Luxembourg, Bermuda, Barbados head list of top 12 tax havens for Canadian corporations
For Immediate Release – July 22, 2020
OTTAWA – The total amount of Canadian corporate assets in the top 12 tax havens soared to a new high of $381 billion in 2019, according to a report released today by Canadians for Tax Fairness.
Analysis of the latest Statistics Canada foreign direct investment figures reveals that Canadian corporations last year increased the amount of assets they report in the top 12 tax havens by 135% in the past decade and up $10 billion from 2018.
“What’s even more disturbing is that these are just the numbers that corporations are reporting -- the tip of the iceberg. The extent of offshore corporate tax dodging runs much deeper,” said Toby Sanger, economist and director of Canadians for Tax Fairness. “Our government does a good job when it comes to talking about cracking down on tax havens, but the numbers tell a different story. Canadian companies are still parking hundreds of billions –more than the size of the federal deficit—in offshore accounts.”
Luxembourg was the top tax haven of choice for Canadian corporations with $101 billion, followed by Bermuda ($64 billion), and Barbados ($50 billion). New to the top list was Malta, where ICIJ journalist Daphne Galizia was murdered in 2017 after reporting on the Panama Papers. Canadian corporations parked $4.3 billion in that tax haven – a 52% increase from 2018.
Worldwide, governments lose at least US$500 billion in revenues to tax havens each year. Canada loses at least $10 billion, although a 2019 estimate by the Parliamentary Budget Office estimated the amount could be as high as $25 billion.
“Tax havens rob the public of billions in revenues while helping large corporations and the rich to get richer. The result is a widening wealth gap and increasing corporate concentration, which hurts the economy and all Canadians,” Sanger said.
The study recommends several policy reforms such as ending double non-taxation agreements with tax havens, requiring large corporations to publicly report taxes paid in each country, and treating MNEs as single entities for tax purposes so they can’t avoid taxes through subsidiaries.
“Large Canadian corporations have profited immensely from taxes that pay for an educated workforce, infrastructure to carry goods to market, and investments to grow their businesses. As Canada combats one of the greatest health and economic challenges of the century, it’s time that these large corporations pay their fair share of taxes too,” Sanger said.
The report is available at taxfairness.ca
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