OTTAWA — At Scotiabank’s annual meeting on Tuesday, the president and chief executive warned that raising taxes on the profits of the country’s biggest banks would be tantamount to taxing shareholders.
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Brian Porter called the tax hike expected to be announced in Thursday’s federal budget “a knee-jerk reaction that sends the wrong message to the international investment community.”
Mr. Porter made the comments in written remarks prepared for the annual meeting of shareholders — he did not deliver the speech in person due to COVID-19.
During the 2021 election campaign, Liberal Leader Justin Trudeau promised a corporate tax rate hike for the nation’s largest banks and insurance companies, on annual profits above $1 billion. The Liberals estimate that this tax measure would bring regarding $1.2 billion a year into state coffers.
Then, on March 22, as part of the “support and confidence agreement” concluded with the New Democratic Party, the Prime Minister indicated that he would go ahead “in the short term with regard to the tax changes on financial institutions that have made big profits during the pandemic”.
NDP Leader Jagmeet Singh said the tax will help ensure the wealthiest pay their fair share.
Canada’s six largest banks earned $46.6 billion in profits in 2019, according to the Canadian Bankers Association.
But economists believe that even if this tax measure has a “laudable goal”, it will not lead to a drop in profits for the big banks, because these financial institutions will pass on the additional costs to their customers and employees.
The Canadian Press
