MONTREAL — Prime Minister Justin Trudeau said Wednesday the international community has to work together to make global finance more transparent to prevent the sort of inequality highlighted by the so-called Panama Papers scandal.
Otherwise, rich investors will simply “hop” around to favourable jurisdictions where they can avoid paying tax, Trudeau said.
“The level of awareness that citizens of the world are beginning to take in regards to tax avoidance and evasion is good thing,” Trudeau said in his first public comments on the controversy. “But it’s certainly something that we will be working on together as a community of nations.”
Related reading: Canadians are right to be angry
The federal government knew tax avoidance was a problem long before the scandal put offshore havens in the headlines, he added.
Trudeau was asked about the matter in Montreal, where the annual general meeting of the Royal Bank of Canada — the only Canadian banked linked to the data leak — was also taking place Wednesday.
RBC CEO Dave McKay said he couldn’t comment on the specific information leaked. But he said the bank is reviewing its files in an effort to verify to determine whether any wrongdoing took place.
Related reading: Why do the rich hide money offshore?
“This information … goes back 40 years,” McKay told shareholders. “So you can imagine how difficult it is to go back in your file 40 years.”
He defended the bank’s processes to detect and prevent tax evasion, adding that it operates within the legal and regulatory framework of every country in which it operates.
Media reports say the bank and its subsidiaries used Mossack Fonseca, a Panamanian law firm at the centre of the data leak, to set up more than 370 shell companies.