Finance Committee on June 7th, 2017

[Sally Watson]

Absolutely. People literally dread getting up in the morning because of the horrible things they know they're going to have to do when they get to work. They're going to have to sell somebody a mortgage they can't afford. They're going to have to let somebody buy a more expensive car than they can afford.

[Robert-Falcon Ouellette, Liberal, Winnipeg Centre, MB]

Does that create managers who might not see a problem because they succeeded using that system?

[Sally Watson]

The managers don't see a problem, because there's this big thing that goes on in the bank. It's called the annual campaign. It's a campaign where each branch, usually in the springtime, has a three-month period in which to sell the maximum number of products. It's like a competition. The winning branch gets its name published in the Scotiabanker quarterly magazine, and the winning manager gets to go on a trip to the tropics somewhere. He started off the campaign by coming out and saying, “Ladies, send me south.” That means sell as much as you can so he gets to go south.

[The Chair, Liberal, Wayne Easter]

Mr. Buell, do you have anything to say on this point?

[Stan Buell]

The problem I see is this sales culture is not what employees expect when they go to the bank. They feel they're providing a bank service that is good for clients, and I think most Canadians do trust the banks and financial institutions. However, the requirements of the positions have changed so it's more of a retail sales outlet.

I've not talked to a lot of bank employees, but I have talked to a lot of financial advisers, who would turn to me as a father confessor almost, because they were explaining how they had taken advantage of 75-year-old widows. They would list all the bad things they had done, but I have no record of that, just telephone conversations.

What I do know from talking to hundreds of people is that a culture exists where people are driven to create sales. They're paid on commission, so they do things to generate income because they have to feed their families. They're forced to do this, but it's against their human nature. That is what is happening with the tellers.

I have heard of people who have joined the bank and have been pushed to do things. For example, one young fellow suggested to his client that the client get a line of credit to pay off his credit card debt to get control over his finances. The next day he was called in by the manager and told he shouldn't do that because the bank made more money from credit cards than they did on lines of credit. This young man left the job and went to work at another organization.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Buell.

I'm turning to Mr. Deltell.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you, Mr. Chair.

Madame et messieurs, welcome to your House of Commons.

Madam Watson, I read your statement and I listened to what you had to say, and to tell you the truth, I'm very touched by your experience. You recall how it was 40 years ago when you started your career. You talked about your personal experience.

Do you know if the other financial institutions work the same way for the employees in Hamilton or elsewhere?

[Sally Watson]

Yes, absolutely, they're all the same.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Do you chat with other people?

[Sally Watson]

Absolutely, yes. I chatted with people in the other financial institutions all the time, especially after I went to the Ontario centralized accounting unit where I had to have a lot of dialogue with a lot of branches of the different banks because of the nature of the transactions I was doing. You chat about how things are in your office. It was pretty much the same story.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Is it right to say that at that time it was the culture of the financial institution instead of what happened in one particular bank or some...?

[Sally Watson]

It was an overall culture because this campaign that I was talking about was global. It wasn't just the Canadian branches of Scotiabank; it was all of them all over the world. They all had to go through this selling campaign every year in the spring. It was an incredibly stressful time. Every Monday morning, we'd start with a sales meeting to pump us up to sell stuff. Every day, the manager would tell us to send him south. He wanted to win that prize for his branch getting the most sales.

It didn't matter what you sold: investment products, credit products, accounts, anything. It became incredibly difficult, especially for somebody who.... I live in a small town. I know all these people. These people are all my friends and my neighbours and my family. They want you to ask your family to open new accounts. They want you to sell products to your family. It's incredibly demoralizing and embarrassing.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Especially because, as you said, you were a teller 40 years ago, at a time when there were no ATMs or things like that.

[Sally Watson]

That's right.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

People went to their bank every week, usually on Thursday evening, to cash cheques, get money, and go to the grocery store after that. So you knew everything about everybody.

[Sally Watson]

No teller expects, or they didn't at the time I was hired, to be a professional salesperson. They just don't expect to have to do that. It becomes kind of a culture shock. You start off as a teller doing a teller's job, and then gradually you start to become a salesperson. Then you have sales goals.

After I moved into the back office area, where I didn't have any direct customer contact, I no longer had sales goals. I had referral goals. This meant that I had to refer customers, and ideas I had for sales, to the front-line sales staff.

So I still had goals. They were different, but I still had to put up with these incredible goals. It was absolutely impossible—impossible—to do them in an eight-hour day.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

As you said in your testimony and in the document you tabled for us, especially when you talked about housing and having to borrow money, it was tough. Sometimes you had to hard-sell people when you knew they wouldn't be able to afford that amount of borrowing.

[Sally Watson]

Well, it's funny, because I used to talk to my husband about that. When we went to get our mortgage, he was absolutely stunned at the amount they were willing to lend us. He asked me, “Is that right?” I said, “No. No, we cannot afford that. That's what they want us to borrow, but no, we can't afford to borrow that.”

Of course, that was 1999. I told him at the time that the house of cards was going to fall down, and that's exactly what happened.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

I'll now go to my main question, namely, that was true 30 or 40 years ago, but to your knowledge, is it the same situation today?

[Sally Watson]

Today it is far worse than it was back then.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Far worse?

[Sally Watson]

It is far, far worse than it was back then.

We have a little street festival in my hometown of Dundas. I was at the street festival on Saturday. I happened to meet an old banking colleague. She worked in the bank when I first started, in the same branch, and she still works for the bank. I told her where I was coming today, and she said, “Oh, Sally, however bad it was back then, it is a thousand times worse now. I can barely stand it.” Her husband was sitting across from me. We were sitting at a picnic table just having a hot dog during the street festival. Her husband told me that it was a message I needed to get across. People are getting sick. They are having to take early retirement. They're having to quit. They don't get any severance packages. My own husband was threatened with loss of severance when he was entitled to one.

It is just terrible. It is absolutely brutal, and she told me it's far worse now than I could ever imagine, even having gone through it myself for 33 years.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Thank you, Madam.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Deltell.

Members, keep in mind that if you have any questions for Mr. Buell, he is on the line as well.

Go ahead, Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Chair.

Thanks to all of you for appearing before our committee.

My first question is for you, Madam Watson, and is also about sales targets. How do they decide on these targets? Who decides what the targets will be for the annual campaign?