Scotiabank CEO criticizes government bank tax, misses AGM due to COVID

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FILE PHOTO: A Bank of Nova Scotia logo is seen outside of a branch in Ottawa

By Nichola Saminather

TORONTO – Bank of Nova Scotia Chief Executive Officer Brian Porter criticised the Canadian government’s proposed bank tax in prepared remarks to shareholders on Tuesday, calling them a “knee-jerk reaction that sends the wrong message to the global investment community.”

Porter said the proposed tax on banks’ profits would ultimately affect shareholders, including pensioners and retail investors.

Canada’s third-largest lender emailed Porter’s speech to media after a positive COVID-19 test kept him from attending the meeting. Chief Financial Officer Raj Viswanathan read an abridged version during the bank’s first in-person shareholders’ meeting since the pandemic.

The Canadian Liberal party’s plan to raise corporate taxes on the country’s most profitable banks and insurers, announced as a campaign pledge in September, became more likely after Prime Minister Justin Trudeau signed a surprise deal with the left-leaning opposition New Democratic Party last month.

Most banks have been critical of Trudeau’s plan to raise additional taxes.

Porter also criticized Canada’s lagging private sector investments in research and development, which “are where they were 20 years ago,” and productivity challenges that existed even before the COVID-19 pandemic, and to warn that a shortage of workers poses a “serious problem” for the country’s prosperity.

“The key point here is that we need more investment, more innovation, and more skilled labour if we are going to overcome sluggish growth,” Porter added.

He proposed the creation of a federal commission to help address these issues.

Scotiabank’s board chair and CFO said at the meeting that Porter had tested positive for COVID-19, explaining his absence from the event.

“The health and safety of our employees is our top priority, and, as a result Brian is fully isolating,” Viswanathan said at the event. “Thankfully he has been triple vaccinated and we expect a full and quick recovery.”

(Reporting By Nichola Saminather; Editing by Chris Reese)

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