MEDIA RELEASE: Stronger terms needed to keep public dollars from helping tax dodgers
For Immediate Release – May 11, 2020
OTTAWA – Today’s announcement of applying conditions to federal funding for large companies is a step in the right direction, but it also raises more questions.
“We’re pleased to see the government is considering some of the recommendations we’ve called for to deny federal funds for tax dodging corporations and to restrict dividends, share buy-backs, and executive pay for those companies that receive aid. However, the federal government should be doing significantly more. We also need to see more details to determine how much these will actually prevent large companies from profiteering from this pandemic,” said Toby Sanger, executive director of Canadians for Tax Fairness.
After ongoing pressure to follow France, Poland and Denmark in refusing aid to companies that use tax havens, the federal government today committed that corporations convicted of tax evasion will not be eligible for federal funding through its Large Employer Emergency Financing Facility.
However, stronger conditions should apply to all federal funding and not just to this program. Most importantly, we need much greater transparency from the federal government on where their funding is going and from large corporations by publicly disclosing their finances and taxes paid on a country-by-country basis.
“Unfortunately, Canada has a poor record of convicting large companies of tax evasion, thanks to weak regulations, transparency and enforcement. The government will need to be more ambitious by requiring all companies to disclose their international structure and finances and including significant penalties to deter aggressive corporate tax dodging,” Sanger said.
Canadians for Tax Fairness has called for the federal government to deny funds to anonymous businesses, to include anti-corruption and clawback clauses in all its funding contracts, to deny funding to those who abuse tax havens, and to have a prohibition on stock buy-backs, executive bonuses and dividend payouts for at least a year after funding is received.
“To truly make progress, Canada needs to address the root of the problem, by reforming Canadian and international tax laws, introducing stronger punishments for both evaders and enablers, and providing the CRA with the resources it needs to tackle corporate tax dodging,” Sanger concluded.
Communications Coordinator, Canadians for Tax Fairness
Canadians for Tax Fairness is a non-profit organization that advocates for progressive taxes to fund important public services, reduce inequality and strengthen the economy.