Ottawa is raising taxes on Canada’s big banks and life insurance companies.
The government says the county’s major financialxjmtzyw institutions made significant profits during the pandemic and have recovered faster than other parts of the economy — in part due to the federal pandemic supports for people and businesses.
The federal budget includes a one-time, 15-per-cent charge on taxable income above $1 billion for the 2021 tax year for the country’s big financial institutions.
Ottawa also plans to permanently increase the corporate income tax rate for banking and life insurance groups by 1.5 percentage points for taxable income above $100 million.
The increase would bring the tax rate on income above that threshold to 16.5 per cent from 15 per cent.
The budget estimates the two measures combined will raise $6.1 billion over five years with some $4.05 billion attributable to the one-time tax.
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Bay Street in Canada’s financial district is shown in Toronto on Wednesday, March 18, 2020. THE CANADIAN PRESS/Nathan Denette
