‘Corporate Canada's deal making needs more sunlight’

In a blog post published in Canada’s National Observer CICTAR’s Principal Researcher, Jason Ward, calls for greater tax transparency, and specifically for Canada to follow Australia’s example and to legislate for public Country by Country Reporting (pCbCR).

With a recent survey suggesting that nearly half of Canadians believe the Canadian Tax Agency is turning a blind eye to rich taxpayers and corporations, Ward argues that the federal government would do well to heed public sentiment and mandate tax
transparency.

As Ward explains, tax dodging by the largest multinationals undermines support and trust in the tax system, because most Canadians don’t have the ability to shift their income offshore.

“The Canadian government must not bow to corporate pressure — or President Donald Trump — and instead ensure that profits earned in Canada are taxed in Canada. It is a simple matter of sovereignty. Carney caved in to Trump and repealed the digital services tax, and yet Canada was still whacked with US tariffs.  The G7’s recent agreement in Canada to exempt the US from the negotiated multilateral agreement on a global minimum tax is another huge mistake. Trump ended progress on multilateral efforts to tackle corporate tax dodging and is now attempting to run a protection racket for tax-dodging US multinational corporations. Canada must chart its own course”.

Fortunately, groundwork has already been laid in Australia and the European Union (EU), which have moved towards tax transparency through legislating for versions of public Country by Country Reporting (pCbCR). Canada loses between $15 and $30 billion in annual tax revenue due to profit shifting and a recent study by Canadians for Tax Fairness shows the abuse of tax havens is on the rise. If Canada were to adopt an Australian-style pCbCR, all Canadians would know what corporate income taxes are paid — or not paid — by multinationals operating there, as well as where profits may be shifted.