Shut down the tax havens and close the loopholes
Toronto – May 12, 2016 – The release of the Panama Papers and the opening to the public of a searchable database to look up the names and companies in the Panama Papers has further exposed the loopholes and shams that allow the wealthiest to avoid paying their fare share in taxes.
There are 625 Canadian names that appear in the released documents. Ottawa’s official figures show over $200 billion in Canadian wealth currently sits offshore and out of reach of the Canada Revenue Agency (CRA) and data from Statistics Canada estimate that the federal and provincial governments lose $7.8 billion a year in tax revenues due to tax havens.
Federal Revenue Minister Diane Lebouthillier has directed the CRA to use the documents to launch audits and go after possible tax cheats stating “if we can lay criminal charges we will lay criminal charges”. But the governments and the CRA’s track record on tax avoidance leaves one dubious of ever seeing any actual criminal charges. Remember, it was only recently that the CRA made a secret out -of-court amnesty for accounting firm KPMG’s offshore tax sham that helped wealthy clients avoid Canadian taxes by moving their wealth to offshore tax havens. Fifteen wealthy KPMG clients will avoid any penalties, fines or criminal investigation.
The other problem with the minister’s statement of possible criminal charges is that many of these avoidance schemes are not illegal because they take advantage of regulatory loopholes sometimes created through things like free trade deals.
In 2012 almost all the current Conservative MP’s and the Liberal MP’s voted in favour of ratifying a free trade deal with Panama that eliminated tariffs on 99% of trade between the two countries including financial services – despite warnings from the NDP and others about Panama’s reputation as a tax haven.
Our governments have been enablers of tax avoidance. Remember Harper’s efforts to crack down on charities for supposed political activity at the same time cutting staff at the CRA who investigate tax avoidance? There is a sprawling industry of tax avoidance professionals – lawyers, financial planners, bankers and accountants – making a living advising the rich how and where to find places to avoid their tax obligations in Canada.
Setting up offshore companies may not be illegal but is clearly not fair. It is yet another advantage conferred upon the already wealthy and over-privileged. So the CRA should use the Panama Papers and accompanying documents to go after possible tax cheats. It is also time for our government and governments across the world to shut down the tax havens and close the loopholes so the rich and overpriviledged pay their fair share.
