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Bank of Montreal
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Shares Issued 647,872,286
Close 2021-09-13 C$ 128.79
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FP/wire say Big Six banks may fire staff if taxed more

2021-09-13 09:08 ET - In the News

See In the News (C-TD) Toronto-Dominion Bank

The Financial Post reports in its Saturday edition that a campaign pledge by Canada's ruling Liberals to raise corporate taxes on banks to help pay for pandemic relief could lead to job cuts and higher borrowing costs as the lenders take steps to protect their profits, investors and political analysts said. A Reuters dispatch to the Post says that seeking an edge in a tight race ahead of the Sept. 20 election, Prime Minister Justin Trudeau said last month his party, if re-elected, would hike the net tax rate on the country's most profitable banks and insurance companies to 18 per cent from 15 per cent on all earnings over $1-billion, generating $2.5-billion a year over four years. Trudeau said that given the banks' big profits, "we're going to ask them to do a little bit more." Money managers are not pleased. If the tax hikes are enacted, the biggest lenders, which would be the most affected, could respond by cutting jobs and raising borrowing costs, while the reduced earnings could hit retirees. "The banks employ, across the board, well over 100,000 people. If their taxes are going up, maybe the banks fire more people," said Bryden Teich at Avenue Investment Management, who holds bank shares. "Is that what they want?"

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