Canada loses at least $ 6.6 billion in tax revenue a year because of the avoidance tactics of big companies and wealthy families. However, he is complicit in losses at least three times heavier in the rest of the world.
Governments in Canada lost the equivalent of US $ 5.3 billion (CA $ 6.6 million) in 2020 in international tax evasion and avoidance at the rate of US $ 3.5 billion (CA $ 4.4 billion) in accounting maneuvers on the part of companies, and 1.8 billion (CA $ 2.2 billion) in tax on assets stashed by wealthy individuals in tax havens, the specialized NGO Tax Justice Network reported on Tuesday on the recently accessible database on the phenomenon.
The other countries
These lost tax revenues are equivalent to just over CA $ 180 per Canadian or almost 4% of the health care budget, note the study’s authors.
But that is nothing compared to the tax losses that other countries suffer because of the rules and practices in Canada. Other countries can, in fact, blame Canada for almost US $ 18 billion in tax losses alone on the corporate tax front and more than US $ 735 million in tax avoidance by their wealthy families, for a total of US $ 18.7 billion, or CAD $ 23.3 billion.
This represents just under 4% of the US $ 483 billion in tax losses documented by Tax Justice Network researchers around the world last year.
It would be worth in Canada the 10e rank in the sad list of the main countries responsible for tax losses on a global scale, behind the Cayman Islands (1er with 17.2%), the United Kingdom (2e with 14.1%), Singapore (3e with 6.3%), Luxembourg (4e), the Netherlands (5e), Switzerland (7e) and the United States (8e), but in front of well-known tax havens, such as Bermuda (11e with 2.8%), the British Virgin Islands (14e with 1.8%) or Panama (31e with 0.5%).
The opinion of ourselves
“Let’s say that it changes the opinion that we are used to having of ourselves”, observed in a telephone interview at To have to William Ross, coordinator of the Quebec collective Échec aux paradis fiscaux.
This inglorious role played in the world by Canada is due in particular, according to him, to its very accommodating tax rules in the mining sector as well as to its numerous bilateral tax treaties signed with tax havens to avoid double taxation, “but which turn to double non-taxation ”.
For foreign companies, Canada would thus be a good place to artificially transfer profits, even if it means moving them again to other skies to pay less taxes, he explains.
According to the report, these little accounting games brought in just over US $ 13 billion in profits out of Canada in 2020, but brought in five times more (67.5 billion).
We do not say whether this enabled Canada to reap tax revenues that should have gone to the governments of other countries.
The poor countries
All these figures come from aggregate data collected under a new rule from the Organization for Economic Co-operation and Development (OECD) requiring large multinationals in particular to report, country by country, their income, number of workers, and profits. and their taxes paid.
These new data are still incomplete and their processing is to be refined, warned the Tax Justice Network.
According to the International Monetary Fund, indirect losses resulting from abusive corporate practices are at least three times greater than direct losses and therefore exceed $ 1 trillion per year. It is in poor countries that these practices do the most damage as a proportion of the total revenues of their governments.
Deeming recent advances in the field at the G20 and the OECD insufficient, William Ross nevertheless noted a willingness on the part of governments to tackle the problem.
“The fight against tax havens has three components: first, transparency and traceability; second, sanctioning abuses; and, ultimately, the recovery of lost tax revenue. Canada is behind in all three areas and Quebec a little less. We should not let this chance pass by. “