Canada Revenue Agency rents from serial tax haven user

Help! My landlord is a tax dodger: awkward times at the CRA.

Ottawa (26 May 2016) — Canadians for Tax Fairness says that National Revenue Minister Diane Lebouthillier talked tough when she announced the government's plans to crack down on tax haven users earlier this spring. 

Government departments paid Larco Investments $74.3 million 

“We really want to put the axe into everything that touches tax evasion,” she said, adding, “There are people today, I imagine, who must be nervous.”

Maybe. But it turns out the CRA pays rent to a serial tax haven user for CRA offices in Edmonton, Montreal and Calgary. 

Taxpayer money goes to Larco Investments. The privately held company owned by one of Canada's wealthiest families sends its profits to offshore sites, including the British Virgin Islands, Liechtenstein, Luxembourg and the Island of Jersey.

And the CRA isn't the only federal agency involved. The RCMP, the Courts Administration Service, the Canadian Food Inspection Agency, and Employment and Social Development Canada all fork over money to Larco. This year's bill totals $74.3 million.

Should the Canadian government be using firms that use tax havens?

"You can't make this stuff up," says Dennis Howlett, executive director for Canadians for Tax Fairness. "This is happening right under the government's nose. They should not be doing business with companies who use this kind of aggressive tax dodging. It is an insult to Canadian companies who are paying their share. It is bad fiscal management. And the tax dodgers are laughing all the way to their offshore bank."

Researchers at UniteHere, a Vancouver-based union representing hospitality workers, pored over the #PanamaLeaks database and found that Larco assets and its multitude of companies were handled by Mossack Fonseca and RBC Investment Solutions Ltd (Jersey). As the Globe and Mail reported, RBC has been under fire since the Panama Papers revealed that the bank allegedly registered 378 shell companies through Mossack Fonseca(link is external). 

The researchers have created a website that details the complicated dealings.

The National Union of Public and General Employees (NUPGE) is a strong supporter of Canadians for Tax Fairness.

NUPGE

The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 360,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE

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