Liberal Sen. Percy Downe has been a voice in the wilderness. The Prince Edward Island senator was on a lonely mission for years, speaking across Canada, in the United States and Europe about offshore tax shelters. Those havens make it easy for the rich and powerful to evade paying their fair share of taxes.
Downe is upset that Canadian tax cheats have robbed us of billions of dollars. Each time he wrote a commentary about the failures of the federal government and the Canada Revenue Agency (CRA) to track down these cheats, he was ridiculed.
Estimates suggest the taxes owed from offshore accounts amount to at least $4 billion and could be more than $10 billion.
The agency apparently doesn’t like anyone snooping into its policies. We still don’t know what the tax gap actually is - the difference between what Canadians owe in tax and what the federal government actually collects.
Earlier this year, the CRA came under fierce criticism for offering an amnesty to wealthy clients of a Canadian investment firm caught using an offshore tax-avoidance scheme. The CRA breached its own guidelines by offering the amnesty.
Many Canadians can’t relate to the foibles of the rich. To utilize offshore accounts, you need lots of money. Since most of us don’t have extra cash, we don’t care. That should change. The “tax gap” phrase is trending today because it’s suddenly become very sexy. In the recent federal budget, the government earmarked over $400 million to help collect billions of dollars owed through evasion or avoidance.
This week we were hit with a double whammy. The leak of the Panama Papers thrust the attention of the world on vast tax shelters operating in the Central American country.
The scandal has ensnared government officials in Iceland and Britain, members of the Royal Family, sports stars, business tycoons and entertainment celebrities around the world.
If political leaders are the ones benefiting from offshore accounts, it’s little wonder that justice has moved slowly.
Last week in Montreal, Prime Minister Justin Trudeau made a definitive statement on tax cheats. He called for the international community to work together to make global finance more transparent and accountable. Otherwise, rich investors exposed in Panama will simply hop around to the next tax shelter. It’s time for a global, offshore tax evasion crackdown. It all must be music to Downe’s ears. Just think what that extra cash might mean for the provinces and the country.
It could mean federal help for muchneeded new regional hospitals. It could pour more money into infrastructure projects across the nation, and improve education, housing and utilities for many First Nations communities, which are in desperate need. It would reduce the deficit.
It’s tax time. The vast majority of Canadians feel it’s important that everyone pay their fair share of tax. Most of us will do exactly that.
We’ve had enough of tax cheats. And of the rich getting richer - illegally.
Just think what that extra cash might mean for the provinces and the country.