The Canadian Life and Health Insurance Association (CLHIA) has issued its response to a Liberal platform announcement concerning corporate taxes levied on the country’s large financial institutions.
In an election campaign stop in BC, Prime Minister Justin Trudeau said that if elected, his party would act to raise corporate tax rates on big Canadian banks and insurance companies.
“Our financial institutions did very well during this pandemic, partially because Canadians pulled together and did the right thing and got the support they needed from their government,” Trudeau said, according to reports. “Given our banks have posted extraordinarily large profits and continue to be incredibly successful while others had to tighten their belts, we are going to ask them to do a little bit more.”
Under the proposal, large institutions – including the likes of Sun Life, Manulife, and Canada Life – would see their tax rate on corporate earnings above $1 billion increase from 15% to 18%. The measures are expected to add $2.5 billion annually to Canada’s coffers over the next four years.
Following the announcement, CLHIA President and CEO Stephen Frank issued a statement highlighting how life and health insurers are already helping Canadians and contributing to the economy.
“Canada’s life and health insurance industry provides over 29 million Canadians with products that support their financial security,” Frank said. “The industry directly employs over 157,000 Canadians in all provinces and territories.”
Last year, Frank said, life and health insurers paid more than $8 billion in provincial and federal taxes.
“If a future government were to introduce new tax measures, we expect that the government would consult broadly with all stakeholders,” he said. “We remain committed to working with government, today and in the future, to ensure the public policy objectives and implications of any tax changes for Canadians’ access to affordable financial solutions are clear.”