July 3 2023
Brookfield, the fifth largest company in Canada, is facing calls to come clean about tax dodging.
Earlier in June, a report from the Centre for International Corporate Tax Accountability and Research (CICTAR) showed how Brookfield moves profits from its operations in different countries through subsidiaries in tax havens to reduce the taxes it has to pay. Then, at the Brookfield AGM, a shareholder proposal from the BC General Employees’ Union (BCGEU/NUPGE) to address tax dodging by Brookfield received a significant level of support.
Secrecy around corporate registrations in Canada makes it hard to figure out what Brookfield is doing here
While the examples in the report on how Brookfield uses subsidiaries in tax havens to avoid paying taxes were from other countries, we can’t assume that the same thing isn’t happening in Canada. The level of secrecy surrounding corporations registered in Canada means that it is far more difficult to find out what companies registered in Canada are up to than what companies registered in many other countries are doing. What we do know is that ownership of at least some Brookfield operations in Canada passes through subsidiaries based in Bermuda, a notorious tax haven.
Governments need to be closing loopholes
While actions like the shareholder proposal from the BCGEU/NUPGE make a huge difference, it should be governments that take the lead on ending tax dodging by corporations. As the CICTAR report suggests, “Brookfield may be testing the legal limits of aggressive tax avoidance.” To deal with that problem, governments need to close the tax loopholes large corporations and the wealthy are using and put more resources into enforcement.