“The Conservative government isn't just hugging thugs. Its taking them out for dinner and paying for their drinks,” said James Clancy, NUPGE National President.
Ottawa (15 Nov. 2013) - While the federal Conservative government talks tough on crime, the Financial Secrecy Index released last week paints a very different picture.
Financial Secrecy Index places Canada on its top 20 list
Of 82 countries ranked, Canada was the 17th worst, reported the Tax Justice Network. Canadian laws allow companies to avoid paying taxes in Canada by declaring international income in places where taxes are close to zero and bringing the money back to Canada as dividends. What the Secrecy Index also showed is weak tax and banking laws, as well as trade agreements, make it easier for organized crime to launder money.
“The Conservative government isn't just hugging thugs. Its taking them out for dinner and paying for their drinks,” said James Clancy, National President of the National Union of Public and General Employees (NUPGE).
Anonymous shell companies make money laundering easier for criminals
Whether it is organized crime trying to launder profits from drug sales, people financing terrorism or tax evasion, experts in financial crime see anonymous shell companies as a “key resource.” The index reports that, along with the United States, Canada is one of the easiest countries in the world to set up an anonymous shell company.
Even when rules are in place, there is no guarantee they will be enforced. Both the Organisation for Economic Co-operation and Development and the Financial Action Task Force have expressed concern about the resources allocated to enforcement.
The response of the federal government was to eliminate the Canada Revenue Agency's Special Enforcement Unit, which investigated tax evasion by organized crime.
Fear trade deals will make money laundering easier
The trade deal with Panama was also identified as a problem in the Secrecy Index.
These days, the trade deals Canada is entering into are more about protecting investments than opening markets for Canadian goods. With Panama, “viewed by many criminologists as one of the tax havens that does the most to support the laundering of drug trafficking profits,” the question being asked is whose “investments” are being protected.
NUPGE and Canadians for Tax Fairness' ongoing tax campaigns continue to highlight the problems with Canada's tax system, laws and loopholes
"Canadians are frustrated with the lack of action on the issues of tax fairness by this government. They know we have a revenue problem, not a spending problem. The government needs to stop protecting criminals and start working for the common good of its people."
The Index was developed by the London-based Tax Justice Network, of which Canadians for Tax Fairness and the National Union of Public and General Employees (NUPGE) are partners. In Canada, NUPGE and CTF have been organizing on the issue of tax fairness, closing tax loopholes and the growing problem of tax havens. All of these issues contribute to rising income inequality in Canada but the government continues to ignore the issue.