Ontario wants Ottawa's help to clamp down on corporate tax dodging

TORONTO – Ontario is urging the federal government to help them clamp down on corporate tax dodging.

Ontario Finance Minister Charles Sousa is asking for help to close loopholes that allow corporations to avoid paying taxes by shifting their profits and losses across Canada.

He says it could bring in $200 million by 2017, according to the commission that made recommendations last year on how Ontario could slay its $12-billion deficit.

In his letter to Finance Minister Jim Flaherty and Revenue Minister Gail Shea, Sousa says some companies also shift profits earned in Ontario to foreign subsidiaries to avoid paying tax.

Sousa says he also wants federal help to crack down on the growing underground economy, which deprives the province of tax dollars and makes it difficult for legitimate business to stay competitive.

The province needs Ottawa’s help because the federal government collects about 75 per cent of Ontario’s tax revenues.

“Further progress in enhancing the integrity of our tax system is in our mutual interest and requires continued collaboration,” Sousa wrote in the letter Friday.

He said he hopes Flaherty will consider his suggestions as he prepares to deliver the federal budget next week.

Going after corporate tax evasion is among the priorities the governing Liberals set out in their throne speech in February.

It’s also among the measures Ontario’s New Democrats are demanding if the minority Liberals want their support to pass the upcoming budget and avoid an election.

They want the Liberals to stop allowing large corporations and banks from claiming sales tax rebates for expenses like meals, entertainment and vehicles. The NDP say it would save $1.3 billion a year.