By Janet Mcfarland From The Globe and Mail

Canadians had $170-billion invested in the world’s top 10 tax-haven countries at the end of 2013, a 10-per-cent increase from a year earlier as growing sums flow into foreign investment accounts.

A new analysis by Canadians for Tax Fairness, an advocacy group promoting equitable tax reforms, says an additional $15-billion was “stashed” by Canadians in the 10 leading tax-haven countries last year, bringing total Canadian holdings in those countries to $170-billion by the end of 2013.

Most of that money is held in just three countries: Barbados, Cayman Islands and Luxembourg – where Canadians now have $124-billion invested, an increase of 188 per cent over seven years from $43-billion at the end of 2005. The analysis is based on Statistics Canada data on foreign direct investment abroad.

Dennis Howlett, executive director of Canadians for Tax Fairness, said the Canada Revenue Agency needs resources and political will to put a halt to money flowing into tax havens.

“This government can’t just shrug its shoulders and be outmanoeuvred by corporations and very rich people looking to get even richer at the expense of the rest of us,” he said.

His group estimates federal and provincial governments lose $7.8-billion in tax revenue each year because of money shifted to tax havens, which they argue could make a dent in budget deficits or fund numerous new government or social programs.

“The scale of the problem gets larger while the federal government cuts back on food safety, rail inspections and services for veterans and their families,” Mr. Howlett said.

The federal government pledged last year to participate in a campaign by Group of 20 member countries to share information to clamp down on people and companies evading tax through the use of tax havens. The group pledged to to share tax records by 2015 through automated links.

PHOTO: The Cayman Islands caters to offshore funds and companies.

(Shurna Robbins/NYT)

For more on this story go to: http://www.theglobeandmail.com/report-on-business/international-business/canadians-tax-haven-holdings-rise-10-per-cent-to-170-billion/article18400026/?cmpid=rss1

Related story:

Canadians have $170B in tax havens, says watchdog

By The Canadian Press From the StarPhoenix

The Cayman Islands are among the countries where Canadian firms and investors are increasingly directing their money.

Canadians’ use of tax havens for both legal and illegal purposes appears to be growing despite government efforts to curtail the practice, says a new paper from a taxavoidance watchdog.

Canadians for Tax Fairness says new data show the use of 10 offshore tax havens by Canadian firms and individuals rose to $170 billion last year, up $15 billion from the year before.

The data shows that Canadian money is flowing into tax havens at a faster rate than investment into non-tax haven countries.

The $170-billion figure almost certainly under-represents the problem, says executive director Dennis Howlett, since Statistics Canada has stopped tracking how much money is being stashed away in the Bahamas, which in 2010 held about $14.5 billion in Canadian money.

As well, Howlett notes that the reported figures only show money being reported and would not capture illegal activities.

The group estimates that federal and provincial governments are losing out on close to $8 billion in revenues from the reported use of tax havens alone.

The federal government has joined other advanced nations in efforts to cut down on tax avoidance and cheating, but Howlett says Ottawa hasn’t matched its rhetoric with action. He notes that Revenue Canada has seen deep cuts in staffing over the past few years as part of the government’s public service cutbacks.

The numbers show that about 40 per cent of all Canadian direct foreign investment is held by the finance and insurance industry and that the money flow is mostly into three offshore countries – Barbados, the Cayman Islands and Luxembourg.

IMAGE: The Cayman Islands are among the countries where Canadian firms and investors are increasingly directing their money.

Photograph by: David Rogers, Getty Images , The Canadian Press

For more on this story go to: http://www.thestarphoenix.com/business/Canadians+have+170B+havens+says+watchdog/9803624/story.html