By Canadian Press

Liberals expected to raise taxes on big banks, insurance companies in budget

Apr 6, 2022 | 11:34 AM

OTTAWA — The final message to Scotiabank shareholders from its president and CEO’s annual address: a higher tax on the country’s biggest banks is a tax on you. 

Brian Porter called a tax hike that’s widely expected to be included in Thursday’s budget a “knee-jerk reaction that sends the wrong message to the global investment community.”

He made the comments in written remarks prepared for Tuesday’s annual shareholder meeting, but he did not deliver the address in person.

During the 2021 election campaign, Prime Minister Justin Trudeau promised a higher corporate tax rate for the country’s biggest banks and insurance companies on earnings over $1 billion, a measure the Liberals estimated would bring in about $1.2 billion a year.

The Liberals also said they will move forward on taxing financial institutions “in the near term” in the confidence and supply agreement with the NDP, something leader Jagmeet Singh has said will help the wealthiest pay their fair share.

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The six largest banks made $46.6 billion in profits in 2019, according to the Canadian Bankers Association.

But economists argue that while the policy makes for “great optics,” it won’t lead to lower bank profits since they’ll pass the extra cost on to customers and workers. 

This report by The Canadian Press was first published April 6, 2022.

The Canadian Press