Liberals tainted by tax dodges, TFSA cut
It’s not only the wealthy who seek a tax haven. But it’s much more difficult for the average Canadian to achieve even a fraction of the tax-free satisfaction that seems to come so easily to those with millions. And when some modicum of relief seems to be assured for the middle-class, measured in thousands of dollars, the potential is spoiled by the federal Liberals.
Tax dodges have been used for decades by wealthy Canadians. Most are permitted under national tax codes. But the revelation that thousands of individuals and many corporations have taken advantage of off-shore tax havens has placed an unusual spotlight on this activity.
Most Canadians, especially those of average incomes, frown on off-shore tax avoidance — partly because it strikes them as unfair and immoral, and partly because the same level of tax avoidance just isn’t as easy to obtain for the average Canadian.
Off-shore tax havens are not necessarily illegal, but the secrecy of their existence and operation implies the owners are trying to hide something — and they certainly are.
Among those found to operate such accounts are individuals tied to the federal Liberal party and the Trudeau government.
It’s striking to comprehend how little of this cat-and-mouse game is available to the average Canadian. Indeed, what loopholes are available are being closed by Trudeau and his finance minister in their inappropriately named quest for tax fairness.
That quest was launched two years ago when the newly-elected Trudeau cut the annual contribution limit for tax-free savings accounts (TFSAs). The former Conservative government had introduced TSFAs in 2009 with an original contribution limit of $5,000, raising that to $5,500, and then to $10,000. The annual limit was rolled back to $5,500 effective Jan. 1, 2016.
Trudeau suggested that TFSAs helped only the wealthiest of Canadians.
He was wrong. Earlier that same year, the Canadian Revenue Agency reported more than 10.7 million Canadians had opened a TFSA, and that account ownership spanned the economic spectrum. Indeed, CRA statistics showed that 267,000 Canadians who earned less than $20,000 a year had maximized their TFSA contribution.
The Liberals’ decision to roll back TFSA limits in 2015 was politically motivated, and has denied average Canadians the ability to better leverage a popular, entirely transparent financial instrument.
How the federal Liberals respond to this renewed interest in off-shore accounts will be interesting. There will be no quick decisions, as there was for the TFSA. — Peter Epp