VANCOUVER – The offshore tax haven practices by the owners of Larco Investments is the latest example of why the federal government needs to get a grip on the burgeoning offshore tax haven industry.
Larco is one of Canada’s largest real estate developers. And as a result of a controversial sale-leaseback deal made with the federal government in 2007 they own multiple buildings that used to belong to Canadians. Now several government departments, including the Canada Revenue Agency pay millions of dollars in rent to Larco.
We joined our partners at Unite Here as they released a report Hide and Seek: How a Government Partner Uses Tax Havens to Avoid Canadian Taxes. It details how the owners of Larco moved millions of dollars in global revenues offshore between 1999 using the services of the much-investigated HSBC bank. Material for the report became public in the United States during Larco’s application to purchase a Las Vegas casino. It says that while there is no evidence of illegality, Larco is one of a string of corporations that have set up offshore subsidiaries and trusts, which in many cases are used to shift profits to reduce taxes. The report also asks what steps are being taken by the CRA to curb growing use of tax havens by wealthy individuals and corporations.
A wealthy Victoria, B.C.family avoided paying tax on more than $26 million over a span of eight years – by signing up for a tax “product” developed by mega-accounting firm KPMG. The same company that the federal government has hired to help it crack down on government misspending.
“We’re talking about millions of dollars that an accounting firm is pulling in by helping millionaires avoid paying their fair share,” says Dennis Howlett, executive director of Canadians for Tax Fairness. "KPMG sales agents and accountants were referred to as ‘champions’ if they convinced wealthy clients to participate. That’s not the kind of champion the Canadian tax system needs. And it definitely isn't the spirit of the law."
Tax fairness is a key element to a healthy economy and country. Here are some things to watch for in the leaders' debate to gauge what federal parties would do to plug loopholes, shut down tax havens and insure that everyone pays their fair share.
A big thanks to CCPA-BC for co-hosting a screening of The Price We Pay at the Rio Theatre. By all accounts it was a big hit and there was lots of good discussion afterwards. It has inspired people to pay attention to tax issues in the upcoming federal election.
Would your organization or community group like to set up a similar event? The producers of the film have negotiated a special deal for us, so it can be done with minimum cost.
Contact us - we'd love to help. Together, we can change this.
When the multi-billion Universal Child Care program was introduced earlier this year, many observers said it was designed as a pre-election goody than a serious attempt to help parents address the real costs of child care. This week Minister of Employment and Social Development proved it beyond a shadow of a doubt.
"One more sleep till Christmas in July for Moms and Dads!" tweeted Pierre Poilievere. Yes, that's an actual tweet from a cabinet minister.
As the world grapples to find the cash to end poverty and battle climate change a proposal to set up an inclusive United Nations intergovernmental global tax body that could reform tax policies has been rejected. The disappointing move happened in Addis Ababa where the Third International Conference on Financing for Development (FfD) took place.Representatives from the Canadian government have been saying for months that they would reject changing the status quo.
Establishing such a political body on tax within the UN was seen as an effective way to ensure developing countries could increase domestic resource mobilization through fairer international tax policies. It was also seen as a way to fight back against the damaging tax practices employed by multinationals. Tax avoidance by big companies -- who employ accounting tricks to shift profits into countries with secretive tax regimes is particularly hard on African countries. Illicit money flows and tax evasion costs Africa between $30-$60 billion in revenue every year. Africa loses more money through these practices than it gets in international aid.
Vancouver-based Silver Wheaton owes at least $200 million in taxes. A Canada Revenue Agency investigation reveals that the resource company set up a business model to avoid paying Canadian taxes. And the company tells reporters that it isn't doing anything different than hundreds of other companies in the industry. Here's hoping the CRA follows up.