge and abuse customers with excessive fees, and high interest rates (especially on credit cards)’ (Democracy Watch 2023). Their annual profits totaled $58.3 billion in 2023. In 2022, they recorded profits of $61 billion. Democracy Watch (2023) states, Four of Canada’s Big 6 Banks are listed in Fortune ’s Global 500 for 2023 (based on 2022 profits), and TD, RBC, Scotiabank and BMO were also in the top 35 most profitable financial institutions in the world in 2022 (more profitable than most other larger banks) and two banks are among the five most profitable Canadian companies in the Global 500. The federal government also continues to refuse to make the Big Banks pay their fair share of taxes. Canada’s Big Banks pay a tax rate of only 16% – lower than banks in other G7 countries. The Big Banks also exploit tax loopholes more than all other Canadian big businesses. England imposed a permanent annual excess profits tax on its banks in 2011, and Australia did the same in 2017.
Despite these banks appearing to be competitors, Carroll and Sapinski (2018) document how they largely own each other. RBC as just one example, owns 6.9% of BMO, 6.8% of Scotiabank, 6.4% of CIBC, and 7.2% of TD. ‘This offers them effective immunity from possible hostile takeovers, and through their cross-ownership, binds them into a common role that Karl Marx once called ‘general manager’ of financial capital’ (Carroll & Sapinski 2018, p. 76). These banks have links with all major Canadians corporations and with neo-liberal and conservative think tanks – detailed below – thereby shaping civil society and public opinion ensuring these are consistent with capitalist practice and values. Against this backdrop of the power and influence of these banks, we provide four reasons for working to weaken their power and influence through the growth of credit unions. This goal is also applicable to addressing problems associated with other profit-driven institutions in the areas of food production and distribution, telecommunications, transportation, and housing.
Big Banks Support Capital Accumulation instead of Citizen and Community Well-being
Everything about how big banks operate represents the problems of late-stage global capitalism. Rather than creating and equitably distributing wealth, the billions of dollars in profits these banks generate are siphoned off to company shareholders, most of whom are already wealthy. Their profit-driven motives lead them to inflate lending rates and interest on credit cards. In their worst form these banks have been implicated in various schemes to foist unnecessary services upon their clients: ‘We were pitched everything from pricey credit cards to lines of credit, given poor advice about debt and misinformation about mutual funds’ (Johnson et al. 2024).
Even the capitalist-friendly magazine Corporate Knights (2024a) has written a lengthy expose entitled: ‘How the Big Five banks are quietly squeezing billions out of Canadians’. These concerns about unethical business practices toward customers are long standing with little evidence of political parties intending to do anything about them. The CBC reported in 2017 ‘“We are all doing it”: Employees at Canada’s 5 big banks speak out about pressure to dupe customers’ (Johnson 2017). Seven years later, the CBC reports ‘Hidden cameras capture bank employees misleading customers, pushing products that help sales targets’ (Johnson et al. 2024).
2. Big Banks are Part of Ruling Class Politics
‘Ruling Class refers to the group of individuals or entities that hold significant power and control over a society’s political, economic, and social institutions’ (McKee & Bransford 2024). In capitalist nations such as Canada, the members of the ruling class are the owners and managers of the means of production and distribution of financial and material resources, that is, corporations. In capitalist nations, ruling class politics – support of the ruling class through government legislation and regulations – assures that corporate needs of capital accumulation and profit making are achieved at the same time these structures and processes are legitimized, that is, accepted by the population, through control of ideas achieved through messaging about the nature of society. Increasingly, these goals of capital accumulation are met through increasing privatization of the public sphere, retrenchment of the welfare state, and attacks upon the labor movement, all of which threaten the economic and social security of Canadians.
