Financial Regulatory Forum

Canada to oppose global bank tax – newspaper

By Reuters Staff
February 19, 2010

TORONTO, Feb 19 (Reuters) – Canada will formally oppose international efforts by the world’s major economies to impose a global bank tax as the current government favors lower taxes, Canada’s National Post newspaper reported on Friday.

The report, citing unnamed government sources, said Canada’s move could potentially cause a major split among Group of 20 leaders at a summit in Toronto in June and thwart efforts to impose uniform financial regulations after the recession.

A spokesman for Canada’s finance ministry declined to confirm details of the report.

The newspaper, citing unnamed sources with knowledge of the plan, said senior Canadian officials would soon make a public response following recent public musings on the issue by British Prime Minister Gordon Brown.

Brown put forward the idea of a global tax on financial transactions at a G20 meeting last year and recently said he was working internationally to agree on a global bank levy.

The newspaper quoted one unnamed source as saying Canada will oppose any such tax, adding it would run counter to the Conservative government’s reputation for lower taxes.

“The government wants it known that a deal on a bank tax isn’t going to happen,” it quoted the source as saying.

Canada is co-head of the G20 this year with South Korea, and the report said Prime Minister Stephen Harper and Finance Minister Jim Flaherty want to use their influence as host of the next G20 meeting to kill the proposal.

Recently in Davos, Switzerland, Harper distanced himself from hard-liners in the bank reform debate, warning against excessive regulation of the financial sector.

“Canada … believes that financial sector regulation must have the right purposes and must not be excessive … Canada will not go down the path of excessive, arbitrary or punitive regulation of its financial sector,” Harper said.

To read the story click on: http://www.financialpost.com/todays-paper/story.html?id=2585481

(Reporting by Jeffrey Hodgson; Editing by James Dalgleish) ((jeffrey.hodgson@thomsonreuters.com; Tel: 416 941 8099; Reuters Messaging: jeffrey.hodgson.reuters.com@reuters.net))

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