A new report commissioned by a group of MPs in the European Parliament shows that the Royal Bank of Canada directed the creation of 1199 offshore companies in tax havens including Bahamas, Switzerland, Hong Kong, Jersey, Guernsey, and the Isle of Man. It also shows RBC - under a different logo - was associated with the creation of 90 more offshore companies in those same low or no-tax jurisdictions.
OTTAWA - Documents that show that Finance Minister Bill Morneau knew that most of the benefit of the stock option loophole fell to a small group of very wealthy CEOs and that he received “urgent” messages from business lobbyists days before the federal budget, raises serious questions about the influence of Bay Street within the Liberal government.
“The Prime Minister campaigned on a promise to get rid of the stock option loophole which has put billions back into the pockets of wealthy CEOs including bank presidents, real estate moguls and heads of powerful multinationals,” says Dennis Howlett, president of Canadians for Tax Fairness. “Those guys send their lobbyists to talk to the Finance Minister and – just like that - their commitment disappeared.”
Earlier this month the Toronto Star published an editorial calling on Justin Trudeau to make tax fairness a priority for 2017. The editors argue that fixing the tax system would help restore confidence in the leadership and vision of the government. Good politics. But let's talk money for a moment.
Canada would have billions in increased revenues each year if the government gets serious about tackling tax havens and plugging loopholes like the stock option deduction and a host of others that have us hemmoraging money. Right now that money goes straight into the pockets of very wealthy individuals and corporations who are playing the system. Why is this even an option for our political class?
A new report out by Oxfam names Bermuda as the world's worst tax haven. Here in Canada, wealthy individuals and corporations have $22.4Billion parked there. Read on to find out which tax haven Canadians use most.
Canada's five worst tax loopholes provide 99% of their benefit to the richest half of Canadians and cost the federal government $10.4 billion in 2011. That's the conclusion of an in-depth study of tax expenditures published by the Canadian Centre for Policy Alternatives.
CCPA Senior Economist David Macdonald examined who benefitted from a list of 64 personal income tax expenditures. They ranged widely from the Guaranteed Income Supplement to the Stock Option deduction. He found that 59 of them provide more benefit to the top 50% of income earners than the bottom half, with the largest share going to the richest 10%. Using data from 2011 he found that the cost of those 59 expenditures totalled $100.5 billion.
The Auditor General has exposed serious efficiency problems in how the Canada Revenue Agency deals with regular taxpayers. And those problems point straight to a series of cuts over the past decade that have impacted how the CRA serves Canadians and collects revenues.
According to the latest AG report, the CRA takes too long to respond to objections to its income tax decisions – an average of 263 days for individual income tax objections registered between 2011 and 2016 – and uses incomplete and inaccurate methods to evaluate how well objections are handled. AG Michael Ferguson says 65 per cent of the objections he reviewed were eventually resolved either fully or partially in favour of the taxpayer. Those findings suggest more can be done ahead of time to resolve issues prior to objections being filed.
The international tax dodging industry is profiting from anemic international co-operation on tax rules and standards,” says Canadians for Tax Fairness executive director Dennis Howlett. The Panama Papers, Luxembourg Leaks, and other global schemes have exposed large-scale tax evasion and avoidance. Individual governments can make some changes to stop it – but just like fighting international terrorism or environmental degradation – countries are more effective when they work together.