These big banks carry out these processes through their links with other corporate entities in manufacturing, the fossil-fuel industry, telecommunication, transportation, housing, and food production and distribution, among others, their control of the political agenda, and their ownership of the mainstream media. Their influence upon educational institutions through dominance of their boards of governors and fundings assure their image of society remains prominent. Figure 1 shows the big banks’ embeddedness in Canada’s capitalist order by mapping the web of relations through interlocking boards of directors (Carroll & Sapinski 2018).
Interlocks among seven large Canadian financial institutions and other large corporations.
As one particularly important illustration of the adverse influence of these connections, RBC’s leadership – like other banks – interlocks with eight Canadian fossil-fuel companies. Five of RBC’s directors and top executives sit on these companies’ boards. These companies are in essence enablers of fossil capital, the consequences of which threaten the future of the planet. Indeed, Corporate Knights (2024b) headlines ‘Canada’s Big Five banks keep moving further away from net-zero’ states, In fact, Canadian banks’ fossil fuel exposure dwarfs that of their U.S. and European counterparts. The Canadian bank tally of 16.9% fossil fuel exposure compares with 6.1% at the top five U.S. banks and 8.7% at the five largest European banks. On an individual basis, CIBC had the largest exposure to fossil fuels at 23%, followed by TD bank at 19%, Scotiabank at 18%, RBC at 15% and BMO at 14%. RBC had the largest dollar value of fossil fuel financing of the Big Five with U.S.$72.4 billion in fossil lending and underwriting out of total financing activity of U.S.$499 billion.
3. Big Banks are Members of the Business Council of Canada (BCC) which Promotes Capitalist Public Policy and Practices
The CEOs of the big banks are all members of the Business Council of Canada (BCC). The BCC has been identified as one of the strongest forces responsible for the adoption of neo-liberal public policies associated with the retrenchment of the welfare state in Canada (Langille 2025). It describes itself: ‘The Council is composed of the chief executives and entrepreneurs of over 170 leading Canadian companies, operating in every sector and region of the country’ (Business Council of Canada 2025).
Langille (2025) cites BCC’s key role in facilitating world trade and investment pacts that undermined the sovereignty of the Canadian state. The result has been a downward harmonization that led to Canadian governments offering fewer services to their citizens to sustain business confidence. The BCC achieves these aims not by lobbying to boost the profits of a particular company or sector, but by creating a favorable public policy climate that privileges private, for-profit activity (D’Aquino 2023). The BCC is aided by a network of research institutes such as the CD. Howe and the Fraser Institutes. ‘Together, these corporate think-tanks organize conferences, seminars, retreats, and briefings on major public policy concerns to which they invite politicians, journalists, academics and students, and other community leaders or elites’ (Langille 2025: 493). Figure 2 documents these relationships by mapping their interlocking directorships.
Interlocks between the BCC, the largest Canadian corporations, and Civil Society Organizations.
4. Big Banks use their Power and Influence to Degrade Potential Post-Capitalist Discourse
In addition to the linkages among right-wing think tanks, the mainstream media relies also solely on spokespersons from these institutions when a range of areas are discussed such as transportation, communications, energy, food production and distribution, taxation, and housing. This limits seeing the solutions to numerous problems as being within the purview of the private versus the public sector. The fundamental problems with the economic system of capitalism and how it has created these problems is never breached by these spokespeople.
As a result, public policy is limited to means by which the private sector can be called upon to address these issues thereby driving privatization of the public sphere. Public-private partnerships – a profoundly ineffective way to solve problems while generating massive profits for the ‘private’ component of these partnerships – is one such outcome of the pro-business political discourse encouraged by the banking complex and its allied corporate institutions.
Finally, the very high number of advertisements by the big banks of how they – and associated corporate entities – meet the needs of Canadians also shuts out alternative discourses of societal well-being. In 2022, these amounts were spent on marketing by these banks: TD Bank, $1,355,000,000; RBC, $667,000,000; Scotiabank: $480,000,000; CIBC, $334,000,000 and BMO, $278,000,000 (Statista 2024). The National Bank spent $168,000,000 on advertising and business development in 2023 (National Bank of Canada 2024).
