How We Performed

Taxes

The Bank carries on many businesses in many different locations with differing outcomes, resulting in a mix of tax payments and tax recoveries. The Bank continues to pay significant amounts of tax to governments across Canada. Supplementary table 8 on page 49 lists the various taxes the Bank has paid over the past five years.

Note 15 of the Bank’s Consolidated Financial Statements sets out the key tax measurements under generally accepted accounting principles.

The Bank's home jurisdiction, Ontario, has announced that it will be increasing corporate income taxes and stopping the planned elimination of capital taxes. As a result, the expected rate of Canadian taxes in the future will be higher than previously thought although still lower than in 2003. The federal government has promised the phased elimination of its principal capital tax.

In 2003, the write down of some businesses added to the net future tax asset of the Bank. This was in addition to the substantial increase caused by the large sectoral loan provisions recorded in 2002. The effective use of these assets is dependent upon a continued return to ordinary levels of profitability, particularly in the Bank’s U.S. operations. This increase was offset to a significant extent by the usage of a portion of the sectoral provisions against specific loans as well as the release of provisions for both sectoral and general loan losses.