The House of Commons Standing Committee on Access to Information, Privacy and Ethics (ETHI) met to study the Conflict of Interest Act, hearing from Jason Ward, Principal Analyst at the Centre for International Corporate Tax Accountability and Research (CICTAR), who testified via video conference from Australia.
Jason Ward testified that his expertise is in tax havens and trusts, not in Canada’s Conflict of Interest Act, and that his research has focused on tax avoidance by Brookfield during the period when Prime Minister Mark Carney was its chair, as well as by several of Canada’s largest public pension funds. He argued that the use of tax haven subsidiaries and trust structures can shield public office holders from having their income taxed as intended, and stated that blind trusts are not an appropriate mechanism because a public office holder can still benefit from profits derived from actions taken on their behalf, even without knowing the details. Ward recommended that Canada adopt a public country-by-country reporting regime similar to Australia’s, requiring multinationals with over $10 million in revenue to disclose financial details in 40 tax haven jurisdictions, as transparency is the first step to fixing the problem, and he noted that such disclosure in the European Union led to reduced use of tax haven subsidiaries and increased tax payments. He disagreed with the suggestion that blind trusts are sufficient, arguing that liquidating assets and placing proceeds in a blind trust would better address the issue, and he agreed that banning the use of tax havens by public office holders could increase transparency.
Ward further testified that large IT firms and big pharma are the most aggressive sectors in tax avoidance, citing Microsoft facing a $30 billion U.S. tax bill and the six largest U.S. pharma companies paying negative tax over two years. He stated that Brookfield’s tax gap—the difference between taxes paid and what would have been paid at the statutory Canadian rate—was over $6.5 billion between 2017 and 2021, making it Canada’s largest or among the top corporate tax dodgers, and that Brookfield uses a complex web of foreign subsidiaries in Bermuda and the Cayman Islands to avoid taxes. He agreed that there is a serious credibility problem when the Prime Minister has led a company engaged in aggressive tax avoidance, and that there is a moral obligation for a leader to set a high standard of transparency and contribution to public services. Ward recommended that Canada take a leading role in driving domestic and international tax reforms, including not backing down on the digital services tax and not allowing U.S. companies to avoid the global minimum tax, and he suggested that the blind trust mechanism requires a serious review.
During the meeting, there was a point of order from Liberal member Leslie Church questioning the relevance of questioning about Brookfield’s tax dealings to the study of the Conflict of Interest Act, which was countered by Conservative members who noted that “tax havens” is specifically spelled out in the motion under study.
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