The second step: growing credit unions in Canada
The second step is growing the credit union sector. Credit unions are similar to commercial banks in that they accept deposits, make loans, direct investments, and offer shares (McKillop & Wilson 2011). They differ by being non-profit and organized as cooperatives, where each member has the democratic ability to vote for its leadership (Block 2019). Their activities are geared toward meeting the economic and social goals of their members and local communities rather than generating profit for external shareholders (McKillop & Wilson 2011). Since credit union policies are determined by unpaid volunteers elected by the membership through a ‘one-member, one-vote’ basis regardless of the amount one has placed within the credit union, credit union processes favor equity and fairness (McKillop & Wilson 2011). Credit unions adhere to the Rochdale Principles (Box 1) first articulated in 1844 by the UK Rochdale Society of Equitable Pioneers (Axworthy 1977).
Rochdale principles.
Source: Synergy Credit Union (2024).
Since credit unions do not have the same pressure as commercialized banks to satisfy shareholders’ profit expectations, they exist ‘to attain the economic and social goals of the people who comprise their membership’ (McKillop & Wilson 2011). Credit unions distribute the surplus monies generated from business activities to its members. Essentially, commercial banks aim to maximize profits and prioritize the welfare of their stockholders while credit unions serve their members.
The promotion and use of credit unions could influence a large-scale shift to having these deposits invested in more locally based institutions (Block 2019). Table 1 shows the number and percentage of adults belonging to a credit union in the different provinces.
Number and percentage of adults belonging to a credit union by province.
The third step: messaging the society-changing potential of credit unions
The arguments we provide of credit unions serving as means of eroding capitalism are rarely mentioned and this is especially the case in credit union messaging to existing and prospective clients. The CCUA does explicate the value of credit unions being non-profit and an alternative to business as usual, but this is rarely done by the credit unions directly to their clients (Box 2).
Credit unions are owned by the people who bank with them.
Source: Canada’s Credit Unions (2022).
Local credit union messaging does play up credit unions being friendlier and more accessible with a consumer and community-based orientation. The messaging implies that credit unions are more trustworthy than commercial banks, a view that takes advantage of recent scandals involving the big banks in Canada (Boxes 3 and 4).
Public messaging I.
Public messaging II.
The fourth step: raising the ability of credit unions to erode capitalism
The fourth step is showing how credit unions can pave the way for alternative financial institutions in the transition to socialism. Pavlovskaya et al. (2020) argue – without using the word socialism – credit unions can contribute to a solidarity economy that actively resist what they call ‘collective resistance to marginalization by racial capitalism’ in the USA (p. 1278) by ‘(1) providing financial inclusion in poor and minority neighborhoods; (2) scaling up solidarity finance through participation of middle classes; and (3) diverting assets from capitalist investment into social reproduction and livelihoods’ (p. 1278). Indeed, they argue, As more people and governments join assets to achieve shared social goals, the power of capitalist finance would be drastically reduced while ever greater financial resources would be collectivized and mobilized for social purposes and sustainable development – all while the use of these resources would be accountable to democratic governance. (p. 1296)
Eisenschitz and Gough (2011) argue that in addition, credit unions can also serve as working models for a better society.
The most developed analysis of how credit unions and other non-financial institutions can erode capitalism and facilitate movement toward a post-capitalist socialist society is provided by (Block 2019; Block & Hockett 2022). Block argues for a radical reform to take place that would expand a variety of non-profit financial institutions including credit unions. His goal is to build up a network to improve the allocation of credit focused on human welfare. It may even facilitate a gradual transition to democratic socialism (Block 2019, p 530).
While the full scope of Block’s argument is beyond the scope of this article, he states that such an effort could extend democratic decision-making into the economy by improving the availability of credit to poor and working-class people and increase democratic input into financial investments. He also provides examples of such efforts such as USA mutual banks in the pre–New Deal period, cooperative banks in Germany, and locally based financial institutions supporting the social economy in Quebec.
