$2.5 billion per year, triggered complaints from the sector that it was being penalised for its strong performance during the pandemic. Nevertheless, now with twentieth-September vote having produced another Liberal minority government, and the NDP holding the balance of power in Parliament, many are of the view that the financial sector should brace itself for the big change ahead.
“It is consistent with the Liberals announced policy and plays well with the NDP desire to tax substantial sources of wealth,” Jon Levin, a veteran Bay Street lawyer, said. “My guess is, especially in the context of a minority government, they will quickly move ahead with the tax without any consultation… I expect them to do this in order to show that they are meeting their election promises.”
During their own election campaigns, the NDP also vowed to target large corporations in its plans for a two per cent increase in the top federal marginal tax rate, along with a hike in the capital gains inclusion rate and a raise in wealth tax for the “super-rich” by one per cent.
According to the Canadian Bankers Association it a majority of the Canadians who are bank shareholders receiving dividends through share ownership or pension and mutual funds who will be penalised by the reduced income of banks and other financial service providers. Business groups have also voiced their opposition to the proposed plan, pointed out that the newly formed government’s focus should be on economic recovery and not on government spending.
“The worst way to encourage new investment in Canada would be to bring in new taxes or regulations that say to businesses that our goal is to punish success,” Perrin Beatty, the CEO of the Canadian Chamber of Commerce, said. “While other countries are anxious to partner with their business communities, too often Ottawa treats business as an opponent or as an obstacle to be overcome. Business-bashing may be good politics, but it’s bad economics and comes at a very high cost.”
