Sutra Web Directory - Discover Top Rated Online Services and Websites - Article Details

Trudeau refuses calls to exclude tax haven companies from COVID-19 bailout
Date Added: April 24, 2020 08:01:12 PM
Author: Sutra Web Directory
Category: Regional: Canada

Poland is doing it. Denmark, too. But Prime Minister Justin Trudeau said Canada would not deny bailout funds to companies that operate in offshore tax havens.

“We do not want to punish workers based on the company they work for. They have families and communities that depend on them,” Trudeau said. “We are focusing on the workers and not the company.”

In the House this week, members of the Bloc Québécois repeatedly asked Trudeau about whether public dollars would be sent to companies that use tax havens to avoid contributing their fair share to public coffers.

“Is it morally right for a business to do whatever it takes to avoid paying taxes, use accounting strategies to avoid paying taxes, and use tax havens to avoid paying taxes, then ask the state for help and get it?” asked BQ MP Alain Therrien.

“(The government) can tell these people that, from now on, if they want government assistance, they will have to pay their taxes and bring their money back from tax havens.”

Trudeau and other members of the Liberal government were adamant that while tax avoidance is a problem, this is not the time to solve it.

“At every stage of our reflection, we have remained focused on Canadians, on the workers and families who might be affected by a loss of revenue because of COVID-19,” Trudeau said in Parliament.

“We did not ask whether people work for small businesses or large corporations, for local businesses or multinationals. We did not judge Canadians on whether they work for a company considered morally acceptable or for a firm that sells tobacco or cigarettes. We are not passing any moral judgements on workers. We are simply saying that if they have lost their jobs because of COVID-19, we will help them.”

Earlier this month, Poland and Denmark announced that companies registered in countries that are listed on the EU’s black list of tax havens will be denied financial aid from the coronavirus bailout packages.

Polish Prime Minister Mateusz Morawiecki said large companies wanting to benefit from the bailout fund must pay domestic tax.

“Let’s end tax havens, which are the bane of modern economies,” he said, according to a report in Business Insider.

A Canada Revenue Agency analysis of 2014 corporate taxes suggested that Canadian corporations avoid paying between $9.4 and $11.4 billion in tax each year. This was the equivalent of 24 to 29 per cent of the total corporate tax bill that year.

This estimate squares with a 2017 Toronto Star investigation that found Canada’s largest corporations avoided paying more than $10 billion in tax each year — mostly by using tax havens.

And those calculations only relate to legal tax avoidance. There are also illegal tax evasions and grey-area strategies that deprive the public of billions — the kinds of behaviour that were exposed in the Panama Papers.

“The fact that this tax avoidance is legal does not make it right,” said Bloc leader Yves-François Blanchet, adding that he was “astounded to hear (Trudeau) say that the government will do nothing to ensure that the businesses it is helping act morally or ethically.”

“We all agree that some of the money should go to businesses, but there are ‘businesses,’ and then there are ‘businesses.’ Some businesses, some small local businesses, fight for survival every day and are having a lot of trouble. Other businesses have no trouble at all. They pay little or no tax in Canada but pay tax elsewhere because it is cheaper,” he said.

Blanchet said regular taxpayers will be on the hook to pay for the enormous bailout package, now estimated to cost more than $200 billion, while big companies stash their profits offshore.

“We cannot ask taxpayers to pay more because some businesses are not paying. That seems like a basic ethical issue to me,” he said.

~ Via The Star