Block (2019) calls for millions of citizens to come to change how they invest their savings. Currently, around 92 million people are members of credit unions in the United States, with these institutions holding about 10% of consumer deposits; figures comparable to Canada’s credit union membership of 11 million and Canadian credit unions holding 7.3% of consumer deposits (CD Howe Institute 2022). With such a strong initial base, it is feasible that more people would transfer their savings from big commercial banks to credit unions once a broad effort to revitalize the credit union sector became visible.
Eisenschitz and Gough (2011) call for the social economy to move in a socialist direction through four sets of activities, all of which appear to us to be possible for credit unions: (1) linking with other project such as ‘initiatives in housing, the environment, transport, child care, job creation, and credit and so on not to only support each other, but also pose new demands on each other’ (p. 11); (2) ‘developing new types of services with cooperative relations between workers and clients and demand these be funded by the state’ (p. 11); (3) ‘demand legislative and regulatory support from the state, for example through fiscal incentives that encourage purchasing from the sector instead of from capitalist forms’ (p. 12); and (4) ‘workers in social enterprises should be unionized, linking to campaigns for unions to accept the unemployed as members’ (p. 12).
Unfortunately, there is very little to be found in the political platforms of any of the major Canadian political parties on the role that credit unions can play in promoting a more democratic and responsive economy. In Nova Scotia, the New Democratic Party has called for credit unions to be allowed to provide microcredit loans that would lower interest rates for people in financial need and manage predatory corporations making money off those experiencing misfortune (Nova Scotia NDP 2022).
The Federal NDP’s Policy Book from 2021 calls for ‘Improving protection and support for credit unions, cooperatives and mutual companies’ (NDP 2021) while the Green Party of Ontario (2025) would exempt credit unions, caisses populaires and co-ops from a 0.5% financial transactions tax in the finance sector. Liberal Party and Conservative Party statements do not mention credit unions.
In summary, 34% of adult Canadians belong to a credit union. Attempts can be made to increase membership, thereby increasing the profile of non-profit financial services and their benefits to the average Canadian. As Canadians become familiar with alternative financial services, they may become more open to considering similar institutions carrying out other important societal functions. Credit unions can allocate funds to carry out such public education to increase its membership. Block (2019; Block & Hockett 2022) describes the most critical step of this process as ultimately mass public rejection of the conventional role of financial institutions in market economics.
Opportunities
The present situation of polycrisis and bad publicity for the major banks presents possibilities of highlighting how the values of the cooperative movement – of which credit unions are embedded – share common ground with socialism thereby linking these two movements: The cooperative movement and socialism are distinct from each other, but they are close cousins. Socialism demands a whole-scale transformation of society’s productive forces, and to immediately end Capitalism. Cooperatives are a little different – they seek to do the best they can democratically within whatever economic system is present. So, cooperatives aren’t necessarily socialist, but they share a common root and are, in some cases, fully compatible with a Socialist society. (Dodson 2018)
The Canadian documentary A Silent Transformation (Nicoll 2024; Powerline Films 2017) outlines how cooperatives can transform society. Involving a variety of cooperative enterprises, including a credit union, its goals were stated as follows:
The primary task of A Silent Transformation was to explore the co-operative enterprise model and its transformative potential. But its deeper significance is in its attempt to sketch out, through process and narrative, the contours of a possible transition away from Capitalism to a system of economic democracy.
Expanding membership
Despite Credit union membership continuing to increase, credit unions remain considerably smaller than other financial institutions. In the United States, from 2002 to 2017, the median federally chartered credit union had only 2,300 members and $11.5 million in total assets. In comparison, in 2017, the median bank asset size was $210 million.
