A still from the documentary The Price We Pay.
The Council of Canadians is outraged by the revelations contained in the Panama Papers.
Global News reports, "The massive dump of the Panama Papers – some 11.5 million documents from Panamanian law firm Mossack Fonseca – details how everyone from world leaders, dictators, business people and even a soccer star are tied to offshore accounts and shell companies used to hide wealth."
CBC explains, "Mossack Fonseca, which has 500 staff working in 40-plus countries, ... is one of the world's top creators of shell companies — corporate structures that can be used to hide ownership of assets." Aljazeera adds, "The so-called Panama Papers highlight how easy it is for the wealthy, political elite and their families to set up shell companies in tax havens to conceal their wealth. According to financial transparency campaign group Tax Justice Network, as much as $32 trillion was hidden in offshore accounts by rich individuals. It can cost as little as $1,500 to set up an offshore structure to hide your wealth."
Canadians For Tax Fairness estimates that Canadian corporations have as much as $199 billion in offshore accounts in countries including Panama, Barbados, the Cayman Islands and Luxembourg. The group estimates that federal and provincial governments lose $7.8 billion a year in tax revenue because of this. The National Observer reports the sum could be more than $20 billion a year.
To put those numbers in context, it would cost just $4.7 billion - over a ten year period - to provide clean drinking water and sanitation for First Nations peoples in Canada.
The names of 350 Canadians who are avoiding taxes through offshore accounts are contained in the Panama Papers. CBC notes, "Among the leaked records is info on the offshore assets of several hundred Canadians, including lawyers, mining and oil executives, business people and even known fraudsters. ...The document leak also shows how the globe's biggest banks played a key role in creating offshore shell companies. ...Among the financial institutions that regularly used the Panamanian law firm was Royal Bank of Canada, which with its subsidiaries set up 370 such corporations, the document leak reveals."
Internal documents from Mossack Fonseca fell into the hands of the German newspaper Süddeutsche Zeitung, which shared them with the Washington-based International Consortium of Investigative Journalists, a collaboration between 100 international news organizations in 76 countries. The Toronto Star says it participated in this endeavour and is "publishing this material not because we believe something illegal is happening, but because we think Canadians should know about how the elite hide and shelter so much money. The rich get to play by different rules than the rest of us. We should all know about this unfairness."
The federal government is trying to make it sound like it is taking action, but it has a long way to go.
A spokesperson for Revenue Canada says, “The minister of National Revenue has instructed Canadian Revenue Agency (CRA) officials to obtain the list of data leaked through Panama Papers in order to cross-reference this information with data already being obtained through the agency’s existing mechanisms."
But the Globe and Mail reports, "Experts and critics have called on Ottawa for years to figure out the size of Canada’s 'tax gap', which is the difference between the money collected by CRA and the overall revenue that should be generated based on the country’s economy. ...There has been no clear movement from the government to provide the required numbers. To this point, the CRA has only promised to 'study the concept of the tax gap'."
Author and activist Murray Dobbin has written, "It will be Finance Minister Bill Morneau who will ultimately decide how much of a priority to make of the tax haven issue. ...Letting the need for a genuine national conversation about taxes slip to the back burner would be a mistake. Now that we have a government that says it believes in governing, the question of comprehensive progressive tax reform needs to be front and centre."
While that is true, National Observer reporter Bruce Livesey cautions, "Ultimately, the offshore tax issue exposes who governments are beholden to. And they’re clearly beholden less and less to average citizens (if at all) and more to corporate interests and the billionaire class. So if you want to know why nothing ever happens with eradicating offshore tax havens, simply look at who are the beneficiaries - and who's afraid of taking them on."
This past January, the Council of Canadians Nelson chapter screened the documentary The Price We Pay to help facilitate a local conversation on corporate tax avoidance. The film's website notes, "The Price We Pay is inspired by Brigitte Alepin’s book La Crise fiscale qui vient. ...Tax avoidance by big corporations and the wealthy – citizens of nowhere for tax purposes – is paving the way to historic levels of inequality and placing the tax burden on the middle class and the poor." To watch a trailer for that film, please click here. The Price We Pay will be available on DVD in Canada soon.