One of the disturbing revelations from the Panama Papers is how the law firm at the centre of the tax dodge schemes told clients how easy it is to set up shell companies in Canada.
Because several provinces, including British Columbia, ask for very little information about the owners or their motives for setting up shell companies that exist only on paper. Problem is, more than one international study has shown how impenetrability is a favoured tax dodge tool. It is often the nemesis of revenue agencies like Canada's own CRA.
Canada falls behind other G20 countries when it comes to identifying the beneficiaries of shell companies. The problem is made worse by weak provincial oversight.
"Canada has a lot of work to do to comply with the international standards on transparency of beneficial ownership,'' says Dennis Howlett.executive director of Canadians for Tax Fairness. "What complicates the Canadian situation is that you can register a company federally, or in any province or territory and some provinces and territories fall short.''
Just back from a G20 meeting where the tax haven issue dominated, Finance Minister Bill Morneau has promised to get the conversation rolling with his provincial counterparts. But first he should take a hard look at this report card by Transparency International. It gives Canada poor marks on complying to G20 principles.
And for a good overview,here is Tax Fairness' Dennis Howlett in conversation with CTV News Network.
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