Government of Canada Sends Worldwide Message in Opposition to a Global Bank Tax

Statement

The Honourable Tony Clement, PC, MP
Minister of Industry

Ottawa, Ontario
May 18, 2010

Good afternoon. I would like to say a few words about our government’s strategy for economic recovery. I will then take a few questions.

The past year and a half has been a difficult time for many Canadians, and I would like to speak briefly to the measures we have taken to ensure a strong and sustainable economic recovery.

A year and a half ago, Canada was drawn into the deepest global recession that we’ve seen in several generations. Global financial markets were tremendously damaged. Average Canadians and their families have been affected by job losses, the loss of their savings and uncertainty about the future.

But make no mistake about it: our economy is on the right path to recovery. Economic and financial authorities around the globe agree that Canada entered the recession in much better shape than the rest of the industrialized world, and all signs point to us emerging from it stronger than ever.

We, as a nation, have learned much from the economic practices of the past, and our government is taking constructive measures to build an economy fit for the future.

We are committed to increasing innovation, job creation and economic recovery within Canada. Through investment and key stimulus measures, Canada’s Economic Action Plan has established our approach to economic recovery as a model for the world. In April 2010 alone, we witnessed the Canadian economy foster 108 000 new jobs. Families and communities all across the country are benefiting — now — from a government focused on the economy.

Now, I would like to touch upon what has become a prominent issue for struggling economies around the world: a bank tax.

I am one of four ministers spanning the globe to speak with one voice for Canada.

Make no mistake. Our government is opposed to a global bank tax. This tax would reach into consumers’ pockets and punish our financial institutions, which have taken precautions to avoid turmoil.

As we witnessed — and, indeed, were caught up in — the global economic crisis, stark deficiencies in the international banking community became apparent. It is worth noting that these problems were not experienced by Canadian banks. Some international groups have underlined the importance of inclusive global economic governance. As a result, some have voiced their support for an international bank tax.

As Prime Minister Stephen Harper said recently, “Just as you can’t tax an economy into prosperity, you can’t tax the financial sector into stability.” Canada is, and will remain, opposed to a tax that would penalize financial institutions that remained strong and prosperous while many of the world’s banks failed.

Canada’s record is undeniably admirable. During the most troubling months of the global economic recession, leverage ratios were maintained at sustainable levels. Our banks avoided toxic assets at every turn. In the opinion of the World Economic Forum and Moody’s Corporation, Canada’s banking sector is the soundest in the world.

It is imperative for Canada to remain steadfast in opposition to a global bank tax and to continue implementation of a strong regulatory framework. We must ensure the transparency of our banking sector but, at the same time, we must not unduly burden it with a tax that will put it at a competitive disadvantage to banks in other countries.

And, of course, the most important reason why we oppose a bank tax is because it is unfair to Canadian consumers, who would ultimately foot the bill as they use their banking services.

This government is here to protect Canadian consumers from unfair taxation.

This message is being delivered now, today, to governments around the globe. The Honourable Jim Flaherty, Minister of Finance, is in Mumbai, India, delivering this message to the Confederation of Indian Industry. The Honourable Stockwell Day, President of the Treasury Board and Minister for the Asia-Pacific Gateway, is in Shanghai, China, speaking to more than 100 business leaders there. And the Honourable Peter Van Loan, Minister of International Trade, is making Canada’s position clear in a speech to the U.S. Chamber of Commerce in Washington, D.C.

With continued discipline on our part, I am confident that we will have a great economic future ahead of us. The Government of Canada is committed to regaining our country’s financial poise and ensuring that we remain a leader in the global economy.

Thank you.