Canadians had $170-billion invested in the world’s top 10 tax-haven countries at the end of 2013, a 10-per-cent increase from a year earlier as growing sums flow into foreign investment accounts.
A new analysis by Canadians for Tax Fairness, an advocacy group promoting equitable tax reforms, says an additional $15-billion was “stashed” by Canadians in the 10 leading tax-haven countries last year, bringing total Canadian holdings in those countries to $170-billion by the end of 2013.
Most of that money is held in just three countries: Barbados, Cayman Islands and Luxembourg – where Canadians now have $124-billion invested, an increase of 188 per cent over seven years from $43-billion at the end of 2005. The analysis is based on Statistics Canada data on foreign direct investment abroad.
Dennis Howlett, executive director of Canadians for Tax Fairness, said the Canada Revenue Agency needs resources and political will to put a halt to money flowing into tax havens.
“This government can’t just shrug its shoulders and be outmanoeuvred by corporations and very rich people looking to get even richer at the expense of the rest of us,” he said.
His group estimates federal and provincial governments lose $7.8-billion in tax revenue each year because of money shifted to tax havens, which they argue could make a dent in budget deficits or fund numerous new government or social programs.
“The scale of the problem gets larger while the federal government cuts back on food safety, rail inspections and services for veterans and their families,” Mr. Howlett said.
The federal government pledged last year to participate in a campaign by Group of 20 member countries to share information to clamp down on people and companies evading tax through the use of tax havens. The group pledged to to share tax records by 2015 through automated links.