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The chief executive of one of Canada’s largest banks is speaking out against the Trudeau government’s plan to raise taxes on capital gains, arguing it won’t spur investment in the country.
“It does not send the right signal for risk-taking, for investments, innovation or long-term wealth creation and ultimately for the social fabric of our country,” Laurent Ferreira, chief executive of National Bank of Canada, said in an interview Friday.
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Ferreira addressed shareholders of National Bank, the country’s sixth-largest lender, earlier in the day during the bank’s annual meeting in Montreal. He explained why he was the only big bank CEO to sign an open letter last month calling on Canada’s large and influential pension funds to invest more domestically.
“My objective was to stimulate a discussion around the investment and productivity challenges in our country,” Ferreira said at the meeting. “All investors and banks must contribute to strengthening the Canadian economy by investing within our borders.”
Prime Minister Justin Trudeau’s government said this week it has tapped former Bank of Canada governor Stephen Poloz to head up a “working group” on the topic of pension investment.
Regulatory and fiscal barriers are “hindering Canada’s attractiveness” and must be lifted to increase Canadians’ standard of living, Ferreira said Friday. One of those fiscal barriers is the tax increase, which will only further widen an existing gap between the United States and Canada, he said.
The government said in its budget on Tuesday that it will tax Canadian companies on two-thirds of their capital gains, up from half currently, part of a plan to help pay for billions of dollars in new spending on housing.
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