Why Can't I Get The Bank of Canada Exchange Rate?
The Bank of Canada exchange rate is typically an interbank rate only available to financial institutions with large volumes. Canadian banks add a substantial markup to the exchange rate they offer to retail customers and that is how they make money for delivering the service. This markup can be 2% to 5% depending on the currency. Banks have to pay for holding the cash and keeping the currency on hand. The tellers need to be paid and also rent has to be paid for space. That being said, the exchange rate markups they charge are quite high compared to other foreign exchange providers. The reason bank exchange rates are so high is because regardless of the markup, Canadians will continue to use the banks to exchange money. There is no competitive pressure for the banks to reduce exchange rate fees. The same goes for currency kiosks at the airport, they have to pay for rent, and they offer a convenient service, and most people at that time pretty much need to convert currency to use it, so they will be willing to pay markups to exchange money there for convenience.