hike taxes on the country’s largest banks and insurers if he is elected for a second term at the federal election next month. According the Prime Minister, the Liberal Party will increase the corporate tax rate on big banks and insurance companies in Canada by three percentage points from the current rate of 15 per cent, on all earning exceeding $1 billion. This tax hike will be introduce along with the Party’s plans to establish a Canada Recovery Dividend to assist in the funding of its housing plan.
“We have to rebuild a better Canada — one that works for everyone. That’s why we’re going to ask our largest financial institutions, who have recovered faster and stronger than many other industries, to pay a little more so we can invest in Canadians and help them find a home of their own,” PM Trudeau said in a release.
Responding to the announcement, the Canadian Bankers Association (CBA) noted that the policy pledge, which will generate a minimum of $2.5 billion per year, will be detrimental to shareholders. “Singling out specific economic sectors for special taxation is a proven detriment to economic growth and has been abandoned as a strategy from previous governments that tried to pursue similarly counterproductive policies. Banks are already among the largest taxpayers in Canada,” the CBA, representing about 60 banks in Canada, said in a statement.
The pledge on increasing taxes came one day after the Liberal Party unveiled a housing plan which aims to build 1.4 million homes in the North American nation over the next four years.
