Toronto – October 25, 2017 – When governments look for some convenient cover for their desires to cut public services and slash government spending, they often turn to their friends at KPMG. When wealthy Canadians look to avoid paying taxes, they call KPMG.
KPMG is one of the biggest accounting giants in the world and is often the recipient of large government contacts. An investigative report by the CBC had revealed that starting in 1999, KPMG had developed a scheme that allowed wealthy Canadians the ability to dodge taxes by setting up tax havens on the Isle of Man. It wasn’t until 2012 that CRA auditors detected the scheme, which had deprived the federal treasury of tens of millions of taxes. Unfortunately, in 2015 the CRA cut a secret deal that granted amnesty to the wealthy KPMG clients caught using the tax avoidance scheme and no charges or penalties were sought against KPMG. In the USA, KPMG ended up having to pay fines over half a billion dollars for their role in the Isle of Man scheme. Despite being caught in this scheme to help wealthy Canadians to avoid paying taxes, KPMG still continues to receive federal government contracts to the tune of almost $9 million in 2016.
The federal government is not the only ones to continue to use KPMG. The Manitoba Conservative government enlisted the services of KPMG to do a fiscal performance review (government-speak for finding savings), and a review on health care sustainability. Manitoba taxpayers paid a combined $1.49 million to KPMG. Premier Brian Pallister said the results of the review would be made public, but it remained under wraps.
Now that the results of the report are coming out it looks like it was nothing more than away to provide the government a convenient cover for their desire to make drastic cuts to public services while not taking responsibility for the cuts.
Based on the reviews by KPMG, the government is now planning on eliminating 1,200 civil service jobs despite the damage that eliminating these good jobs would inflicts on the economy. When it comes to post-secondary education, KPMG recommended freezing operating grants, raising tuition, getting rid of tuition tax rebates and freezing salaries of academic professionals. The KPMG review also recommended the government should get out of the business of public housing in favour of more reliance on the private sector. The KPMG report also recommended that the government could immediately cut more than $20 million in education funding and the Education Minister is now moving on those recommendations.
If you are wealthy and looking for ways to dodge taxes, who are you going to call? If you’re a government looking to cut public services and eliminate jobs, who are you going to call? Call KPMG.