New taxes on banks and life insurers will generate $5.3 billion over five years: PBO

Parliament Hill in Ottawa, Ontario,Canada is seen August 11, 2016.

The parliamentary budget officer estimates proposed new federal taxes on some financial institutions could generate $5.3 billion over the next five years.

Two new PBO reports calculate the expected revenues from the Canada Recovery Dividend and a proposed permanent increase to corporate taxes on banks and life insurance groups.

The dividend is a one-time 15 per cent windfall tax on banks and life insurers profits made during the pandemic and the PBO says it will generate $3 billion.

Finance Minister Chrystia Freeland is also proposing to hike the corporate tax rate on bank and insurance profits over $100 million.

The PBO says increasing that rate from 15 per cent to 16 .5 per cent would generate $2.3 billion over the next five years.

The federal budget published last April predicted the two measures would raise more than $6 billion.