The release of the so-called “Paradise Papers” is the latest slap in the face to Canadians who are still smarting over the Bill Morneau controversy.
While the Liberals pushed their tax reform plan by trumpeting the slogan “tax fairness,” revelations of Morneau’s own financial dealings – including failure to disclose his ownership, through a private corporation, of a villa in France and his use of numbered companies, including one in Alberta, to hold investments – smacked of hypocrisy to average Canadians.
Now comes the leak of documents showing that more than 3,000 Canadian individuals and entities have been stashing away money in offshore accounts to reduce their tax burden.
The information revealed in the release of the Paradise Papers, much like the Panama Papers leak last year, shouldn’t really come as much of a surprise to most Canadians. It’s long been known that rich folks and big companies have access to ways to shield as much of their wealth as possible from the taxman. And, done through proper channels, it’s not illegal.
But it still rankles Canadians who are just trying to eke out an average living – and in some case simply survive – to have news paraded before them that everyone from former prime ministers to professional sports teams are taking advantage of opportunities to keep as much of their loot for themselves as possible.
Not that there’s anything wrong with that. Most Canadians would like to keep more of what they earn in their own pockets.
It’s just that average Canadians aren’t in a position to capitalize on opportunities such as offshore tax havens. And when it seems that average Canadians are shouldering an unfair amount of the country’s tax burden because the people with deep pockets are finding ways to reduce the taxes they contribute, it’s understandably irritating to those who feel they’re being shafted.
Based on information from the Paradise Papers, the organization Canadians For Tax Fairness has revised its estimate of the amount of Canadian tax money that is lost through tax havens.
It now says the tax losses are somewhere between $10 billion and $15 billion a year – not an insignificant amount. That’s up from the previous estimate ranging from $5 billion to $8 billion annually.
Dennis Howlett of Canadians For Tax Fairness said in a CBC News story: “It’s big corporations taking advantage of subsidiaries in tax havens to shift their profits and pay a lot lower taxes. . . This is legal, and it should not be legal.”
The Canada Revenue Agency responded to the latest leak by saying it won’t hesitate to investigate the new evidence, but the agency’s hands will be tied if these individuals and companies are simply doing what the system permits them to do.
It’s the system that needs changing – and what are the chances of that happening?
But as long as things remain as they are, there never will be true “tax fairness.”