National Bank CEO Criticizes Canadian Government’s Proposed Hike in Capital Gains Tax
Laurent Ferreira, CEO of National Bank of Canada, has publicly opposed the Trudeau administration’s recent proposal to increase the capital gains tax. This plan, according to Ferreira, could discourage investment and hinder innovation within Canada.
During National Bank’s annual meeting in Montreal, where Ferreira addressed shareholders, he stressed the negative implications of raising the tax from taxing half to two-thirds of capital gains on Canadian companies. This measure is part of the government’s broader budget strategy aimed at financing new housing projects.
Ferreira, the only chief executive among Canada’s major banks to endorse an open letter advocating for increased domestic investment by the country’s large pension funds, articulated his concerns about the tax change. He argues that such fiscal policies could further exacerbate the economic divide between Canada and the United States, making Canada less attractive for investment.
Additionally, the Trudeau government has enlisted Stephen Poloz, former Governor of the Bank of Canada, to lead a working group focusing on pension investment, amidst broader discussions on enhancing economic productivity and living standards in Canada.
The capital gains tax proposal has faced widespread criticism this week from various stakeholders including business groups, Ontario’s finance minister, and even Trudeau’s former finance minister, Bill Morneau. The Canadian Bankers Association has also expressed concern, noting that it is meticulously analyzing the implications of the 2024 budget.