A leading lobby group for Canada’s banking sector criticized federal government proposals to impose high taxes on the country’s financial sector, saying the policy could hurt lending, the Globe and Mail reported Tuesday.

Anthony Ostler, CEO of the Canadian Bankers Association (CBA), said the government is “going after the banks.”

“Attacking a sector that is central to supporting growth and the long-term health of the economy is doubly damaging,” Ostler said, according to the report.

The financial sector has had to pay taxes as the federal government looks to increase spending to help low-income Canadians cope with inflation and increase investment in clean technologies to close the competitive gap with the United States.

Last year, the government introduced the Canada Recovery Dividend, a one-time tax on banks and life insurers that are expected to generate more than 3.02 billion Canadian dollars (2.23 billion euros) over five years, according to the Office of the Parliamentary Budget Officer becomes .

In this year’s budget, the government also proposed counting dividends received by financial institutions from Canadian stocks as business income, which could increase their overall tax bill.

“Prior to the introduction of the Canada Recovery Dividend and the additional tax on banks and life insurers (a separate tax measure), the Department of Finance invited Canadians and stakeholders, including these financial institutions, to provide it with their comments on the proposed legislation,” said the Office of the Press Secretary Deputy Prime Minister and Finance Minister.

“You will also be invited to take part in public consultations in the coming months on the additional tax measures announced in this year’s budget,” the spokesperson added.

Analysts have warned that banks could try to ease some of the tax measures by tightening lending standards and reducing headcount, which could increase risks in an uncertain economic climate.

A spokesman for CBA, which represents about 65 banks in Canada, declined further comment. ($1 = 1.3557 Canadian dollars)