‘Pandora Papers’ trove of tax haven abuses could lead to action—or not


GIVING THE RICH A PASS is old hat for Revenue Canada. They did it in 2016 with the leak of the “Panama Papers.” There is no reason to believe they won’t do it again with the recent leak of  the “Pandora Papers”—another astonishing look at how the rich and powerful use offshore tax havens to avoid paying taxes.

The Panama Papers revealed how the rich and powerful of the world hid fortunes through dubious dealing in shadowy offshore companies. There was hell to pay. Prime ministers were removed from office, tax evaders went to jail, governments recovered more than $1 billion in unpaid taxes.

Not in Canada

Everywhere but here.

The Canada Revenue Agency (CRA) has yet to lay one charge linked to the Panama Papers leaks.

The CRA has assessed $29 million in taxes and penalties on 40 Canadians named in the Panama Papers leak. However, the agency has failed to confirm that any of that money has actually been recovered.

“There’s been a lot of talk but not a tremendous amount of action,” said Toby Sanger, executive director of Canadians for Tax Fairness.

The Pandora Papers revelations give even more proof that tidal waves of money continue to flood into offshore tax havens, says Sanger.

The secret Pandora documents expose the offshore dealings of hundreds of Canadians, along with many former and current world leaders, like the king of Jordan, as well as more than 330 politicians and public figures and more than 130 billionaires.

Cheated out of $15 billion

The CRA has calculated that as much as $15 billion in unpaid tax is lost annually to offshore tax havens.

“Each time that we’ve seen some numbers from the CRA, the amounts that are lost grow,” Sanger said.

Tax havens are receptacles of huge amounts of Canadian money. Last year, Canadian investment dollars in the top 12 tax havens reached a record high of nearly $400 billion, according to Statistics Canada.

“Canada has been a facilitator and has helped create tax havens. For many decades we essentially turned a blind eye to those things,” said Sanger.

No Canadian knows more about the ins and outs of hiding money offshore than Fred Sharp. For almost 30 years, the Vancouver man ran an offshore incorporation clearing house for wealthy clients that routed their money through shell companies in the British Virgin Islands and Belize. Despite being under CRA audit for almost a decade, Sharp has avoided any serious repercussions in Canada.

That doesn’t surprise former RCMP money laundering investigator Chris Mathers. “This is Canada. Nobody goes to jail. Nobody pays a fine. Nothing happens here. There are no consequences,” he said.

Bringing it all back home

On top of all that, the use of anonymous shell companies has also become a problem here at home.

Canada has been widely criticized as a tax haven because our provincial governments don’t require residency or even basic identification to register a company.

The problem with Canada’s lack of transparency around corporate ownership goes beyond tax evasion, said Garry Nichols, the former head of the RCMP’s Toronto integrated proceeds of crime unit. This kind of anonymity also provides cover for crime.

Billions in illicit cash is stashed in rapidly rising real estate markets from Toronto to Vancouver and few are held accountable. A 2019 investigation found that almost 90 per cent of money-laundering charges in Canada are withdrawn or stayed.

Nichols lamented that dirty money isn’t a priority for law enforcement anymore.

“They don’t look for the money. They don’t seize houses and they certainly don’t go offshore,” said Nichols.

“It’s probably the greatest time in history to be a criminal in this country.”

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