Billions shielded through tax havens, more transparency and resources needed

OTTAWA – Corporations and super-rich Canadians avoid paying billions of dollars in taxes each year because of the Harper government’s lax approach in dealing with tax havens. Today, New Democrat Leader Jack Layton outlined a plan to address tax havens and ensure that hardworking Canadian tax payers don’t have to foot the bill for tax dodgers.

“It’s unacceptable that a few super-rich individuals and corporations are allowed to avoid paying their taxes, unfairly putting a greater share of the tax burden onto honest taxpaying Canadians,” said Layton. “We need greater transparency, improved enforcement and tougher regulations to ensure tax fairness.”

“With billions of lost tax dollars at stake, the Harper government has to come clean on how big this problem really is,” said New Democrat Revenue critic Carol Hughes. “But instead of releasing transparent figures and increasing resources for recovering tax revenue, the Conservatives are actually cutting back on CRA investigators.”

New Democrats pointed out that investing in enhanced enforcement is common sense – for every dollar invested in investigations, more than five dollars is recovered in taxes from wealthy tax cheats.

New Democrats proposed action on tax havens includes:

o Transparency: Identify the current tax losses and assess their impact on federal and provincial treasuries.
o Enforcement: Increase Canada Revenue Agency’s compliance resources to recover more lost revenue.
o Disclosure: Adopt regulations to shift the onus for revealing tax avoidance measures to the filer, as they have done in the U.S.

“To give just one example, Canadians invest around $80 billion in the Cayman Islands, Barbados and Bermuda – many times those countries’ GDP. In fact, direct Canadian investment in these three small island countries is $13 billion more than we invest in the whole United Kingdom,” said Layton. “The evidence of widespread tax avoidance is overwhelming, it’s time for Canada to act and bring this problem under control.”