Inside tcn - Laval News

657 Curé-Labelle Blvd., suite 250
Chomedey, Laval H7V 2T8
Tel: (450) 978-9999 Fax: (450) 687-6330
Distributed in Chomedey,
Ste-Dorothée, Laval-sur-le-Lac
H7W•H7T•H7V•H7S•H7X•H7Y•H7R
4 • The Chomedey News • www.chomedeynews.ca • December 2, 2004
Editorial & Opinion
Tax Evasion costs Canadians Taxpayers Billions
Canada’s top five banks and
wealthiest citizens hide billions in
paradise havens
According to a report published in last week’s
Journal de Montreal, Canada’s five major banks are
responsible for having sheltered an estimated ten
billion dollars in tax revenues from Revenue Canada and
provincial tax authorities this past decade alone.
The five banks, which combined, have set up an estimated
73 branches in off-shore paradise tax shelter havens like the
Cayman Islands, Bahamas, Bermuda and Barbados, have
according to Statistics Canada estimates, multiplied monies
invested directly by Canadians, five-fold this past decade
without any Canadian tax consequences or compensation.
These numbers, quoted by the local French daily, were
referenced from a recent Université du Québec à Montreal
(UQAM) study titled ‘Canadian Banks and Financial Evasion
in Paradise Havens’. Report co-author Léo-Paul Lauzon is
credited with compiling the banks’ financial reports. He
also believes that the banks’ practices constitute fraudulent
financial activity. Other notable Canadian accounting
professionals argue that calling this banking practice
financial fraud is excessive and harsh because though it
may be immoral and inappropriate it is none-the-less legal,
according to existing international laws and treaties, some
of which were negotiated while Paul Martin was Canada’s
finance minister.
It remains unclear if the report is suggesting that the
banks and or their directors are benefiting directly from
this off-shore circumventing of Canadian tax laws, or that
they have become tax evasion facilitators for the wealthiest
Canadians, or both.
Either way one thing is clear: During his ten-year tenure
as Canada’s ranking finance minister, Mr. Martin asked
Canadians to make severe and harsh sacrifices in order
to balance Canada’s books. During this period, he and
Canada Steamship Lines, a shipping company owned by
his family, set up close to ten businesses headquartered and
registered in Barbados, resulting in little or no Canadian tax
implications, although ownership and operational direction
is clearly Canadian.
This is but one example of off-shore financial activity that
may have cost Canadian and Quebec taxpayers billions of
dollars, according to Rosemont-La Petite-Patrie MP and
Bloc Quebecois critic in this matter, Bernard Bigras.
Though the Bloc Quebecois have been questioning the
government unrelentingly on the matter in parliament, this
recent report and general debate were conspicuously absent
from this province’s English media.
One could argue that singling out the Prime Minister
as an offender in this issue is unfair, but according to
numbers bandied about during parliamentary debate, major
personal assets of Mr. Martin are also registered in Liberia
and Barbados, two countries that have been defined as tax
havens.
According to Bigras, members of the House of Commons
have a moral responsibility to expose the shell games some
businesspeople and the major banks might be playing to
erode Canada’s tax base, which can only lead to a reduction
in services being provided to the public. He defines tax
havens as nothing more than countries with an extremely
low or even nonexistent tax rate, whose financial activities
are shrouded in secrecy thus allowing companies with little
or no substantial economic activities there to hide profits
from their real jurisdiction of operations.
It is fascinating to know about the workings of the
Barbadian tax system, of which big corporations like
Canada Steamship Lines and the major Canadian banks take
29,000
copies
29,500
copies
www.chomedeynews.ca
Publishers: George Bakoyannis
George S. Guzmas
General Director: George Bakoyannis
Associate Editor: Caroline Gardner
caroline@chomedeynews.ca
Advertising Director: George S. Guzmas
sales@chomedeynews.ca
Advertising Consultant: Dario Alborino
dario@chomedeynews.ca
National
Representation:
advantage. These corporations and banks
do business within a tax system at a rate of
between 1% and 2.5%, no withholding tax,
and no financial surveillance or control
of exchange transactions. Meanwhile it is
estimated that they are holding over $34
billion of invested Canadian assets.
“One cannot claim to be a good corporate
citizen and at the same time shamelessly
take advantage of these tax systems,” claims
Bigras. “We can look at the subsidiaries of
big banks that are located in tax havens….
Do you consider it normal for big banks,
which make astronomical profits and do
not hesitate to increase banking fees, to be
protected by tax conventions that benefit
them and their senior executives to the
detriment of Quebeckers and Canadians?”
he challenges. The real issue according to
the Bloc, is that when people do not pay
their taxes in a society like ours, they are
either deprived of public services or have
other people pay taxes for them. Those other
people are you and I.
The ugly ramifications of this issue suggest that large
corporations may control and manipulate governments
through means such as election funds, donations and lobby
groups. In fact, when ones considers that 40% of all Canadian
taxes collected are used just to service the debt interest, not
even to repay any national debt capital, it becomes clear
that banks have an unholy stake and influence in the free
democratic will of a people. We have to suspect that there is
a direct link between the attitudes of western governments
like ours, the complacency with which they treat large
corporations and banks, and the fiscal imbalances favoring
their activities.
