The budget released Thursday shows that the government now plans to raise the corporate income tax rate to 16.5 percent from 15 percent for taxable income of more than $ 100 million in financial institutions. When the Liberal Party of Canada first introduced the measure during last year’s campaign, the plan was to raise the tax rate to 18 percent from 15 percent for more than $ 1 billion in profits for the most profitable banks and insurance companies. The government estimates that its revised proposal will result in nearly $ 4.05 billion in cumulative revenue by fiscal year 2026-2027. The original proposal was committed to generate $ 5.3 billion by 2025-26. The budget also reflects a less generous benefit than the other policy designed to make the Bay Street giants more likely to contribute to Canada’s economic recovery from the pandemic. The so-called Canada Recovery Dividend, which was similarly revealed in the election campaign but has not received as much attention as the extra tax, will see banks and insurers pay a lump sum tax of 15 percent on taxable income of more than $ 1 billion. dollars for the last tax year, according to the budget. Payments will be split in equal installments over the viewing horizon. The finance department now estimates that Canada’s recovery dividend will generate nearly $ 2.06 billion in revenue over five years. When first proposed, the Liberals projected $ 5.5 billion in revenue for fiscal year 2025-26. While the government has reduced the severity of its special sectoral surcharges, it has nevertheless faced criticism immediately after the budget was tabled. “My reaction is disappointing. I do not think this is a good policy, I think it sets a bad precedent. “It’s so simple, really,” said Ray Williams, vice president of National Bank Financial, in an interview. “It seems to me what the bank tax does… [it] reinforced this sense that Canada does not have a sufficient eye on the issue of long-term development. And that’s really damaging, “said Sean Speer, a former senior adviser to Prime Minister Stephen Harper. “And so it seems to me that the cost of the bank tax is much higher than the relatively low revenue it is going to generate, exactly in terms of what it says about this government and what it says about Canada’s opening up to investment.” he added. Before the details of the budget were presented, there were a number of sentiments expressed by some of the leaders whose institutions will be subject to targeted taxes. The CEO of Bank of Nova Scotia, Brian Porter, was ready to criticize hypertension as “a spasmodic reaction” in statements prepared for delivery at his company’s annual meeting on Tuesday. However, he was excluded from the event because he tested positive for COVID-19. “How do we plan to handle this? “I guess we’ll pay for it,” Royal Bank of Canada CEO Dave McKay told reporters after RBC’s annual meeting Thursday afternoon, just hours before the budget was tabled. “In order not to be fancy – it enters into law and it is something we have to accept. We follow the laws and programs in the countries where we operate. “I’m not sure what else to say.”
