Offshore bank gets up to $840k in payroll rebate
It’s probably not the best time in the province to announce a payroll rebate to a major offshore bank promising to create 50 jobs in Halifax.
Nova Scotia Business Inc. on Tuesday announced a rebate worth a potential $840,000 over six years to the Bank of N.T. Butterfield and Son Ltd. (Butterfield Bank) of Bermuda.
Coming on the heels of a two-year wage freeze for the province’s 75,000 public-sector employees, it was too much for the president of the Nova Scotia Federation of Labour.
“First of all, they are potential jobs, and while we applaud all jobs created in this province, this one comes with a huge price tag to taxpayers for a corporation which can easily to afford to create these jobs here,” said Danny Cavanagh.
“At the same time (the government is) starting to attack their own employees, they continue to do corporate handouts.”
Mark Johnson, vice-president of communications for Butterfield Group, said the Halifax operation employs five accounting experts and will gradually increase the number of employees.
“They’ll be doing financial reporting and analysis, support for the world-wide operations of the group,” Johnson said.
Aside from Bermuda, Butterfield Group has operations in Switzerland, Guernsey, U.K., the Cayman Islands and the Bahamas.
The company provides personal and business asset and wealth management, and for many investors can operate as an offshore account.
Johnson said Butterfield Group does not have numbered accounts and there is nothing nefarious about the well-respected company.
“In order to open an account, you need residential or business ties to the island,” Johnson said.
The bank’s relationship with Halifax goes back over 150 years, when it acted as an agent for Nova Scotia banks in Bermuda.
In addition, Halifax and Bermuda are in the same time zone.
In a news release, Nova Scotia Business Inc. estimated the company would spend up to $10.5 million on salaries, which is based on the maximum growth forecast of the six-year payroll rebate agreement.
Moreover, the new employees would pay provincial personal income taxes of about $1.1 million.
The bank would get a smaller rebate if it creates fewer than 50 new jobs.
Butterfield Group used to operate Butterfield Fulcrum in Halifax.
It operated as a hedge fund and private equity and real estate funds; it was acquired by Mitsubishi UFJ Trust and Banking Corp. of Japan.