Politicians who've claimed we can’t afford quality public services found linked to tax havens

“The amount Canada loses to tax havens will drop when the federal government genuinely believes that helping a hungry child is more important than helping the wealthy avoid taxes.” — Larry Brown, NUPGE President

Ottawa (07 Nov. 2017) — Among the Canadians with links to tax havens are several politicians who justified cuts to public services by claiming the federal government didn't have enough money. The names of these politicians were revealed in the Paradise Papers released by the International Consortium of Investigative Journalists (ICIJ).

At the same time Justin Trudeau’s government was claiming it couldn’t afford to increase federal health care funding to keep pace with costs, the private investment firm controlled by his chief fundraiser was sending millions of dollars to tax havens. Three former prime ministers who made drastic cuts to federal funding for health care, post-secondary education and social assistance — Brian Mulroney, Jean Chrétien and Paul Martin — have ties to companies based in tax havens.

“The same politicians who've claimed the federal government doesn’t have money for health care post secondary education and social assistance have direct, or indirect, connections to tax havens. When well-connected political figures are linked to tax havens, people are right to be worried about whether the federal government is serious about cracking down on their use” said Larry Brown, President, National Union of Public and General Employees (NUPGE).

Corporations also using tax havens to avoid taxes

The use of tax avoidance by wealthy individuals is only part of the problem. Many large corporations are also making use of tax havens to avoid paying their share. The Paradise Papers identify 560 Canadian companies using tax havens. In addition, many well-known multinational corporations that operate in Canada also make use of tax havens.

Paradise Papers only show a small part of problem

Like the Panama Papers released in 2016, the Paradise Papers only provide information on a small portion of the companies and wealthy individuals using tax havens. Information in the Panama Papers came from Mossack Fonseca in Panama. The information in the Paradise Papers comes from 2 Bermuda based firms: Appleby, law firm, and Estera, a corporate services provider.

Tax havens costing Canada between $10 and $15 billion a year

Canadians for Tax Fairness estimates that the use of tax havens by individuals and corporations costs Canadians between $10 billion and $15 billion a year. Even though successive federal governments have claimed to be cracking down on tax havens, estimated losses are up from earlier estimates of between $5 billion and $8 billion a year.

“The increase in the amount of tax Canada is failing to collect because of tax havens shows that current federal government efforts to crack down on tax havens are inadequate,” said Brown.

Child poverty, student debt, and wait times for surgery are the price of tax avoidance

When Canada loses $10 to $15 billion a year because of tax havens, it is easier for politicians to claim that we can’t afford quality public services. That was the excuse used by Brian Mulroney, Jean Chrétien and Paul Martin when they cut funding for health care, post-secondary education and social assistance in the late 1980s and early 1990s.

Low- and middle-income Canadians are still paying a high price for those cuts. Students are graduating from college or university with massive debts. Seniors are waiting longer for surgery. Children are going to school hungry because social assistance hasn’t kept pace with the cost of living. All so some wealthy individuals and corporations could avoid paying their share.

The federal government has the ability to crack down on tax havens – if it chooses

The federal government has the tools to tackle tax havens, but it needs to be willing to use them. Canadians for Tax Fairness have identified rule changes that would help, including an end to the secrecy around who really controls corporations registered in Canada.

“Successive federal governments have talked tough on tax havens, but are still choosing not to take the actions needed to deal with the problem. The amount Canada loses to tax havens will drop when the federal government genuinely believes that helping a hungry child is more important than helping a wealthy tax avoider,” said Brown.

 


NUPGE

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

 

Issues and Campaigns: