Toronto-Dominion Bank’s chief executive said Thursday that the corporate tax rate increase targeting financial institutions announced in last week’s federal budget “could lead to unintended consequences.”
At the bank’s annual shareholder meeting, CEO Bharat Masrani said the federal government has chosen to “single-out” the Canadian banking sector with this measure.
The Liberals’ 2022 budget included a proposed surtax of 1.5% on bank profits over $100 million, as well as a one-time 15% charge on income above $1 billion for the 2021 tax year — a move Canada’s big bank leaders say could hurt Canada’s competitiveness on the global stage.
Masrani also urged the Canadian government to “reduce deficits built up during the pandemic and focus on growth” amid soaring inflation and ongoing supply chain challenges.
He called for new manufacturing and production capabilities to help navigate and ease the supply crunch and prevent long-term inflation.
TD’s climate strategy was brought up several times during the meeting, similar to previous Canadian bank shareholder meetings over the last couple of weeks. The bank was specifically pressed on its involvement with the Trans Mountain pipeline extension project.
Like the rest of the Big Five banks, TD has committed to achieving net-zero emissions by 2050, but still finances and advises fossil fuel projects.
Masrani said TD is focused on ensuring the path to net-zero is “just and orderly” and that a continued 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 that supply is abruptly cut off.
Wealth inequality and the compensation gap at big organizations between executives and the average worker was brought up as well, specifically a request for the bank to publish its pay ratios.
This comes on the heels of TD announcing in an internal memo Wednesday a 3% pay raise 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 the anti-Covid mandate protests in Ottawa. More than 200 bank accounts were frozen at that time.
Masrani explained that TD follows the rules that apply to Canada’s financial industry and that the bank did just that during this period.
The annual shareholder meeting was held in person and could be viewed via live webcast.