Canada is being marketed to transnational tax-dodgers and criminals as a great place to incorporate shell companies for tax avoidance schemes, according to a new Report: “Snow-washing, Inc: How Canada is marketed abroad as a secrecy jurisdiction,” published today by the End Snow-Washing Coalition (comprised of Canadians for Tax Fairness , Transparency International Canada and Publish What You Pay Canada ).
Russian ads, for example, suggest using Canada’s positive global image to “use more complex structures” and “completely legally optimize taxes,” the report shows.
“Tax dodgers, including Russian oligarchs linked to Vladimir Putin, know that Canada is actually weak on financial crime, and our financial transparency laws haven’t kept pace with changes in global finance,” said Dr. DT Cochrane, economist with Canadians for Tax Fairness.
“These schemes have no economic benefit to Canada, and our upstanding reputation is simply being used to deprive other countries of their own tax revenue,” Dr. Cochrane added.
Canadian entities are attractive as shell companies, the report explains, because:
- Private companies can be owned anonymously.
- They can be set up and run from abroad with no concrete ties to Canada.
- There is no oversight, such as requirements to file financial reports or tax declarations, or even submit ID, and none of the information disclosed is independently verified.
The report calls for fast-tracking of Canada’s proposed beneficial ownership registry, scheduled for 2025, and for quickly establishing provincial ownership registries, since most companies are registered at the provincial level.
“If our federal and provincial governments cooperate and move fast on beneficial ownership registries, we can figure out who these shell-company owners really are, and stop tax-dodgers, oligarchs and crooks from using Canada’s good reputation to steal and break the law,” said Dr. Cochrane.