What do Barbados, the Cayman Islands and Luxembourg have in common?
Aside from being unidentifiable on a map for most, they together hold around $124 billion of Canadian money as a shelter from taxes.
While the strategic/shady stashing money in offshore tax havens is technically legal, the majority of Canadians want to see such money maneuvering outlawed.
According to a recent opinion poll by Environics, 87 per cent of Canadians say they would like to see criminal penalties for individuals and corporations who use tax havens outside of Canada. Two-thirds of respondents strongly support legislative action to ban the practice. It’s estimated that tax havens shield around $15 billion a year that would be collected by the federal government.
Last year’s Panama Papers leak revealed how everything from university endowments and ticket scalper activity were sheltered by tax havens. The documents also contained the names of dozens of prominent Canadians involved in illegal tax evasion schemes.
Far more concerning, however, is legal tax avoidance on the part of corporations. According to the Toronto Star, corporations use “Canada’s world-leading network of tax treaties and tax information exchange agreements (TIEAs) has made it very easy to move billions of dollars in and out of the country, tax-free.” It is precisely this practice that Canadians wholeheartedly support banning.
“This corporate tax dodging is quite outrageous. That’s why we’re seeing such strong opposition,” said Smith.
“Corporations use tax havens to dodge $15 billion a year in taxes. This is public money that’s sorely needed for things like child care, the housing crisis, actually delivering clean water to First Nations reserves.” said Brittany Smith, whose organization, Leadnow, joint-commissioned the poll.
While the Canadian government has promised other G8 nations to crack down on Canadians’ rampant use of tax havens, little has been done to fulfill that commitment.
With three former prime ministers named in the Panama Papers, as well as the Liberal Party’s chief fundraiser, Stephen Bronfman, involvement in a $60-million offshore trust fund, it may come as no surprise that political action has been slow to non-existent.