The price is wrong

>> TD-Canada Trust merger has students crying all the way to the bank

by Catherine Thompson and Dennis Mitchell

A teddy bear on five-year-old Sean Farrell's new statement book was his first image of the Toronto Dominion Bank. Now 21, Farrell is a life-long TD banker and a Concordia University political science student. But he has a different impression of his bank these days.

Along with thousands of other TD student customers, he was advised by mail recently that his account plan will be more expensive and offer fewer services beginning March 1. "I came home from school and saw the letter from TD bank. Normally I avoid opening them, but this one looked different," says Farrell. "And I remember reading through the thing going, 'Damn, damn, damn, damn,' as all my prices went up."

The changes are the result of TD's merger with Canada Trust. According to TD executives, the student plan was one of the few affected negatively by the merger. The plan will rise from $2.50 to $3.45 a month--a fee that's waived for those who have a balance over $1,500. Previously unlimited Interac and bank-machine withdrawals are reduced to 20 per month. "It was like, 'Can they push me down any more?'" remarks Farrell. "It's not like I have a lot of room to breathe here."

TD bought Canada Trust in Feb. 2000 from Imperial Tobacco. The deal was struck out of another takeover scenario. Earlier that year, the British American Tobacco Company bought the Montreal-based cigarette maker on one condition--that it sell off part of its assets. That part was Canada Trust.

Finance Minister Paul Martin approved the merger after the Competition Bureau reported it would not threaten reasonable banking prices for Canadians. "The overwhelming majority of TD bank customers will pay the same or pay less," says Tom Dyck, vice-president of TD Core Banking Services.

Dyck sat on the team responsible for restructuring 30 account types, including the student plan. "Of course, there are folks who will pay more, in the case of students," says Dyck. He suggests students can benefit by keeping their bank balances up and lowering their transaction levels.

This advice doesn't sit well with student activist and Concordia Student Union president Rob Green. "The provision that you must have $1,500 in your bank account is absolutely absurd," declares Green. "I would challenge those bank executives to find me a student who's got that in their bank account--it doesn't exist. Eighty per cent of students are living below the poverty line.

"To be doing this in the context of record profits, the bank is essentially telling them to go to hell," says Green. TD had record results for the first quarter of 2001, reporting a net income of $569-million compared to $458-million last year.

Says Dyck: "We didn't have the luxury of picking one account from one lineup and one account from the other lineup and mixing the two together. We chose the Canada Trust account lineup completely."

Green has a different perspective. "I think critics of these mergers said that this is exactly the sort of thing that would happen. This is a continuation of what I see as a war on the poor that's being waged by the banks and large corporations."