Assets officially held by Canadian corporations in the top ten tax havens reached $199 billion dollars last year. This is up from $187 billion in 2013. It is a stark and expensive reminder that Canadian corporations are continuing to shelter funds offshore while the government does little to curb the practice. Prime destinations for the money are Barbados ($71B) and Cayman Islands ($36B) – two notorious tax havens that have been a consistent destination for Canadians seeking to avoid paying taxes. In the one year period between 2013-2014, Canadians funnelled $8B to those two havens alone.
More than half a billion dollars was cut from the CRA budget during a two year period in 2012-2013. In Budget 2015, the Finance Minister is proposing to return only $16 million a year over the next five years.
“It is good that Mr. Oliver has put money back into the CRA," says Tax Fairness' Dennis Howlett." But this doesn’t replace damage done over the past several years."These major cuts to CRA staff and lack of focus on the biggest tax cheats has resulted in a record high $178Billion of Canadian money in offshore tax havens. Much of that money remains untaxed.
Is the government serious about tackling offshore tax evaders? You decide.
Tax evasion convictions in Canada have dropped by more than half since 2009. The figures show that in 2010, 216 were found guilty. Three years later, in 2013, that number dropped to 98.
Do these numbers mean that there are fewer tax cheats? Or could it mean that widespread cuts to both the CRA and the Department of Justice have hobbled efforts to crack down on Canadians who try to play the system?
When did federal budgets and economic policy stop being about vision and stewardship and turn into a free for all about who “wins” and who “loses”? And since when is it good leadership to leave it for our grandkids to clean up the mess we make in the name of balancing a budget?
It is no surprise that taxpayers feel the system is stacked against them. Over the years, leaders of all political stripes have used tax fairness as a slogan and not a principle. Will Budget 2015 be any different? Not likely. That's a shame. Because while hard-working Canadians are the engine that drives the country, smart tax policy is the fuel that keeps it going.
May Hen is currently a research associate at the Centre for Policy Research at Simon Fraser University. But in her previous work life she was one of Canada's 11,512 tax collectors at the Canada Revenue Agency. As tax our tax filing deadline and the Federal Budget approach it got her to thinking about how our tax system should be serving Canadians.