Canada opposed to G20 efforts on global bank tax

Fri Feb 19, 2010 2:50pm EST
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By Louise Egan

OTTAWA (Reuters) - Canada will oppose efforts to create a global bank tax to force financial firms to pay for government intervention, a senior government official said on Friday, exposing a major split among G20 leaders ahead of a June summit.

British Prime Minister Gordon Brown said earlier this month he expected the G20 to agree on some form of global bank levy this year.

In response, the Canadian official said the Conservative government in Ottawa wanted to make clear there was no consensus within the Group of 20 industrialized and emerging powers on such a proposal.

"We're not opposed to countries imposing taxes or a levy domestically, we will not allow it to be imposed on Canada," the official said, speaking on condition of anonymity.

"Our position is clear. We need better regulations, not new taxes, to ensure we don't repeat the global financial crisis," he said.

Finance ministers from the G7 wealthy nations agreed on February 6 to take a closer look at various proposals for making banks cover the cost of bailouts, past and future.

The details are sketchy and ideas range from a tax on bank's balance sheets, proposed by U.S. President Barack Obama, to a so-called Tobin tax on financial transactions, which was among the proposals put forth by Brown at the G20 summit in Pittsburgh last year but which has not gained traction in Washington.

It was not immediately clear whether Canada might look more favorably on certain options. An internal memo sent to Conservative legislators, obtained by Reuters, appeared to focus on the Tobin tax.   Continued...

<p>Skyscrapers loom over a flagpole carrying the Canadian flag in the financial district in Toronto in this March 11, 2009 file photo. REUTERS/Mark Blinch</p>