Two sets of rules for income-tax season

Tax season is upon us. While few of us relish the annual tedium of filling out tax forms, most of us understand that by paying our fair share we’re investing in Canada’s infrastructure and social programs, our health-care system, our national security and myriad other things that make Canada a great place to live.

At the same time as we are filling out these forms, however, some wealthy individuals and corporations are going to great lengths to avoid paying their fair share of taxes here in Canada, costing the rest of us anywhere from several hundred million to several billion dollars every year. (The exact amount is difficult to determine since the federal government refuses to measure the “tax gap,” something other developed countries have routinely done.)

Under the current tax rules, large companies, trusts and wealthy individuals are able to shift their money from a Canadabased investment corporation to a subsidiary in a tax haven — Panama, the Cayman Islands or anywhere else that charges them little or no tax. By stashing their revenues offshore, these individuals and corporations arrange their affairs to avoid paying their fair share of taxes in Canada. While “aggressive tax avoidance” schemes might be perfectly legal, that does not make them right.

Like most Canadians, I believe in fair taxation. I find this loophole — and the government’s unwillingness to close it — completely unacceptable. A recent Environics poll suggests that 90 per cent of Canadians agree that using tax havens to avoid paying taxes is morally wrong, even if it’s entirely legal. Almost all Canadians agree that the Income Tax Act should be amended to make these practices illegal. Almost all, that is, except the current government.

Last year, I introduced Bill C-362 into Parliament. It would close loopholes that allow large corporations to avoid their taxes. I’m deeply grateful to the late Robert McMechan, a former tax litigator at the Department of Justice, who helped ensure that my bill would be an effective tool to fight aggressive tax avoidance. It would be only one step that must be taken if we are going to improve the fairness in Canada’s tax system.

It’s my hope that Canadians from coast to coast to coast — hard-working people who are paying their fair share this tax season in recognition that they are investing in the things we all rely on — will call on the current federal government to support my bill and make tax fairness a reality for everyone.

After all, having two sets of rules isn’t just unfair, it’s uneconomical. An organization called Canadians for Tax Fairness estimates that my bill could recover up to $400 million per year. No matter one’s politics, surely we can all agree that those millions would be better spent improving infrastructure, creating jobs or serving Canadians, rather than lining the pockets of our richest corporations and the wealthiest among us.

It also would help level the playing field. For example, why should Starbucks be able to arrange its affairs to minimize the taxes it pays in Canada, while the coffee shop across the street cannot take the steps necessary to use tax havens to reduce its tax burden?

Levelling the playing field is in everyone’s interest. And you don’t have to be an accountant to understand that letting the wealthiest among us take hundreds of millions of dollars out of our economy each year just isn’t working. It’s time to make tax fairness a priority. Murray Rankin is the Member of Parliament for Victoria. He will be hosting a free community town hall on tax fairness at Cook Street Village Activity Centre on Tuesday, March 6 at 7 p.m.