Paradise Papers: CRA to investigate new evidence of tax evasion -

Paradise Papers: CRA to investigate new evidence of tax evasion

Massive records leak dubbed the Paradise Papers reveals how wealthy, including Canadians, stash money in offshore accounts to avoid paying taxes


OTTAWA – The Canada Revenue Agency says it won’t hesitate to investigate new evidence of offshore tax evasion in the wake of a second massive leak of tax haven financial records.

The leak of some 13.4 million records, dubbed the Paradise Papers, lifts another veil on the often murky ways in which the wealthy – including more than 3,000 Canadian individuals and entities – stash their money in offshore accounts to avoid paying taxes.

Among the names that pop up in the records with some connection to offshore accounts are former Canadian prime ministers Brian Mulroney, Paul Martin and Jean Chretien, the Queen, U.S. commerce secretary Wilbur Ross, and the past and current chief fundraisers for the federal Liberal party.

Neither the CRA nor any court has determined the Canadians did anything wrong.

Offshore accounts are used by wealthy individuals and corporations around the world as a perfectly legal way to reduce their tax burden, although the anonymity provided to account holders has also led to associations with tax evasion, money laundering and organized crime.

RELATED: Canada’s record on finding tax evaders is dismal

The Paradise Papers were obtained by German newspaper Suddeutsche Zeitung and the International Consortium of Investigative Journalists, including CBC/Radio Canada and the Toronto Star which published details on Sunday.

The media outlets did not disclose how they acquired the documents, which consist primarily of client records of offshore law firm Appleby, as well as some records from offshore corporate services firms Estera and Asiaciti Trust.

In an apparent attempt to pre-empt the news reports, the CRA issued a statement last Friday, detailing the agency’s efforts to crack down on tax evasion and tax avoidance, which intensified following the first huge leak of tax-haven records, known as the Panama Papers, in April 2016.

The agency said it’s invested $1 billion to tackle the problem and currently has more than 990 audits and more than 42 criminal investigations underway related to offshore tax havens.

As a result of audits over the last two years, the CRA said it identified some $25 billion in unpaid taxes, interest and penalties. And last year, it levied more than $44 million in penalties on tax advisers who facilitated non-compliance with Canadian tax laws.

The agency said it’s also working closely with 36 other countries in the Joint International Taskforce on Shared Intelligence and Collaboration on more effective ways to detect and deal with tax evasion and avoidance.

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Evidently anticipating Sunday’s release of the Paradise Papers, the CRA promised to do more should new details of questionable practices emerge.

“In the event that further details come to light, CRA will not hesitate to investigate and take further action as warranted,” the agency said.

“The government of Canada will continue to work with the provinces and territories, as well as other tax administrations and all other partners, to ensure a tax system that works for Canadians. In addition, the CRA will continue to build on its capacity to detect and crack down on tax cheats and ensure that those who choose to break the law face the consequences and are held accountable for their actions.”

A spokesman for National Revenue Minister Diane Lebouthillier, said on Sunday that “the CRA is reviewing links to Canadian entities and will take appropriate action in regards to the Paradise Papers.”

(Graeme Roy/CP)

(Graeme Roy/CP)

Tax avoidance measures involving offshore trusts are legal, provided that the trust is genuinely managed offshore and that Canadian taxes are paid on any Canadian contributions.

According to the Toronto Star and CBC/Radio Canada, the records suggest that Stephen Bronfman and his family’s Montreal-based investment company, Claridge Inc., were linked to an offshore trust in the Cayman Islands that may have used questionable means to avoid paying millions in taxes.

Bronfman is a close friend of Prime Minister Justin Trudeau, who tapped him in 2013 to fill the role of revenue chair – effectively, the chief fundraiser – for the federal Liberal party.

The offshore trust also involved former chief Liberal fundraiser and senator Leo Kolber and his son, Jonathan Kolber.

RELATED: Canada is tough on small-time tax fraud, but missing bigger targets

William Brock, a lawyer for Bronfman and Jonathan Kolber, denied any impropriety, telling the CBC that his clients “have always acted properly and ethically, including fully complying with all applicable laws.” Any suggestion of “false documentation, fraud, ‘disguised’ conduct, tax evasion or similar conduct is false,” Brock added.

The Prime Minister’s Office referred questions about Bronfman to the Liberal party.

Party spokesman Braeden Caley said Bronfman’s role is strictly a volunteer position devoted to fundraising, “not policy decisions.” The revenue chair is a “non-voting position” on the party’s national board, Caley added.

Conservative leader Andrew Scheer issued a statement on Sunday accusing Prime Minister Justin Trudeau of failing to crack down on “tax avoidance schemes used by his wealthy friends.”

“Justin Trudeau’s well-connected Liberal friends get away with paying less, and you pay more. There is nothing fair about that,” the statement said.


Paradise Papers: CRA to investigate new evidence of tax evasion

  1. One is sooo ignorant.

    Her Maj is taking the Sgt Schultz defence I see.

  2. It’s wrong but no laws are broken. That’s because our laws don’t reflect justice. They won’t as long as the corrupt make political donations that guarantee power. No politician or elite will do what needs to be done. Trudeau is more weak and naive than most.

    The elephant in the room is the ridiculous gap between the rich and the poor.

    Who can justify making 5 times the money of a full time worker, much less 500 times that the 1% make (5% of which don’t even have a job).

    Regulate wages in general and a living wage which reasonably increases to a limit based on effort, skill and innovation.

    Only that will change the perspective of the marginalized in society. It will close the gap.

    If the elite resist, put them in jail.

    • Drunk already? It’s only Monday!

  3. 1) The new Liberal bagmen…same as the old Liberal bagmen. The Liberal Party bought by the elites. It is not just their tax havens that Liberal governments protect, but the privatization bank is set to loot and asset strip Canada for the benefit of these elites. Guaranteed private profits about market, and any losses accrue to the Canadian taxpayer. That is the ONLY purpose of a privatization bank. Otherwise, it is completely unnecessary.

    2) Trudeau took the manager of the main Liberal hangout in Ottawa (a den of sexual harrassment, as we now discover) on his Aga Khan Caribbean vacation. Everyone now claims the Sargent Schultz defense.

    • Not Libs honey…..the Queen.

      • That will be the UK’s problem sweetheart. The CRA will be more interested in the Liberal bagmen who are avoiding Canadian taxes.

        • No, she”s our queen as well.

          Now stop blaming the Libs for everything that happens in the world.