Monday, January 02, 2017

Canada - a "Haven for Corrupt Capital."

Income, Me? No, I Don't Have Any Income.

Last year when Trudeau announced Canada would be opening new visa offices in China I suggested it would be better if he opened new offices for the Canadian Revenue Service in China to work with Chinese revenue authorities on tax cheats living in Canada.

The idea came from a Vancouver Sun report that my old Vancouver neighbourhood was the poorest, based on declared income, in the entire city. Today that area features houses ranging from $1.5 to $2.5 million and more. How could anyone with negligible income buy those homes or two or three, many of them just sitting vacant?

It's beyond obvious that those "homeowners" are keeping their income offshore, far from the prying eyes of Canada's tax authorities.

Mitchell Anderson writes in The Tyee that Canada is getting a reputation as a "haven for corrupt capital."

How many shell companies exist in Canada? How many legal trusts? Who are the beneficial owners protected by such unnecessary veils of secrecy? No one knows, because in most cases there is no legal requirement to disclose actual ownership even to regulators. In fact, more information is required to get a library card than to set up a company in most jurisdictions in Canada.

What we do know is that Canada ranks near the bottom among our OECD partners in terms of corporate disclosure requirements to fight money laundering and tax evasion. A recent report from Transparency International detailed the dismal situation and why our country has become a haven for dubious offshore property speculation.

“The Canadian government must take immediate steps to require all companies and trusts in the country to identify their beneficial owners to ensure Canada does not become a haven for corrupt capital,” warns Transparency International Canada executive director Alesia Nahirny.

Canada is one of the few developed countries that does not require the identities of company directors to be verified, or any information on shareholders. In most provinces it is legal to use “nominee” directors or shareholders without disclosing that they are acting on someone else’s behalf.

A nominee is essentially a sock puppet — the proverbial student or homemaker often listed as the title owner of some of Canada’s most expensive homes. Why would someone list a multi-million dollar property in someone else’s name? Some plausible reasons include to avoid taxes or to launder money. This practice remains completely and inexplicably legal in most parts of our painfully polite country.

Maybe our social butterfly prime minister could at least deal with this. Speaking of which, whatever happened to the Revenue Agency/KPMG/Isle of Man scandal, the one that showed government revenuers to be in bed with KPMG to swindle Canada out of tax revenue through a dodgy shelter deal on the Isle of Man? Or the Panama Papers scandal? I haven't heard of our courts being overwhelmed with criminal charges. I haven't heard of even a single charge, nothing at all.

Nope, No Money Here, Sorry.


Owen Gray said...

Disturbing stuff, Mound. If the news gets back to the middle class, the prime minister will be in trouble.

The Mound of Sound said...

The middle class, at least our this way, has the message, loud and clear. The only reason federal and provincial politicians are doing anything is because they generally fear unrest. Even at that they won't tackle the problems head on but mainly drag their feet with marginally effective measures.