The growing use of tax havens is costing Canadians an estimated $7.8 billion annually, the executive director of Canadians for Tax Fairness has told a Parliamentary committee studying the issue.
“Tax haven use is at an all-time high in Canada,” C4TF’s Dennis Howlett said in his brief to the House of Commons Finance Committee.
“The Canadian banking and finance industry is clearly choosing to park money in the Cayman Islands and Barbados over what’s good for Canada. Banks are one of the biggest users of tax havens in the country. Using a haven may be legal but it compromises Canada’s ability to provide health, education and infrastructure.”
He told members that Canada is not keeping up with other G8 members in its efforts to police havens.
Cayman Islands, Barbados and other jurisdictions sheltered $160 billion in Canadian investment money in 2011. These havens offer little or no taxation and a complicated, if not totally secretive, reporting system. Offshore tax schemes have become so blatant that a single five-
storey office building in the Cayman Islands is “head office” to 18.000 companies. Howlett urged
that the Canada Revenue Agency increase its capacity to investigate aggressive international tax schemes.
“The system is lopsided,” said Howlett. “Multi-nationals using these havens have an unfair advantage over the rest of us – including small and medium-sized business. How is that good for Canada?
” Richard Murphy, a British accountant and member of the Tax Justice Network also delivered a brief recommending that Canada take a more active stance in dealing with havens.