Canada’s online broker industry is not an easy place to thrive. Top players, including our nation’s Big Five banks, have been offering investors trading software since the 2000s.

However, Qtrade has been in this game the whole way. And after decades of competing against Questrade and the big banks, they are finally gunning for the title of “Canada’s Best Broker”.

They are doing this in several ways. First of all, they are running promos like their “50 Free Trades” offer, which promises 50 fee-free transactions to investors that open accounts before September 30, 2021.

But even after that offer ends, Qtrade’s incentives have made it one of the cheapest online brokers to use. For example, they offer free purchasing and selling of over 100 ETFs to go along with excellent customer service and investor tools.

What Does the Canadian Online Broker Landscape Look Like?

However, Qtrade’s competitors won’t just let this company claim the title of Canada’s #1 online brokerage. So, let’s take a look at each of these players in detail.

Questrade

Like Qtrade, Questrade has served Canadian investors since 1999. And on many review sites, this online brokerage finds itself neck-and-neck with their forever rival.

So, what makes Questrade so appealing?  Like Qtrade, they allow traders to buy ETFs without paying a transaction fee. And when you sign up for a Questrade account, they give investors $50 worth of free trades.

But overall, having the lowest overall transaction fees is the biggest feature in Questrade’s cap. Eventually, a trader will run out of free trades. And when they go to sell ETFs, they’ll have to pay a fee. But these facts are tempered by trading fees that are as low as $4.95 per transaction.

All things considered, Questrade traders (on average) pay the least per trade of any of Canada’s major discount brokers. That’s not a bad calling card to have, and it’s a big reason why they rank near the top of many lists.

BMO Investorline

When you compare the American online brokerage scene with Canada’s, one thing stands out. Here, big banks make up a disproportionately high percentage of market participants.

Of these players, BMO Investorline sticks out. Normally, when an investor thinks of a bank, generous isn’t an adjective that pops into their head. But when a new client creates an account with BMO, this bank offers free buying and selling of over 80 ETFs.

What’s more, BMO Investorline also does promos through affiliate marketers. For instance, investors can get up to $2,000 cashback by placing investment capital in a BMO investing account.

But, as with any bank, there’s a catch. Their standard transaction fee is $9.95 – that’s among the most expensive online brokerage fees in Canada. However, if you qualify for an “elite” trading account, you get a discount of $2 for a transaction fee of only $7.95.

CIBC Investor’s Edge

So, there are serious downsides if an investor chooses to go with a big bank discount broker. Sure, these platforms are convenient, but users pay for that convenience via higher transaction fees.

It’s on this count that CIBC stands apart from its colleagues. When customers use CIBC Investor’s Edge, they pay the lowest bank brokerages in Canada on equity trades – just $6.95.

But that’s not the only advantage that CIBC Investor’s Edge offers. For example, account maintenance fees are charged by most Canadian online brokers if their customers don’t hold a large enough balance. But on CIBC’s platform, balances above $10,000 are exempt from these fees – easily the lowest among the banks.

Beyond that, though, Investor’s Edge is quite mediocre. Its features are threadbare, leaving investors to do their own research. But for those willing to undertake this effort on their own, the cost savings may be worth it.

RBC Direct Investing

For some investors, ease of use, along with convenience, is enough to win over their business. RBC Direct Investing scores points on these fronts – its platform is well laid out, making it easy to find what you’re looking for.

This advantage works especially well for those who live on their phone. Among all the Canadian online brokers, RBC’s investment app features some of the best-designed features. So, if an investor currently banks with RBC, these benefits may be enough to get them to sign up.

But, compared to the competition, RBC Direct Investing falls flat on other important measures. Brokerage fees are the biggest bone of contention – at $9.95, their standard charge is much pricier than other platforms.

Now, transaction fees aren’t a worry for big investors, as RBC only charges elite accounts $6.95 per trade. But for everyone else, RBC’s rates (and underwhelming customer service) might be too bad to ignore.