In Canada, the situation is somewhat better. The credit union sector is more concentrated. One hundred and forty-six credit unions represent 96% of all members’ assets in this sector (Leshchyshen 2020). The CCUA (2024) reports the credit union sector (excluding the Desjardins Group) reported assets of $312.3 billion at second quarter 2024, a gain of $11.3 billion, or 3.8% over the previous year. Deposits now total $262.3 billion, a yearly increase of $7.5 billion or 2.9%.
The Desjardin Credit Unions and Caisses Populaires reported assets of $371.4 billion, such that total assets of all credit unions in Canada was $683.7 billion. Membership in CCUA credit unions was 6,148,484 and Desdjardin unions was 5,125,577 for a total of 11,274,061.
Increasing advocacy
To date, credit union advocacy has been limited to promoting their services and strengthening the credit union sector. Considering the mission of credit unions to improve the finances and quality of life of average Canadians, it does not seem unreasonable to suggest that the credit union sector should take broader advocacy positions. The financial for-profit sector has little hesitation in advocating public policy that arguably threatens the health and well-being of many Canadians.
All the major chartered banks are members of the Canadian Business Council whose reputation for advocacy is well established. Unfortunately, the advocacy positions taken by these business associations are usually focused on reducing corporate taxes and taxes on the wealthy, reducing spending on programs and services, and supporting industries, such as the fossil-fuel industry, that threaten Canadians’ health and well-being. We see no reason that the credit union sector should not be taking advocacy positions that oppose these health and well-being threatening public policies. This would be consistent with Ostrowski’s (2020) call for a united left coalition to fight against the most egregious aspects of neo-liberal inspired governmental practice.
To date the credit union sector has not engaged in such activities and the viability of such a direction should at least be considered. This might be a new role that might provide difficulties for their citizen-based volunteer boards. But it also could provide opportunities for socially conscious board members to increase their influence on social issues which credit unions have traditionally been concerned with.
This would be a new role for credit unions and one whose political repercussions would need to be considered. The possibility of governing authorities pushback might occur and credit unions would need to mobilize public support for these advocacy activities. These objections could be countered by noting how the commercial banks are able to carry out such activities through their membership in the Canadian Business Council.
Providing a model for other components of the economy
We see the structure and processes of credit unions as providing a model for other important sectors of the society. These would include energy (Carroll 2021), food distribution (Mendly-Zambo and Raphael 2025a), housing (Schwerdtner 2021; The Week 2019), telecommunications (Barry-Shaw 2021) and transportation (Vickerman 2021). Those already working on these issues can point to the credit union model as means of bringing under popular control these important societal sectors. The next section provides details in regard to one of these sectors, food production and distribution.
Food distribution and production
Another striking example of a domain that needs to come under public control is that of food production and distribution. Mendly-Zambo (2025) documents how the corporate sector through large transnational firms dominates all aspects of the food system including inputs, retail and commodity trading. In Canada, a staggering 80% of the Canadian retail grocery market is under the control of five companies: Loblaws (29%), Sobeys/ Safeway (21%), Costco (11%), Metro (10.8%), and Walmart (7.5%).
These companies are profoundly profitable with sales in 2022 for Loblaws, Sobeys, and Metro of $100 billion with $3.6 billion in profit. As is the case with Canada’s major banks, these companies are focused on profit-making rather than the public good, presenting a significant barrier to the development of an equitable and sustainable food system devoted to achieving food security.
