Finance ministers of the G20 are unlikely to force Canada and other countries that object to a “Robin Hood” bank tax notes a G20 official.
Finance Minister Jim Flaherty had seemed to be heading for a clash with people among the G20 group of developed and emerging economies over the tax.
We have Britain, France and Germany; three countries whose financial institutions were hit the hardest in the 2008 economic meltdown have brought about a bank levy. Flaherty however stood out among the G20 finance ministers as a vocal opponent of such a tax.
Canadian banks he argued, fared relatively well in the global crisis, and should not be punished for their performance.
With this issue nearing its end, it is good news for Prime Minister Stephen Harper because it takes the potentially divisive issue of a universal bank tax away from the G20 summit he will be hosting in Toronto in June.
Proponents of a bank tax expect to see countries use it to build up reserve funds that could be used to bail out financial institutions in the event of another economic collapse, which would allow tax payers not be responsible to keep banks from falling.
It is unnecessary in Canada because we saw the banks go through the recession without any collapses as seen in other countries.