(Toronto) The big boss of the TD Bank warned Thursday that the increase in the corporate tax rate targeting financial institutions, announced in the federal budget last week, “could have unintended consequences”.
Updated yesterday at 5:33 p.m.
At the bank’s annual shareholders’ meeting, chief executive Bharat Masrani said the federal government had chosen to “target” the Canadian banking sector with this measure.
The Liberals’ 2022 budget included a 1.5 percentage point hike in the tax rate on bank profits over $100 million, as well as a one-time tax of 15% on taxable income over $1 billion for the fiscal year 2021 — a decision that leaders of Canada’s major banks say could hurt Canada’s competitiveness on the world stage.
Mr Masrani also urged the Canadian government to “reduce the deficits accumulated during the pandemic and focus on growth” amid soaring inflation and continuing supply chain difficulties.
He called for new manufacturing and production capacity to help navigate and ease the supply crisis and prevent long-term inflation.
TD’s climate strategy was brought up several times during the meeting, similar to previous meetings of shareholders of Canadian banks in the past two weeks. The bank was specifically questioned about its involvement in the Trans Mountain pipeline expansion project.
Like other major banks in the country, TD has pledged to be carbon neutral by 2050, but it continues to finance and advise on fossil fuel projects.
Masrani said TD is working to ensure the path to carbon neutrality is “fair and orderly” and that a sustained energy supply is an important part of the transition to a low-carbon economy. . He added that there could be negative societal impacts if this supply is abruptly cut off.
The unequal distribution of wealth and the pay gap in large organizations between executives and average workers were also raised, particularly during a request for the bank to publish its pay ratios.
TD announced in an internal memo on Wednesday a 3.0% wage increase for most of its non-executive employees, effective 1er July.
The bank was also asked about the Emergencies Act invoked by the federal government in February, during protests against COVID-19 measures in Ottawa. More than 200 bank accounts were then frozen.
Masrani said TD followed the rules that apply to the Canadian financial sector and that was exactly what it did at the time.
The annual meeting of shareholders was held in person and could be viewed live via webcast.