Canada to oppose global bank tax

TheGlobeandMail.com – ROB – Prime Minister Stephen Harper plans to make clear that Ottawa is against a co-ordinated levy
Published on Friday, Feb. 19, 2010. Last updated on Friday, Feb. 19, 2010.   Kevin Carmichael

Prime Minister Stephen Harper intends to soon make clear that his government opposes a globally co-ordinated tax on banks as a way to curb the excesses that caused the financial crisis, a government official said Friday.

Mr. Harper feels the declaration is necessary to counter impressions left by British Prime Minister Gordon Brown and other European leaders that the Group of 20 is converging around the idea of charging financial institutions some form of levy to raise funds for any future bailouts, the official said.

“As far as we’re concerned, that’s not going to happen,” said the official, who spoke on the condition of anonymity.

The timing for the declaration hasn’t been set. It could come as early as Friday, over the weekend or even next week, the official said.

The push for global co-cordination has been gathering steam. While Mr. Brown has promoted a global initiative, President Barack Obama has already unviled a levy of 0.15 per cent on liabilities of financial institutions with assets of more than $50-billion (U.S.), and Britain and France are taxing bank bonuses.

In late January, just before the Group of Seven finance ministers and central bankers met in Iqaluit, Finance Minister Jim Flaherty made it clear Canada does not want to add taxes in the financial sector.

“We are not about to impose new taxes on financial institutions in this country,” the finance minister told reporters at the time. “We are not about to impose limits on executive compensation in the financial insitituions in Canada for a very simple reason. Canadians did not have to put taxpayers’ money into our financial institutions. We did not have to bail them out.”

At a conference in London Friday, Mr. Brown said he hoped for an agreement on a global tax at a Group of Eight meeting in Canada and a Group of 20 meeting in South Korea.

The British prime minister also pushed for global co-ordination on regulations: “Common rules for capital and liquidity, common standards for supervision, common rules for bonuses and a shared way of assessing the contribution banks should make to society, free of the unfair and disproportionate use of regulatory and tax havens which penalize countries doing the right things.”

With files from Reuters

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