The House of Commons Standing Committee on Finance has recommended that Members of Parliament reject RBC’s proposed acquisition of HSBC Canada.

In a statement, Committee Chair Peter Fonseca said the Canadian financial sector already has few players and removing further competition could “raise banking fees for Canadians who already pay more for financial services due to an already uncompetitive financial sector.”

In a statement, a spokesperson for RBC wrote its merger “offers HSBC’s Canadian clients the best possibility for continuity and stability.”

“This proposed acquisition will also keep more well-paying financial sector jobs in Canada and will repatriate overseas roles that currently support HSBC’s Canadian operations,” the statement continued.

The bank also noted Canadians would still have more than 50 banks and hundreds of fintech firms and credit unions for their banking needs if the deal goes through.

In November 2022, RBC announced its intention to buy HSBC’s Canadian business for $13.5 billion, with the goal of closing the deal by the end of 2023.

On Sept. 1, Canada’s Competition Bureau said the deal could go through and was unlikely to hurt banking competition in Canada, but would result in “a loss of rivalry between Canada’s largest and seventh largest banks.” 

Finance Minister Chrystia Freeland must now give the final approval for the deal.

Conservative Leader Pierre Poilievre has called on Freeland to block the deal, telling BNN Bloomberg last month that “we need competition in banking.”

“We have a problem where very old, very large, government-protected oligopolies have little competition and therefore little entrepreneurial incentive to become more productive and more enterprising,” he said in the television interview. “One of the only ways to change that is to engender more competition in the marketplace.”

With files from BNN Bloomberg’s Holly McKenzie-Sutter