Canadian premier Justin Trudeau declares "war" on finance. The 49-year-old liberal, in office since 2015, is a candidate for reconfirmation and has called early elections on 20 September (a week before the German ones which will decide the post-Merkel election), motivating the decision with the intention of "leaving to the Canadians the choice on how to get out of the pandemic”. The opposition denounced a political calculation, but in the meantime Trudeau launched his electoral program at a press conference, which proved to be surprising in some respects and particularly harsh on his country's financial institutions. In fact, the outgoing prime minister wants raise taxes by 3 percentage points for all banks and insurance companies that make at least $1 billion in profits.
The tax would therefore rise from 15% to 18%: "The banks have done very well in recent times, the time has come to ask them for something more", said Trudeau in Vancouver, revealing his intention to set up a sort of "recovery dividend", an extra contribution requested from credit institutions and insurance companies to support Canada's economic recovery. The idea is to generate a surplus of $2,5 billion annually starting from 2022 and for four years, to be allocated to facilitating mortgages for young families for the purchase of their first home. "Thanks to the stability of our financial markets, Canadian banks and insurance companies were among the most profitable in the world even during the pandemic - explains a release from the Liberal Party -, in this period the EBIT of the largest groups grew by 17% ”.
"An economic system in which more and more Canadians can access the purchase of a real estate property - continues Trudeau in his program - is an advantage for the whole country and ultimately favors the same profitability of the financial sector". To facilitate access to the purchase of a first home, the premier intends to establish a "Charter of Rights" for new buyers, which he provides for the under 40s tax exemption for savings of up to $40.000, as well as the explicit prohibition for foreign citizens to buy real estate in Canada for the next two years, in order to guarantee ample availability on the market for residents. The squeeze obviously does not convince the financial world: the ABC (banking association), which represents 280.000 employees, points out that since 2019 the big banks have paid the state 12,7 billion dollars.
“Taxing a specific category more – explains the ABC to Bloomberg – harms economic growth and it has already been demonstrated in the past. However on super profits Trudeau is not entirely wrong, given that just a few days ago the country's main bank, the Royal Bank of Canada, closed the second quarter with a net profit of 4,3 billion, up 34%.
