The Globe and Mail reports in its Friday edition that two new taxes the federal government is levying on Canada's largest banks and insurers are estimated to raise $5.3-billion over five years, less than what was anticipated in the government's April budget. The Globe's James Bradshaw writes that a permanent 1.5-per-cent increase to the corporate income tax rate for banks and insurers is expected to raise $266-million this year and $2.25-billion over five years, according to the Parliamentary Budget Officer.
A temporary tax called the Canada Recovery Dividend that will be imposed over five years is expected to raise $604-million annually starting in 2022, for a total of $3.02-billion. Both taxes apply only to large institutions: The corporate tax hike is charged on taxable profits above $100-million, while the recovery dividend is a 15-per-cent levy on taxable income above $1-billion earned in Canada. Bank bosses argue that singling out one sector for higher taxes is bad for Canada's business climate, and that tapping financial institutions' profits will ultimately hurt everyday investors who rely on returns from bank stocks and dividends. Both tax measures are less onerous than what the Liberals pledged last year.
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