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posted by Robert

Canada probing Barbados Offshore Investment tax losses

Largest Canadian Labour Union calls Barbados “Tax Haven” a “problem”

An article at the Toronto Sun news agency says that a Canadian House of Commons committee recently began probing offshore accounts and tax evasion. Some Canadians are concerned that Canada’s government is “missing out on billions in potential revenue” because of low tax countries. The article names Barbados, Bahamas and the Cayman Islands.

“I was really struck to the extent to which this trend seems to be increasing when we were assured it was less of a problem… This money is not going into investing in real activities and in growing the (Canadian) economy.”

…Toby Sanger, Canadian Union of Public Employees CUPE senior economist. CUPE has almost 600,000 members and is Canada’s largest workers’ union.

This is serious business for Barbados because our national economy and well being are highly dependent upon that offshore investment from Canada. Not only that, our tourism industry is also closely linked with the offshore banking and investment sector. Many Canadians and other tourists who head for Barbados in the winter are coming for their “annual shareholders meeting” that just happens to be scheduled every year in the middle of the coldest winter months.

And don’t kid yourself that it’s about all offshore jurisdictions: Barbados is a big big player in Canadians’ offshore tax strategies. I once heard it said that Barbados is the #1 Caribbean country for Canadian offshore banking and companies. I don’t know if that is still true, but Barbados is big enough that we are squarely in the sights of those who want to curtail the ability of Canadians to pay lower tax rates.

All Hands on Deck!

The Toronto Sun article seems to be a balanced piece that gives both sides of the Canadian debate. There is a side that says offshore banking and corporate centres like Barbados actually benefit the Canadian economy by allowing Canadian companies to be competitive in the world markets.

The danger for Barbados is that in bad times governments can get focused only upon revenues and lose sight of the big picture.

As we’ve seen occasionally in Barbados, governments can raise taxes too much and ‘kill the goose’. Some Canadians want their government to restrict access to offshore banking centres like Barbados, and don’t realize this would harm Canadian industry in the long run.

Let’s hope that our government acts decisively and swiftly to convince the Canadian Government, tax authorities and Canadians in general that both countries greatly benefit from our long standing relationship and the agreements that allow both Canada and Barbados to prosper in the world economy. We are both lesser without each other.

Further Reading

Please read the article at the Toronto Sun, but we’ll reprint it here because sometimes articles go missing in cyberspace and then we have nothing to support our fair commentary.