Wealthsimple Trade

When it comes to free-trade brokers in Canada, much has been made of Qtrade and Questrade. Both discount brokers offer free trades to new investors, but only to a point.

Wealthsimple Trade is different – much different. On this platform, all equity trades are fee-free. Not only that, but they don’t charge account maintenance fees either.

Of course, in return for having fee-free transactions, there are trade-offs. For example, Wealthsimple lacks the tools, data, and research resources that other platforms have. And, whenever you purchase stocks listed in USD, you’ll have to pay an exchange rate fee of 1.5%.

But for confident investors who want to save on fees, Wealthsimple is an intriguing choice.

What Makes Qtrade Stand Out?

So, in the face of all this competition, what makes Qtrade a contender for Canada’s best online broker? It all starts with their sign-up offer – when an investor opens an account with Qtrade, their first 50 trades are free. Note: that isn’t $50 in free trades, it’s 50 free trades. That’s a solid, attractive incentive.

And then, there is Qtrade’s selection of fee-free ETFs. In all, investors can choose from over one hundred of them. But, here’s the rub: this online brokerage doesn’t charge fees on buying or selling these ETFs. On competing sites, they only suspend fees on the purchase of covered ETFs. And their selection of fee-free ETFs isn’t as abundant as Qtrade.

But what about when investors have to start paying for trades? On this front, Qtrade once again compares favourably with its competitors. At the most, you’ll pay $8.75 per transaction on this site, which beats the banks. However, its rival Questrade bests them with a rock bottom rate of $4.95.

Finally, Qtrade provides users with the resources needed to make sound investing decisions. They have a regularly updated education section that gives less experienced investors a good grounding in the basics. Additionally, they have tools that help users assess risk and whether their portfolio meets their financial goals.

Combine the above with Qtrade’s above-average customer service, and it’s not surprising that some publications are dubbing them Canada’s top online broker.

Competition in the Canadian Discount Broker Space is Heating Up

The incentives mentioned above are new to many people. After all, it’s only in the past few years that trading has become as attractive as it is now.

For instance, Qtrade’s 50 free trades deal only came about recently (and is set to expire soon). Similarly, they and Questrade have gone to war over free ETF trading. Questrade has one foot in the pool (fee-free buying), while Qtrade has gone all-in (free buying AND selling).

Even the banks are getting in on the action. BMO offers fee-free buying and selling of more than 80 ETFs. But they haven’t stopped there – if investors park enough capital in an Investorline account, they could get up to $2,000 back from BMO. That’s unthinkable for a Canadian financial institution.

But it just underscores how wild things are getting in the Canadian discount broker industry. So, all in all, it’s a great time to be a trader.

Will American Online Brokers Enter the Pool?

While the Canadian online broker market is getting ravenous, it doesn’t hold a candle to America’s. South of the 49th parallel, there are dozens of discount brokers to choose from. Of them, Robinhood, a mobile trading app, is among the most notorious.

Even after the GME debacle, it remains one of America’s most popular trading platforms. But eventually, like other US trading firms, growth will taper off. Once it does, will they head north in search of further gains?

To an extent, American online brokerages have been testing the waters. Wealthsimple is the biggest success story, and Interactive Brokers, an advanced trading platform, has also opened up its platform to Canadian investors.

However, it appears Robinhood has no immediate plans to expand northward. At one point, they had mused about opening up to Canadian investors on Twitter. But with recent controversies and their IPO, these plans (if any) and plans to expand to the UK and Australia were suspended.

But that doesn’t mean Robinhood will never expand internationally. The appetite for investing remains high in markets like Canada. Because of this, we won’t be surprised if Robinhood announces Canadian expansion plans at some point in the next several years.

Does Qtrade Have What it Takes to be #1?

More Canadians than ever are plowing their unproductive capital into markets. And Qtrade has made the most of this trend, offering some truly daring promotions. Qtrade may not be best in all areas, but even their weaknesses aren’t that bad.

When you contrast those weaknesses against Qtrade’s strong points, it’s easy to see how this firm could end 2021 as Canada’s top online broker.