With the respect to the economy I don't want to declare victory prematurely: TD Bank CEO
The head of one of Canada’s largest banks said a surtax targeting the financial industry isn’t “great” - but whether or not the federal Liberals make good on their campaign promise to target the sector is seemingly still up in the air.
“We'll see what the details are, if it ever comes into being. But I think to have a tax specifically targeted to one particular sector probably is not, you know, great,” Bharat Masrani, president and chief executive officer of TD Bank Group, said in an interview Monday.
The federal Liberals proposed implementing an additional three per cent tax on banks and insurance companies with annual earnings of at least $1 billion while on the election campaign trail back in September.
It would raise the corporate tax rate on qualifying earnings from those businesses to 18 per cent, from the current 15 per cent.
The Liberals also made a campaign promise to implement a Canada Recovery Dividend that would apply to those same financial institutions – though the party did not release any meaningful details on how the program would work.
The Liberals touted that the two proposals would generate an extra $2.5 billion in annual revenue for the government starting in 2022-23 – but that’s if the new levies even come to fruition.
The banks were targeted specifically, according to the Liberal Party at the time, because of the quick rebound they experienced despite the economic hardship brought on by the pandemic.
“Frankly, Canadian banks are globally competitive. They are terrific institutions that have really worked well for Canada, through good times and bad times,” Masrani said.
“We did a great job through the pandemic, not only in providing relief to Canadians, with deferral programs and all that, but as well as being a conduit for government programs to make sure those are allocated and delivered in an efficient manner.”
He said he hopes that “policymakers are thinking hard as to what makes sense here,” because of the crucial role the banks played during the pandemic.
“We'll see how these things work out,” he said.