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"Tax haven use in Canada has been rampant precisely because our lawmakers were looking the other way. They need to show the public that they have turned that around." — Dennis Howlett, Executive Director of Canadians for Tax Fairness
Ottawa (13 April 2018) — Two years after the Panama Papers leak, Canadians for Tax Fairness is looking at how little Canada has done, compared to other countries, with the massive leaks from offshore tax havens.
In April 2016, the International Consortium of Investigative Journalists released a leaked cache of 11.5 million records related to offshore holdings of individuals and companies, including offshore holdings ofa number of world leaders. The data came from Mossack Fonseca, a law firm based in Panama.
Canada lags behind other countries in investigatng of tax cheating
The Panama Papers leak exposed nearly 100 Canadian offshore specialists that worked with Mossack Fonseca to set up more than 2,100 companies in tax havens. Despite this rich data, Canada is lagging behind other countries in its investigations and convictions of those who are tax cheats.
While the Liberal government has implemented some measures to go after tax havens, its efforts were slow to start and are still not enough to stem the tide. A year after the leaks, the Canada Revenue Agency (CRA) announced that the agency was auditing 122 Canadians who appear in the database. And the agency had launched dozens of criminal investigations. And further, the CRA announced that it had executed 3 search warrants on February 14, 2018.
“These are the kind of announcements seen in the UK and Australia 6 months after the leaks, not a year or two,” says Dennis Howlett, Executive Director of Canadians for Tax Fairness. "Tax haven use in Canada has been rampant precisely because our lawmakers were looking the other way. They need to show the public that they have turned that around."
Over $500M recovered by other countries from tax cheats
Other countries were more aggressive in cracking down. Both Australia and the UK had task forces that hit the ground running with search warrants and investigations. Globally, such efforts have resulted in over $500 million being recovered by tax authorities.
“The CRA has been quite circumspect about its investigations,” adds Howlett, “Canadians need to see that there are swift and substantial consequences for individuals and companies that are shirking their tax responsibilities, or Canadians will lose faith in the system.”