In his report State of Tax Justice 2021 published on November 16, the Tax Justice Network (TJN) revealed that the total taxes lost worldwide each year, due to tax havens, was 485.3 billion US dollars. In Canada, the same organization estimated this lost amount at 5.3 billion, a sum similar to that of 2020. It should be noted in passing that this estimate of the TJN is only a fraction of the whole phenomenon of tax evasion. and tax avoidance, which in Canada cost between C $ 19 billion and $ 26 billion annually, as the Canada Revenue Agency revealed in 2018.
The Échec aux paradis fiscaux collective wishes to seize the opportunity of the publication of the TJN to remind, not without irony, that Canada, despite its support for the global minimum tax of 15%, is a signatory of several tax treaties making it possible to avoid double taxation with several recognized tax havens. These agreements make it possible to repatriate to Canada, tax-free, profits declared in a country with very low taxation.
Another equally troubling fact emerges from the TJN report: Canada’s tax system plays an important role in global networks of aggressive tax optimization. In other words, in its own way, Canada is also a tax haven. Indeed, while in 2019 the Canadian tax system inflicted on other countries a tax loss totaling US $ 7.5 billion, this figure skyrocketed in 2020 to reach US $ 17.9 billion! What is more, Canada is not a winner in this exchange, because we have no guarantee that this money will, in turn, be captured by the Canadian tax authorities. What is guaranteed, however, is that Canada plays a central role in the international organization of tax havens, thus moving from the 19e at the 10e position of those most responsible for the problem of tax avoidance and tax evasion.
Is this the legacy that the government of Justin Trudeau and Minister Chrystia Freeland want to leave both to Canadians and to the world? If not, they have before them a golden opportunity to show that they take tax justice seriously by ensuring that tax loopholes are closed and by strengthening the Canadian tax system, before the end of the day. entry into force of the Global Minimum Tax Agreement of January 2023.