According to Bloc critics, there is another element of
the debate that needs to be addressed. Fair and level tax
conventions between all countries must exist in order for
taxes to be paid. If a Canadian or Quebec company invests in
Germany, tax rules and laws would ensure that taxes would
have to be paid either in Canada or in Germany. However,
when one does business under a shell identity in Barbados,
at a 2.5% tax rate compared to 30% here, it means that one
would pay ten times less taxes under an advantageous tax
agreement with Barbados. This means that the economies
of Quebec and Canada are deprived of all these revenues,
which would be normally used to develop new services, let
alone salvage those like healthcare which have been brought
to the brink of disaster.
The tragedy is that other people pay the taxes that the
banks and Canada Steamship Lines do not pay. That is
what is immoral. This is why Canadians and Quebecers can
complain about the high tax rate with moral sanctity. The
federal government is not dealing with this issue, which the
Bloc Quebecois has been raising for 10 years. It has instead
dealt with unemployment insurance issues, where benefits
are no longer available to 85% of those who lose their job,
as used to be the case, but to a much smaller percentage
of people. It has taken $45 billion from the employment
insurance fund to eliminate the deficit and pay down the
national debt. Instead of making the richest Canadians
pay, poor and less fortunate people are paying through cuts
to social benefits. Further investigation reveals that the
Canadian government has pocketed $3 billion in the last five
years by attacking society’s most vulnerable and by reducing
guaranteed income supplement payments, while -according
to the UQAM report- the five major Canadian banks have
deprived the taxman of $5 billion over that same period
alone.
TEL: (450) 661-8200
FAX:(416) 661-8500
Editorial Staff:
Savas Fortis
Caroline Gardner
Eleanor Tylbor
Layout: Media Trek
Distribution: MPM • Canada Post
Printing: Payette & Simms
Member of
Quebec Community Newspapers Association &
Canadian Community Newspapers Association
Martin C. Barry
Carole Zabbal
Jasmin Legatos
This is nothing short of outrageous. There is a total
disregard for the citizens and taxpayers. Paul Martin called
upon Canadians to make sacrifices this past decade to ensure
the long-term viability of many of our social and economic
institutional safety nets which guarantee all a minimum
quality of life. When the middle class and poor must endure
an unfair and overbearing tax burden and social service cuts
while our society’s richest shelter billions in paradise tax
havens, it is unforgivable. If Paul Martin’s Liberals are not
going to try to level this playing field, Canadians will likely
look for someone who will.
Many years ago, when Mr. Martin first entered the federal
political scene, I had the opportunity to speak with him
at one of his first fundraiser cocktails. When the issue of
oppressive taxation came up, we discussed the options facing
Canadians: We could underperform, lacking motivation to
work harder, as less money would remain in our pockets; we
could leave the country for tax- friendlier borders like the
United States of America, or we could become thieves and
work in the country’s ever-growing black market and evade
taxation altogether. It would seem that Canada’s richest
figured out a better option as they have already sheltered their
billions in off-shore paradise havens and shell corporations,
leaving beleaguered revenue agents to chase after smalltime
tax evaders who could not afford such a move.
If memory serves me correctly, there was another
people at another time that felt as oppressed and abused
by governmental and institutional conventions such as
overbearing taxation. They decided to have themselves a ‘tea
party’ in the Boston harbor, and the American Revolution
was born. Not that I am advocating tax evasion or political
anarchy, but the truth is that it is time for the government
to recall its tax agents from harassing the diminishing
middle class and instead, concentrate their efforts on the
institutionally protected tax evaders who are defrauding
the country of billions of dollars annually. If the Martin
government continues to turn a deaf ear to this injustice, the
recent election results are just a taste of what Liberals can
expect from the ever-growing ranks of Canadian dissenters.
Kudos and regards go to the mad hatters of parliament,
the Bloc Quebecois, who despite their ambivalent agenda,
continue to champion important social and political debate
on behalf of all Canadians, as peculiar as that may sound. I
do believe that if things do not change in the near future, that
were I invited by the Bloc to a tax relief ‘tea party’ I would
be of a good mind to accept that invitation. Now where did
that rabbit go?
The opinions on THIS PAGE
reflect the consensus of
TCN’s Editorial Board.
Editorial Board
Adler Aristilde
Savas Fortis
Caroline Gardner
Carole Zabbal
James Ryan
Martin C. Barry
editor@chomedeynews.ca
Savas Fortis
Publishers’ Liability for
Error:The publishers shall not
be liable for slight changes or
typographical errors that do not
lessen the value of an advertisement.
The publishers’ liability for
other errors or omissions in connection
with any advertisement is
strictly limited to publication of the
advertisement in any subsequent
issues or the refund of any monies
paid for the advertisement.
Articles published reflect writers’
opinions, but not necessarily the
opinion of this newspaper.
All rights reserved © 2004.