Systemic Discrimination in Canada’s Financial Sector

Discrimination That Operates Through Everyday Systems

Across Canada, individuals and organizations are losing access to essential banking services — not because of criminal activity or legal risk, but because of who they are, where they come from, or who they’re connected to. Derisking is more than a regulatory tactic. When applied without transparency or accountability, it becomes a tool of systemic discrimination. COODA is committed to exposing these patterns, documenting the impact, and demanding change.

Discrimination That Operates Through Everyday Systems

Systemic discrimination occurs when policies, procedures, or institutional norms lead to unequal treatment — whether or not there is explicit prejudice. In the financial world, this often manifests through the disproportionate targeting of Muslim individuals, immigrant families, or racialized charities in the name of "compliance" or "risk prevention." These decisions are rarely made by a single person. Instead, they result from layers of unchecked bias in data, decision-making, and institutional culture.

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How It Shows Up

Five Signs of Financial Discrimination

Muslim Charities Shut Down Without Due Process

Many Muslim-led humanitarian organizations have faced sudden account closures or investigations without clear explanations. These charities are often subjected to audits, surveillance, and suspicion simply because of their international connections or community focus.

Ethnic and Name-Based Profiling

Individuals with Arabic, South Asian, or African names are disproportionately flagged by internal banking systems. These profiles — shaped by risk algorithms and global watchlists — perpetuate stereotypes and exclude people based on identity rather than behavior.

“High-Risk” Labels with No Accountability

The label “high-risk” is often assigned to entire communities, professions, or regions. But who decides what is risky? In many cases, these determinations are made without transparency — and there’s no opportunity to challenge or clarify the decision.

Families and Students Caught in the Crossfire

A mother sending funds abroad, a student receiving tuition, a family helping relatives in crisis — all can face transaction blocks, account freezes, or de-banking. These are not exceptions. They are common, and they are unjust.

Fear and Silence

Affected communities often remain silent. Some fear reputational damage. Others fear further targeting. This silence protects institutions, not people — and it hides the scale of the problem.

Disproportionate Scrutiny of Muslim-Owned Businesses

Many Muslim-run businesses — like travel agencies and money services — face excessive checks and banking restrictions. Despite operating legally, they are often denied services based on their identity, leading to financial exclusion and disrupted livelihoods.

What the Numbers Show

Though little formal data is publicly disclosed, available research and case documentation show a consistent trend: Muslim, Black, Indigenous, and immigrant-led organizations are disproportionately impacted by derisking and financial exclusion.

Nearly

of Canadian Muslim charities report heightened scrutiny compared to non-Muslim charities.

Over

of affected individuals never receive a formal reason for account closure.

Less than

of de-risking cases result in formal appeals or successful reinstatement.

Nearly

of those who experienced derisking say it damaged their trust in Canadian financial institutions.