Canada Targets Banks for Billions With Dividend Tax Change (3)

Finance Minister Chrystia Freeland is planning to raise billions of dollars from banks and insurance companies by changing the tax rules for dividends they get from Canadian firms.

In a measure that officials billed as closing a loophole, Canada will begin treating dividends received by financial institutions from holding domestic shares as business income. It’s expected to bring in C$3.2 billion ($2.3 billion) over five years, starting in 2024.

Banks and other financial firms have used complex tax planning for years to effectively exclude these dividends from their income, lowering their overall tax burden. The new tax will apply ...