This represents approximately 34 per cent of the banks net income after tax. Bank revenues are comprised of interest-based income earned from investments and lending to all types of businesses and individuals and fee income from a variety of services, less interest, paid to depositors. Interest-based income represents 48 per cent of gross revenues and has grown by three per cent over the past year as a result of the growing economy, especially as a result of increased demand for mortgages, which are at some of the lowest rates in 20 years. Fee income represents 52 per cent of gross revenues and is earned by providing a variety of services, such as trading of securities, assisting companies to issue new equity financing and securities commissions and wealth management. Of total revenues, personal service fees for the many payment and deposit services provided by banks, account for only four per cent.
Banks pay higher taxes than other industries.
56 per cent of the financial institutions 1997 increase in profits was paid in tax, while the non-financial corporate sector paid out less than 46 per cent of its increase in profits. The financial sector s tax burden is disproportionate and unsustainable. Canada s banks are taxed at much higher rates than their competitors and other sectors of the economy according to a study conducted by KPMG Chartered Accountants.