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“It’s time for the Canadian government to review and renegotiate tax treaties with havens that enable this behaviour.” — Dennis Howlett, executive director of Canadians for Tax Fairness
Ottawa (18 May 2017) — Canadians for Tax Fairness is reporting that Canadian businesses that shift money offshore love Barbados.
Canadians for Tax Fairness calculated that $6 billion was shifted to the Barbados in just 1 year, based on 2016 Statistics Canada data. That brings the total to $68.3 billion in Canadian money – mostly untaxed – sitting in that one Caribbean country. While those funds are officially described as "investment abroad." that’s a lot of “investment” in an island nation with a population of 285,000.
While the amount corporations shift offshore is down slightly, it's still in the billions
Canadians for Tax Fairness has been tracking the amount of money shifted offshore for years. And they discovered that 2016 saw a substantial dip in the total amount shifted offshore. A major part of that reduction comes from Ireland which recorded $10 billion of Canadian investment funds leaving the country in 2016. That’s a story they continue to probe. But the bottom line is that billions are leaving Canada each year headed for tax havens like Barbados, Cayman Islands, Hong Kong and the British Virgin Islands.
Tax treaty makes tax dodging easy
Barbados continues to be the tax haven of choice for Canadian companies. Some well-known Canadian companies have set up subsidiaries in Barbados – there’s nothing illegal about that. The Canada-Barbados Tax Treaty contains no language that deters a company from setting up for the express purpose of avoiding tax. So Petro-Canada, Gildan, GoldCorp and others take advantage of the tax rules in a country that has been cited as a tax haven by the IMF, the EU and the Financial Secrecy Index .
“It’s time for the Canadian government to review and renegotiate tax treaties with havens that enable this behaviour,” says Dennis Howlett, executive director of Canadians for Tax Fairness. “It is unethical for multinationals to employ practices that are explicitly created to avoid their paying their fair share of taxes while they give CEOs and top management exorbitant raises.”
There is at least $261 billion of Canadian corporate money sitting in the top 10 tax havens.