The question of whether or not to implement a global bank tax was up for debate between the G20 finance ministers this weekend. Jim Flaherty, Canada’s Finance Minister, strongly represented the opposing side as he spoke out against the bank tax. In the opinion of many Canadians, Canada should not be subjected to an additional tax just because other countries’ governments suffered bank failures. If an agreement was not made and a global bank tax was implemented, Canadians would be punished even after our banks managed to stay afloat during the financial crisis and recession. Ultimately, the G20 members decided to allow countries to deal with the bail out issue however they desire.
In a recent article, CTV News writes that the United States and Europe are “free to move ahead with the tax but other countries [are allowed] to regulate the banking sector as they see fit.” After the G20 meeting in Toronto, it was clear that the majority of member countries, including Japan and Australia, did not support the global tax. Luckily, this global bank tax is avoidable for Canada since the “requirement for banks to pay back government aid is limited to countries that bailed out [their] banking sector.”