12 solutions to fight tax havens

12 solutions to fight tax havens

In the fight to end tax havens and promote tax justice, the budget tabled by the Trudeau government on March 19, 2019 is a big disappointment.

Despite the many calls for action by civil society organizations, the Trudeau government has opted to invest a bit more money in the Canada Revenue Agency (CRA) and make a few technical proposals to close tax loopholes, but only the bare minimum. It goes without saying that we support such measures, but they don’t tackle the core problem: the framework of Canada’s tax system is flawed and enables very wealthy individuals and multinational corporations to legally avoid paying taxes with the help of tax havens.

This is a blatant injustice in terms of lower-income taxpayers, and a completely unacceptable misappropriation of collective wealth.

The budget doesn’t contain any effectively dissuasive measures that would curb the diversion of profits offshore. And it adopts a completely laissez-faire approach to foreign digital companies and e-business, thus subjecting Canadian companies to unfair competition.

In addition, government investments in resources for the Canada Revenue Agency are nowhere near what the CRA actually needs. Due to lack of resources or just because it’s always been that way, Canada still has a two-tier tax system where taxpayers with a high net worth can settle out of court behind closed doors to avoid facing legal charges and heavy penalties.

Canada continues to maintain highly problematic trade agreements and diplomatic arrangements with countries that are notorious tax havens.


In 2018, Canada even ratified new agreements with Antigua & Barbuda and Dominica, two tax havens that were on the European Union’s watch list! Under these agreements — and there are dozens of them — it’s legal for Canadian taxpayers to report their income in these tax havens, and then repatriate the income to Canada without paying tax on it.

These brief examples show the low priority placed on fighting tax havens by the Trudeau government. Paradoxically, it claims to defend the middle class while supporting a structurally flawed tax system that is soft on high-net-worth individuals and multinationals. This situation is as profoundly unjust as it is unacceptable. Instead of undertaking the work that’s necessary to revamp our ailing tax system, the federal government is content with superficial and marginal measures.

The scope of the problem is nonetheless clear. Canada Revenue Agency’s conservative estimates indicate that Canada loses up to $3 billion a year because of tax avoidance. But if we factor in the impact of Canada’s agreements with non-cooperative tax jurisdictions, that loss rises to at least $14 billion. Imagine the public services that could be funded with that money!

Twelve solutions

The fight against tax havens has to be a key issue in the next federal election. It’s up to the various political parties to convince Canadians to take tax justice seriously!

To that end, we’re calling on all political parties to publicly commit to the 12 solutions we’re advocating (echecparadisfiscaux.ca/solutions) and take bold, resolute action to fight tax havens. These solutions would give Canada powerful ways to block access to tax havens and dissuade fraudsters. They would substantially enhance corporate transparency and end the two-tiered system that favours the very wealthy and the multinationals. These solutions would also ensure that all taxpayers pay their fair share, and would help restore confidence in our institutions. And Canada could finally join the group of countries that are spearheading these reforms at the international level.

This letter was published in Le Droit on April 2, 2019.

CAROLLE DUBÉ, PRESIDENT, APTS, LISE LAPOINTE, PRESIDENT, ASSOCIATION DES RETRAITÉES ET RETRAITÉS DE L’ÉDUCATION ET DES AUTRES SERVICES PUBLICS DU QUÉBEC, LUC VACHON, PRESIDENT, CSD, SONIA ÉTHIER, PRESIDENT, CSQ, JACQUES LÉTOURNEAU, PRESIDENT, CSN, SYLVAIN MALLETTE, PRESIDENT, FAE, DANIEL BOYER, PRESIDENT, FTQ, NANCY BÉDARD, PRESIDENT, FIQ, DENIS BOLDUC, PRESIDENT, SCFP, RICHARD PERRON, PRESIDENT, SPGQ, JEAN-MARIE LAFORTUNE, PRESIDENT, FÉDÉRATION QUÉBÉCOISE DES PROFESSEURES ET DES PROFESSEURS D’UNIVERSITÉ, GUILLAUME LECORPS, PRESIDENT, UNION ÉTUDIANTE DU QUÉBEC, CLAUDE VAILLANCOURT, PRESIDENT, ATTAC-QUÉBEC, GÉRALD LAROSE, STRATEGIC DEVELOPMENT DIRECTOR, CAISSE D’ÉCONOMIE SOLIDAIRE, FRANÇOIS DÉCARY-GILARDEAU, PRESIDENT, UNION DES CONSOMMATEURS, SANDRINE LOUCHART, LES AMIS DE LA TERRE, GÉRALD LAROSE, CHAIRMAN OF THE BOARD OF DIRECTORS, CAISSE D’ÉCONOMIE SOLIDAIRE DU QUÉBEC, JOCELYNE LACHAPELLE, EXECUTIVE DIRECTOR, ASSOCIATION QUÉBÉCOISE DE LUTTE CONTRE LA POLLUTION ATMOSPHÉRIQUE | APRIL 18, 2019

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