Like the situation where Canada’s largest banks were accused of foisting upon clients unnecessary services, these companies have also been accused of problematic practices. A price fixing scheme occurred between seven companies that lasted over 14 years (Evans 2023). Sobeys/ Empire, Metro, as well as Walmart Canada Corp, Giant Tiger, and Canada Bread were found to have colluded to increase the price of bagged bread products 15 times over these 14 years. The Weston Bakeries and Canada Bread control nearly 80% of the bread- making which facilitated market manipulation. As noted by Mendly-Zambo (2025), In June of 2023, Canada Bread was fined $50 million CAD for price fixing by the Canadian Competition Bureau while Loblaws was granted immunity from prosecution in exchange for providing industry information on the scheme. Recently, these same companies, particularly Loblaws, Empire Company (owners of Sobeys), and Metro Company have been accused of price gouging and profiteering – increasing their food prices well above cost using the current increase in inflation as a cover. Heads of these companies, unsurprisingly, refute these claims. (p. 55)
Not surprisingly, there have been attempts to develop alternative food production and distribution processes to the dominant supermarket chains (Mendly-Zambo and Raphael 2025b). In terms of food distribution, these have been small-scale usually involving neighborhood farmers markets. The small Florida town of Baldwin opened a local grocery store with similar examples in Kansas. In Spain, the left-wing party Podemos, which is part of the Socialist government coalition, proposes publicly- owned supermarkets to control prices. All these efforts would remove profit from food distribution.
Removing profit-making from food production would be more complicated. There are numerous examples of cooperatives in food production. One good example is Gay Lea in Canada with members from 1,300 dairy farms across Ontario and Manitoba (Gay Lea 2025). Only farm producers can be members and buy shares in the company. The company operates under democratic control and profit sharing is only available to co-op members, not external shareholders.
Berge and Khawaja (2016) provide an overview of food cooperatives in Canada and Mendly-Zambo and Raphael (2025b) provide further details of how the socialization of food production and distribution would serve to achieve food sovereignty whereby the public would come to achieve control over food production and distribution thereby achieving sustainability, social justice, and food security for all. In Canada, one such form this might take is establishment of a Crown corporation to facilitate food production and distribution outside of the established food production and distribution chains. As noted by Clark (2021), in relation to food distribution and Huber (2020), in relation to food production, respectively: The capitalist market can’t solve the crisis that is coming for our food system. Urgent problems about how we’re going to feed everyone in a warming world can’t be left in the hands of private interests . . . A supermarket managed in the interests of workers and the public could improve our lives, strengthen our food security, and revitalize local industries. (Clark 2021) What would food-system democracy look like? Sam Gindin argues for a socialist middle ground between local worker control and higher-level and democratic state planning. He proposes we could create ‘sectoral councils’ for specific and socially important sectors like food and agriculture. These councils would ideally represent both communities in need of food provision and the workers involved in agricultural production. (Huber 2020)
Conclusion
While credit unions offer tangible benefits as compared to for-profit financial institutions, their membership is still a minority – though significant – at 34% of the Canadian adult population. The situation illustrates many of the opportunities as well as barriers to eroding capitalist institutions in favor of alternative ones. Opportunities include credit unions (a) being well regarded; (b) having significant memberships, and (c) providing a model of democratic non-profit governance that can appeal to many Canadians. Barriers however include (a) corporate dominance of existing institutions; (b) corporate influence with policymakers and governing authorities; (c) massive advertising budgets of the Big Banks that control messaging to the public; and (d) fears by the public around the viability and security of non-traditional companies and businesses.
Box 5 provides concrete steps that can be taken to increase the membership and influence of credit unions in Canada. Steps can be taken at the political, institutional, and individual levels. The extent to which these steps can produce results and overcome existing barriers remains uncertain. They do however provide a concrete direction for those wishing to build an alternative to current profit-driven capitalist societies. This opportunity cannot be ignored.
Steps to increase membership and influence of the credit union sector.
Finally, Hossein (2023) makes the argument that the world economy can be conceived as an iceberg where the surface part is the formal capitalist economy (Figure 3). She makes the argument – perhaps naively underestimating the power of that tip – that the largest submerged part is the cooperative non-profit-oriented living economy to which we all belong. The extent and variety of the submerged part suggests that Canada’s population would not be averse to increased cooperative messaging in general, credit union messaging in particular, and maybe even post-capitalist socialist messaging as well.
Diverse economies iceberg.
Footnotes
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: Erin Flanagan received a small grant ($1,000) from research funding provided by York University to Dennis Raphael.
