Skip to main content
trading shots

The Ontario Federation of Labour President Sid Ryan speaks to members of the Canadian Union for Public Employees (CUPE), representing flight attendants from Air Canada, as they protest labour disputes at the Toronto Pearson International Airport in Toronto, September 20, 2011.REUTERS/Mark Blinch

"Workers should pull their savings, RRSPs and mortgages from RBC. Boycott the greedy banksters," tweets Sid Ryan, president of the Ontario Federation of Labour. Mr. Ryan was offering his response to the recent allegations of the Royal Bank of Canada's role in the outsourcing of Canadian jobs.

Mr. Ryan isn't the only voice calling for a boycott of RBC. Even after Royal Bank of Canada CEO Gord Nixon issued an open letter apologizing, social media is atwitter with such calls as the "Boycott Royal Bank of Canada" Facebook page with 7,500 likes. How much does RBC care if 7,500 people close their chequing accounts? When it comes right down to it, they won't make a difference to the RBC bottom line. Sure there is money to be made from bank accounts and mortgages, but what the banks really care about is "share of wallet" from their largest clients. That's where the real money is.

The potential hammer the unions and the other social activists wield isn't boycott but divestment, the sale of their RBC stock. Mr. Ryan knows about divestment and has advocated it in other contexts. But would he and his members really be prepared to take that step when it affects their own pocketbook? If the more than one million union members Mr. Ryan represents asked their pension managers not to include RBC in their portfolios, that would bite.

Many pension funds have ethical restrictions. Some won't allow alcohol and tobacco holdings. Others have environmental restrictions. But few funds, even those run for unions, have labour practice clauses. Even the Social Investment Organization, the association for socially responsible investment, includes environmental, social and governance factors in the selection and management of investments, but not labour practices. In fact, banks, and particularly RBC, are at the top of the lists for ethically-friendly investments.

The five largest shareholders of RBC stock are the five big banks:


Holder name

Amount held

per cent


Royal Bank of Canada




CIBC World Markets Inc.




BMO Financial Corp.




Toronto Dominion Bank




The Bank Of Nova Scotia




TD Asset Management Inc.



Even in this chart, the percentages the banks hold is understated because a bank's asset management division and its parent are broken out separately. TD Bank is shown as owning 4.08 per cent of RBC while TD Asset Management owns 2.96 per cent.

Much of the bank holdings are through pension plans, and unions still maintain many of the biggest pension plans in Canada. Because of pension plans and managed money, most investors in Canada, whether they realize it or not, are invested in RBC. It is one of the most widely held stocks in Canada.

The other power that concerned investors could have, if they don't divest, is on governance. This is annual meeting and reporting season and investors can use their influence to affect CEO and board decisions. But you tend not to see the unions in Canada at these annual meetings using their share-holding clout to try to bring about social change. Social change often affects stock prices positively.

The five large Canadian banks all maintain Codes of Ethics, often referred to internally as "CYA" documents. The rationale often cited for maintaining and enforcing a Code of Ethics is to minimize reputational risk. Reputation can also affect stock prices.

RBC is a good investment because it constantly throws off a handsome dividend, and even when its reputations are at risk, it seems to thrive. But one cannot help but wonder if the banks, or certain banks, would be an even better investment if they were also seen to be good corporate citizens.

READERS: Should union pensions dump RBC and other bank stocks over their labour practices, or is it smarter to use their influence at the board level?

Report an error

Editorial code of conduct