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Ottawa hikes up taxes for big banks, life insurance companies in 2022 budget

Click to play video: 'A preview of how the 2022 federal budget could impact your wallet'
A preview of how the 2022 federal budget could impact your wallet
The Liberal government is set to release the federal budget today with issues like cost-of-living, defence and more. Personal finance expert Rubina Ahmed-Haq highlights the issues and how it will affect Canadians. – Apr 7, 2022

Ottawa is raising taxes on Canada‘s big banks and life insurance companies.

The government says the county’s major financial institutions made significant profits during the pandemic and have recovered faster than other parts of the economy – in part due to the federal pandemic supports for people and businesses.

The federal budget includes a one-time, 15-per-cent charge on taxable income above $1 billion for the 2021 tax year for the country’s big financial institutions.

Ottawa also plans to permanently increase the corporate income tax rate for banking and life insurance groups by 1.5 percentage points for taxable income above $100 million.

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The increase would bring the tax rate on income above that threshold to 16.5 per cent from 15 per cent.

The budget estimates the two measures combined will raise $6.1 billion over five years with some $4.05 billion attributable to the one-time tax.

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