Finance

The House of Commons Finance Committee met to study tax havens and their impact on Canada. Appearing as witnesses were Alain Deneault, a professor and author; Jason Ward, principal analyst at the Centre for International Corporate Tax Accountability and Research; Silas Xuereb, an economist with Canadians for Tax Fairness; and Sasha Caldera, campaign director for the Beneficial Ownership Project at IMPACT.

Alain Deneault described six social costs of tax havens, including lost tax revenue, pressure to lower corporate rates, increased debt servicing, higher taxes on the middle class, cuts to public services, and user fees for services. He argued that the problem is political and diplomatic, not technical, and called for Canada to pressure jurisdictions like Bermuda that legislate to allow tax-exempt entities managing capital generated elsewhere. He recommended taxing multinationals based on their consolidated global balance sheet, rather than on fragmented national subsidiaries, and disagreed with the OECD’s technical approach, calling it insufficient.

Jason Ward stated that tax havens are a huge problem for Canada, citing a Tax Justice Network estimate of $27.3 billion U.S. in lost tax revenue from 2016 to 2021. He urged Canada to follow Australia’s model and implement full public country-by-country reporting for multinationals, arguing that transparency is a crucial first step to fixing the problem. He noted that Brookfield Corporation has been one of Canada’s largest tax avoiders, funnelling operations through Bermuda with a very low effective tax rate, and that no effort to reduce tax haven use was evident after Mark Carney became its co-chair.

Silas Xuereb said tax havens destroy a level playing field, as megacorporations and the ultra-wealthy can shelter income while working Canadians and small businesses cannot. He noted that Statistics Canada data shows Canadian multinationals and wealthy individuals held over $682 billion in 15 tax havens in 2024, a 165% increase over a decade. He recommended closing the loophole that allows profits from tax havens to return to Canada tax-free, expanding public country-by-country reporting, and supporting a strong UN tax convention now that OECD processes have stalled.

Sasha Caldera focused on the role of anonymous shell companies in tax evasion and money laundering, noting that Canada’s 2025 money laundering risk assessment found corporations have a very high vulnerability. He praised Canada’s launch of a public beneficial ownership registry in 2024 and called for a pan-Canadian agreement among federal and provincial finance ministers to align provincial registries with the federal system, closing weak points. He argued that transparency-oriented policy tools are the best deterrent against tax evasion and money laundering, which artificially inflate housing costs and harm communities.

After the witnesses concluded, the committee debated a motion by Bloc Québécois member Jean-Denis Garon to invite the Parliamentary Budget Officer to discuss the budget and capital investment methodology before studying the budget implementation bill. Following debate and a proposed amendment by Liberal member Ryan Turnbull to also invite former PBO Kevin Page, the committee reached a consensus. The motion was amended to delete the preamble and specify that the PBO’s testimony would be considered part of the budget implementation act study, and the amended motion was adopted.