Tax havens make the rich richer and the poor poorer and diminish the resources available to run our economy and society. Governments need to act together and much more aggressively to stop the race to the bottom. Enforcement is not enough; the laws need to be changed. There are clear changes the Canadian government can make to stop corporate mis-use of tax havens and set a floor on tax payments by large Canadian corporations.
In July the federal government announced consultations on proposed changes to tax loopholes that allow some wealthy Canadians to reduce their taxes using private corporations. The changes would be limited to: ending dividend sprinkling to family members who don't work for the business, restricting passive corporate investments that compete with job creating investments and reduce tax revenues and limiting the ability to use capital gains to reduce income tax. The proposals have been getting a lot of attention in the media. Some legitimate issues are being raised, but there is a lot of mis-information and also blatant falsehoods that are being circulated by opponents to these tax reforms.
Canada has the lowest corporate tax rate in the G7. But that makes no difference to many corporations. They send billions to offshore tax havens every year to avoid paying their share. This fact sheet gives you the low-down. And it isn't pretty.
If Canada’s corporate tax rate was the same today as it was in 2000, we’d be collecting an extra $20 billion a year in taxes—enough to fund national child care, free university tuition, or children’s dental care. Instead it has been cut in half since 2000.