“Cameco and Silver Wheaton got caught avoiding their taxes. As more information emerges about the use of tax havens by large corporations, it’s likely we’ll find those two companies are just the tip of the iceberg” — Larry Brown, NUPGE President
Ottawa (17 Aug 2017) — A recent report from Publish What You Pay Canada (PWYP), Many Ways to Lose a Billion. shows how people in many places with extensive mineral, oil or gas resources are being ripped off by resource extraction companies. Countries where this is a serious problem range from Canada to some of the poorest countries in the world.
Mining companies use tax havens to evade billions in Canadian taxes
While the report only included 2 Canadian examples of tax avoidance by mining, oil and gas companies, the lost tax revenue was in the billions. Both companies shifted profits to subsidiaries in tax havens. By selling uranium at below market rates to a subsidiary in a low tax part of Switzerland, Cameco is estimated to have avoided as much as $3.2 billion in taxes. Another company involved in mining, Silver Wheaton, flowed funds through a subsidiary in the Cayman Islands to avoid several hundred million in taxes.
The Canada Revenue Agency (CRA) is pursuing both companies for what they owe, but both companies are fighting the CRA in court.
“Cameco and Silver Wheaton got caught. As more information emerges about the use of tax havens by large corporations, it’s likely we’ll find those two companies are just the tip of the iceberg,” said Larry Brown, President of the National Union of Public and General Employees (NUPGE).
Tax avoidance devastating for poorer countries
While tax avoidance by mining, oil and gas companies is a serious problem in Canada, it’s devastating for poorer countries. For example, it’s estimated that corporations illegally transfer $50 billion (US) out of Africa each year. That’s more than double the amount of foreign aid African countries receive.
Dealing with tax avoidance by large corporations requires many different actions
The report from PWYP makes it clear that knowing how large corporations are dodging taxes is just the first step. A wide range of actions are required to deal with tax dodging. These include strengthening the oversight of the tax system, helping poorer countries build capacity and better monitoring, a continued push to require public disclosure of what companies pay to governments and improved analysis to identify problems.
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 370,000 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