Editor's Note.. This article was first published in 2013. Since then it is estimated that Cameco's shifting of profits to Switzerland has resulted in $2B in lost revenues for Canada. Imagine what we could be doing with that money. Our colleagues at SumOfUs have collected nearly 35.000 signatures which they will be presenting the Prime Minister soon. Click here to get your name on that petition telling Cameco to "pay up".
Cameco is a multi-billion dollar Canadian company.
They mine Canadian uranium.
They use Canadian-developed technology to dig Canadian uranium out of the Canadian ground and rely on the Canadian transportation system to bring their product to market.
Cameco employs Canadian workers who developed their knowledge and skills in Canadian schools, rely on Canadian hospitals if / when they get sick and rely on the stability and legal protection that Canadian democracy provides.
And if that isn't Canadian enough, Cameco is so Canadian that even former Canadian Deputy Prime Minister Anne McLellan sits on their board of directors!
Funny thing though – like many transnational companies, Cameco has decided that it makes better business sense to outsource their profits offshore – to the notorious tax haven of Zug, Switzerland – than pay their fair share of taxes or reinvest in the country that produced those profits in the first place.
Cameco shifted profits by signing a long-term contract 17 years ago with their tax haven subsidiary to sell their uranium to them at $10 a pound. The price of uranium on the world market has gone up a lot since then - even going up to over $100 a pound. It is about $30 a pound today. Their Swiss subsidiary sold the uranium at the world market price, pocketing most of the profits offshore.
Cameco only pays a 10% corporate tax rate in Zug, as opposed to the 27% they would have paid in Canada. It's a generous deal for Cameco, but the Swiss are well-known for their generosity. In fact, the good people of Zug even allow Cameco to pay them taxes even though the corporation has no material operations to speak of in the city.
Cameco shareholders, which include the former Canadian deputy Prime Minister have been told that there is a “compelling” business reason to be closer to the European market.
But other Canadians remain unconvinced.
The Canada Revenue Agency, for example, has been auditing and investigating Cameco for years. And now the matter is in Tax Court.
Trouble is, tracking down this kind of paper trail costs Canadian taxpayers millions in legal fees. And regular Canadian taxpayers are having to make up the difference in the estimated $850 million in lost tax revenue from Cameco. All the while, Cameco is predicting a banner year for its shareholders.
Read more about this story here.
Think this is a cynical misuse of the tax system? Help Canadians for Tax Fairness make billion dollar resource companies pay their fair share.