The government says the county’s major financial institutions made significant profits during the pandemic and have recovered faster than other parts of the economy, largely thanks to government support programs. “The federal government is therefore proposing two measures to ensure that these large financial institutions are helping to support Canada’s wider recovery,” according to budget documents. The federal budget was tabled in the House of Commons on Thursday. The bulk of what the government calls the “Canada Recovery Dividend” consists of a one-time tax of 15 percent on profits of more than $ 1 billion for fiscal year 2021. The move is expected to generate about $ 4 billion. A second change will lead the government to raise the corporate tax rate for banks and insurance companies on profits of more than $ 100 million to 16.5 percent, up from 15 percent previously. The move is expected to generate $ 445 million a year in state coffers. During the five years of the budget forecast, this brings the total of bank tax changes to more than $ 6 billion. CLOCKS The Minister of Finance presents the federal budget:
Freeland gives a speech on the 2022 budget
Finance Minister Chrystia Freeland addresses the 2022 budget in the House of Commons. 30:33
The idea was circulated on the campaign trail last year, and those in the investment community have spoken out against any plan to punish a sector of the economy for being profitable.
Scotiabank CEO Brian Porter opposed the idea of such a tax in his remarks at the bank’s annual general meeting this week, calling the plan “a jerk that sends the wrong message to the global investment community.”
