What Is Redlining in Canada?

Redlining is a form of discrimination where people are denied or disadvantaged when accessing mortgages, housing or other financial services because of characteristics such as race, ethnicity or the neighbourhood where they live.

The term originated in the United States, but Canada has its own history of discriminatory housing practices and continues to face concerns about discrimination in housing and banking.

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Where Did the Term Redlining Come From?

The term comes from housing and mortgage practices in the United States during the 20th century.

Neighbourhoods were graded according to perceived lending risk. Areas with larger Black, immigrant and working-class populations were often considered higher risk and marked in red on residential maps.

People living in these neighbourhoods could have greater difficulty accessing mortgages and other forms of financing.

The result was that many families were prevented from buying homes and building wealth through property ownership.

Did Redlining Happen in Canada?

Canada did not have exactly the same government-created redlining system as the United States.

However, Canada has a documented history of racial discrimination in housing.

For example, racially restrictive property covenants were once used to prevent people from certain racial or religious backgrounds from buying or occupying property. In the 1951 case Noble and Wolf v. Alley, the Supreme Court of Canada ruled against enforcing a covenant that restricted property ownership based on race.

Black communities also experienced residential segregation and unequal access to land and public services. The federal government notes that discriminatory housing practices remained legal in Canada until the 1960s.

Is Redlining Still a Problem in Canada?

Explicitly refusing someone a financial service because of their race is prohibited discrimination.

However, discriminatory treatment in banking and housing has not disappeared.

The Canadian Human Rights Commission has reported complaints involving systemic anti-Black racism in the banking sector. Examples have included Black customers facing additional questioning or identification requirements when asking about loans.

Discrimination can also be indirect. A lending rule may appear neutral but disproportionately disadvantage a protected group without a reasonable justification. The Canadian Human Rights Commission specifically gives the example of bank lending rules that make it unreasonably difficult for newcomers to obtain loans.

Why Does Redlining Matter?

Home ownership has historically been one way families build wealth.

Being denied fair access to mortgages or desirable neighbourhoods can affect more than someone's immediate housing options.

Over time, it can influence:

• Home ownership

• Property appreciation

• Access to credit

• Neighbourhood investment

• Intergenerational wealth

• Financial opportunities for future generations

The effects can continue even after explicitly discriminatory policies are removed.

Is Redlining Legal in Canada?

Discrimination based on protected characteristics such as race, colour or national or ethnic origin is prohibited under Canadian human rights law.

The Canadian Human Rights Act applies to federally regulated organizations, including banks.

Provincial and territorial human rights laws also provide protections in areas such as housing.

A lender can still consider legitimate financial factors when deciding whether to approve credit. These can include income, debt, credit history and the value of the property.

The issue becomes discrimination when someone receives negative treatment because of a protected characteristic rather than legitimate lending criteria.

What Can You Do If You Believe You Experienced Lending Discrimination?

Start by documenting what happened.

Keep records of:

• Applications

• Emails

• Letters

• Dates and times

• Names of representatives

• Reasons you were given for a decision

You can also ask the financial institution to explain its decision and use its complaint process.

If you believe the treatment was connected to a protected ground such as race or national or ethnic origin, you may also be able to make a human rights complaint. The appropriate organization depends on whether the institution falls under federal or provincial jurisdiction.

Redlining is ultimately about unequal access. While Canada's history differs from the United States, discriminatory housing and lending practices have existed here too, and equal access to financial services remains an important consumer and human rights issue.