MEDIA RELEASE: Dismissal of CRA-Cameco tax case illustrates need for federal action
For immediate release: February 18, 2021
OTTAWA – The Supreme Court of Canada’s dismissal of a multi-billion-dollar tax case involving mining giant Cameco underlines that the federal government must act without delay to strengthen rules around multinational tax avoidance.
“Ottawa’s weak corporate tax laws make it extremely challenging and costly to hold powerful multinationals accountable. Without reforming rules around profit-shifting and tax havens, corporations will continue costing Canadians billions in lost revenues that could be used to help pay for the pandemic and recovery,” said Toby Sanger, director of Canadians for Tax Fairness.
“This is a very important precedent-setting case over the use of transfer pricing and ‘arm’s length’ subsidiaries that goes to the heart of how many large multinational corporations avoid taxes. The Supreme Court’s dismissal of this case is a clear message to the federal government that they must reform laws to prevent this type of abuse,” said Sanger.
C4TF, together with Saskatchewan Citizens for Tax Fairness, has long campaigned for Cameco to pay its fair share. For years, Cameco has shifted billions in profits to a tiny trading subsidiary in Switzerland while declaring little or no profits in Canada, and paying little or no corporate income tax. The Canada Revenue Agency reassessed Cameco for $2 billion in unpaid taxes and penalties, but lost at court successively before the Supreme Court dismissed the CRA’s appeal request.
“As Christine Lagarde, former head of the International Monetary Fund (IMF) stated, the ease with which multinationals seem able to avoid tax demonstrates that the current international corporate tax architecture is fundamentally out of date. While discussions are underway through the OECD to strengthen global tax rules, there’s no reason Canada can’t introduce significant reforms on its own,” Sanger said.
C4TF is urging the federal government to stop multinational tax dodging by supporting and implementing reforms to
- Apply an economic substance test to transactions in the income tax act, as proposed in Bill C-621
- Treat multinational enterprises as unitary entities for tax purposes
- Establish a global minimum corporate tax rate
Apportion the profits of multinational corporations between countries based on real economic factors
Erika Beauchesne | Communications Coordinator | Canadians for Tax Fairness
email@example.com | 613-315-8679
Canadians for Tax Fairness is a non-profit organization that advocates for fair and progressive taxes to reduce inequality, fund public services and strengthen the economy.