In Canada, Trudeau wants to tax the big banks and insurance companies

Canadian banks and insurance companies blame it after Prime Minister Justin Trudeau’s announcements. The latter has announced his intention to further tax Canada’s major financial institutions if he is re-elected in September.

A rather unexpected decision on the part of the liberal Prime Minister, who is trying to bounce back after failing to regain a majority in Parliament.

At a press conference in Vancouver last Wednesday, he pledged to increase taxes paid by banks and insurance companies on profits of more than $ 1 billion by 3 percentage points.

This measure would raise the tax rate to 18%, compared to the current 15%. According to Justin Trudeau, “the big banks and insurance companies have done very well in recent months”, and so it is time to “ask a little more”.

The Prime Minister also wants the establishment of a “dividend of the recovery of Canada”, which would force these same financial institutions to contribute more to the recovery of the country.

Good results for banks

These two initiatives would generate C $ 2.5 billion per year over the next 4 years, starting in 2022, according to a press release from the Liberal Party.

The Canadian Bankers Association (CBA), which represents 280,000 employees, is strongly against these measures. In 2019, the country’s largest banks paid $ 12.7 billion in income tax, she recalled.

“Targeting specific economic sectors for special taxation has been proven to hamper economic growth. This strategy has been abandoned by previous governments, ”ABC told Bloomberg.

The announcement comes in the middle of a period of good results for the banks. On Wednesday, the leader Royal Bank of Canada (RBC) thus unveiled a net profit of 4.3 billion dollars for the quarter ended July 31, up 34%.

Promote access to property

With the money withheld from the tax hike, the Prime Minister plans to help Canadians access homeownership. His party promised last Tuesday to put in place a “charter of rights” for new buyers, creating a tax-free savings account of up to $ 40,000 for citizens under the age of 40.

In addition, this charter “will prohibit the purchase of real estate by foreigners of Canadian properties for the next two years to ensure that Canadians have more access to the purchase of homes.”

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