Top banker says capital investment doesn’t care about ‘elbows up’

One of Canada’s top bankers is calling on the Liberals to exhibit “more action” when it comes to nation-building projects and removing internal trade barriers.

Source: Rawpixel

One of Canada’s top bankers is calling on the Liberals to exhibit “more action” when it comes to nation-building projects and removing internal trade barriers, saying that capital will “flow to the point of least resistance.”

Bank of Montreal CEO Darryl White said that Ottawa needs a “little less conversation and a little more action” in greenlighting new projects to mitigate the impact of U.S. tariffs, in addition to removing interprovincial trade barriers.

“There was a lot of conversation about this, two, three, five, six months ago. This was the moment we were going to take advantage of this. We were going to get our act together, trim the edges,” said White during a panel discussion at the Toronto Global Forum on Wednesday.

White added that he’s “worried that the air goes out of this balloon” when it comes to trade barriers, national projects and building pipelines.

According to the BMO CEO, Ottawa must “assess and attack tax reform” to become competitive and “attract international capital.”

While Prime Minister Mark Carney’s government has pledged to turn Canada into an “economic superpower” through its natural resource sector, little has been accomplished in the first six months of his tenure.

Currently, the majority of Canadian exports to the U.S. are protected from tariffs under the Canada-United States-Mexico trade agreement. However, the status quo is likely to change after the agreement comes up for renewal next summer.

Meanwhile, White claimed that simply removing interprovincial trade barriers could “overwhelm almost any negative impact” of U.S. tariffs “by itself.”

Regarding tax rates, he said that Canada is “absolutely not” competitive.

White urged the federal government to promptly cut taxes, saying that cancelling the increase to the capital-gains inclusion rate did not go far enough.

“Are we competitive on tax? I know the answer to that is, ‘Absolutely not,’” said White.

He noted Canada could stimulate economic growth by letting businesses write off capital assets sooner and reducing corporate and personal taxes.

White also called on the Carney government to rise to the occasion created by the Trump administration regarding global trade and tariffs.

“We have a moment here in Canada, if we can take advantage of the threat that is going to compromise our economy a little bit and do things that will advantage our economy a lot more than that, while we negotiate the best deal we possibly can - then we have a win-win,” he said.

White said that he’s often told by many international investors that they have become increasingly interested in Canada in light of U.S. tariffs, but “we are fooling ourselves if we think those people are going to get on the field,” under the current tax rates.

“I can be all elbows up and patriotic and all the rest of it, but, at the end of the day, capital is not that sophisticated,” he said. “It’ll flow to the point of least resistance.”