Canadians Need to Know Snow-washing

Us Canadians need to live up to the stereotype that we are a nice, peaceful, and safe country. Clearly the so-called trucker protest tarnished our reputation, but in financial circles our reputation is tarnished thanks to our neglect of corporate accountability. Internationally Canada is seen as a great place to launder illegal obtained funds akin to third world tax havens. Laundering money in Canada is known as snow-washing.

Thanks to excellent research to Transparency International Canada (and more organizations) we finally know the extent of snow-washing. In order to address the problem we must first understand it. So let’s hope Canadian politicians step up to fight this corporate corruption in our government.

Although Canada has vowed to establish a publicly accessible corporate beneficial ownership registry, a database that will store details about who ultimately owns and controls millions of private companies, it won’t be operational until at least 2025.

“Open data allows journalists, civil society and other stakeholders to investigate wrongdoing,” the report says. “This is particularly important for Canada, where law enforcement and regulatory authorities have limited capacity to investigate domestic crime, let alone criminal activity beyond our borders.”

As an example, one of the report’s case studies about a Russian transnational laundromat builds on previous reporting by investigative journalists, including The Globe’s Mark MacKinnon.

For far too long, Canada has been saddled with a reputation as an international haven for financial crime. As the report rightly argues, transparency is the only antidote.

Read more.

Read the snow-washing report.

Thanks to Delaney!

Pandora Papers Resonate in Canada

The Pandora Papers were released just last week and they are already having in impact in Canada. The non-profit Canadians for Tax Fairness is pushing the recently elected politicians to get on closing loopholes and exploits that only the rich get to use. All parties support tax reform to address the growing wealth divide in the country, and with the Pandora leak the need for tax reform is clear. Two Canadian celebrity athletes were exposed in the financial papers leak, which has hurt their reputations.

Support for tax fairness in Canada appears overwhelming. Eighty-nine per cent of Canadians want to see a wealth tax of one per cent paid by the richest Canadians as part of the country’s pandemic recovery, according to a recent Abacus Data pollbased on the NDP’s 2021 platform, and 92 per cent support closing tax loopholes and making it harder for corporations to strategically book profits in tax havens.

“There seems to be universal acknowledgment across the parties that economic inequality is a problem, and it’s a problem that requires government action,” said Cochrane.

In a blog post for C4TF, Cochrane outlined policies the major parties could work together on, based on similarities between party platforms, and identified an excess profits tax as one possibility.

Read more.

Opening A Pandora’s Box of Elite Financial Trickery

money

Yesterday the Pandora Papers were released to the public by a team of investigative journalists. It exposed how 35 world leaders and 300 other public officials used complex financial arrangements to not pay taxes and avoid potential corruption charges. While the rest of us get in trouble for not paying taxes, the elite continue to eschew taxes by using offshore accounts and a constant movement of money only the wealthy can afford.

It’s important to expose this behaviour of the rich to show they aren’t above the law nor can the mooch off the rest of us by using services our taxes provide while not paying their share. What’s more, it’s the elite who contribute the most to climate change yet they hog all the money to solve the issue.

Let’s keep looking into their financial management.

Much like the Panama Papers leak in 2016 or the Paradise Papers the following year, the secret files provide a behind-the-scenes glimpse at how certain global elites — or in other cases, high-profile criminals — take advantage of financial wizardry or opaque corporate structures to either shield assets, wriggle out of their tax obligations, or hide wealth entirely.  

“When we published the Panama Papers a few years ago, there was a lot of outcry around the world saying that this was a system that needed to end,” said Gerard Ryle, the ICIJ’s director. “But we’re now seeing the very people who could end the system … themselves benefiting from it.” 

Read more.

Time for a Tobin Tax on Financial Transactions

computer screen

High frequency trading increases volatility in stock markets and mean that only those with access to high-powered computers can compete. This is not good for long-term thinking and means that what a company actually does is irrelevant to the stock performance – contradictory to claims about how the market ought to work. Enter the concept of a Tobin tax. In the US, the Congressional Budget Office proposed that such a tax can make a massive and positive difference for the government and society at large.

So how much would this tax on Wall Street raise? Even accounting for certain other revenues that would go down as a result, The CBO says that “This option would increase revenues by $777 billion from 2019 through 2028.”

In other words, you could raise nearly $80 billion a year over the next decade with a small tax that is well-targeted to the investor class, and which would have the salutary effect of discouraging a practice that already serves to rob the public. To give just one example for context, you could fund virtually the entire federal food stamp program with this financial transactions tax.

Read more.

Microfinance in New York City

Microfinance has been working very well in the developing world as a way to support people in creating better opportunities for themselves and their communities by providing a small amount of money for projects. People who would otherwise be rejected for a loan can qualify for a microloan and then use that money to start a business.

Now programs in New York City are helping people in poverty start small business to better themselves.

Fortunately, she found Project Enterprise. The $1,500 loan she received allowed her to get a license and purchase the equipment to start grooming pets in her apartment. With this increased offering of services, the income of Bridgette’s business more than doubled. She has already taken out a second loan to buy equipment to let her handle more pets, and is now planning for her third loan, to take the next step and expand into an actual storefront

Read more at the blog of the Grameen Foundation.

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