The chief executive of the Toronto-Dominion Bank said Thursday that the increase in the corporate tax rate targeting financial institutions announced in last week’s federal budget “could have unintended consequences.”
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 proposed 1.5% surtax on bank profits over $100 million, as well as a one-time 15% charge on revenues over $1 billion for the year tax bill 2021 – a decision that leaders of Canada’s major banks say could hurt Canada’s competitiveness on the world stage.
Masrani also urged the Canadian government to “reduce deficits accumulated during the pandemic and focus on growth” amid soaring inflation and lingering supply chain challenges.
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 came up several times during the meeting, such as at previous Canadian bank shareholder meetings over the past two weeks. The bank has been particularly solicited for its participation in the Trans Mountain pipeline extension project.
Like the rest of the Big Five banks, TD has committed to net zero emissions by 2050, but continues to finance and advise on fossil fuel projects.
Masrani said TD is focused on ensuring the path to net zero is “fair and orderly” and that a continuous supply of energy 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.
Wealth inequality and the pay gap in large organizations between executives and the average worker were also raised, in particular a demand for the bank to publish its pay ratios.
This follows TD’s announcement in an internal memo on Wednesday of a 3% wage increase for most of its non-executive employees, effective July 1.
The bank was also asked about the Emergencies Act invoked by the federal government in February during anti-COVID mandate protests in Ottawa. More than 200 bank accounts were frozen during this time.
Masrani explained that TD follows the rules that apply to the Canadian financial sector and that is exactly what the bank has been doing during this time.
The annual meeting of shareholders was held in person and could be viewed via live webcast.
This report from The Canadian Press was first published on April 14, 2022.
Companies in this story: (TSX: TD)
Adena Ali, The Canadian Press