[Canada] CRA targeting mining-sector tax havens – by Nelson Bennett (Business Vancouver – August 5, 2015)


Tax evasion by Canadian companies using offshore havens promises to become election issue

Canadian corporations that use tax havens like Switzerland and the Cayman Islands to reduce the taxes they pay at home have good reason to worry.

The Canada Revenue Agency (CRA) has been stepping up its scrutiny of Canadian companies with offshore subsidiaries, as evidenced earlier this month when it was announced that Vancouver streaming company Silver Wheaton (TSX:SLW) is facing a potential reassessment that could cost the company more than $600 million.

It’s an issue that the Canadians for Tax Fairness and the Liberal Party of Canada appear to be hoping to make a federal election issue.

Tackling corporate tax evasion is one of the planks in the Liberal Party’s platform and has been raised in Parliament by Liberal national revenue critic Emmanuel Dubourg.

“It is unacceptable and unfair that CRA frightens and poorly serves honest Canadian taxpayers and it harasses charities for political reasons while leaving billions uncollected in tax havens,” Dubourg told Business in Vancouver by email.

Silver Wheaton is the second large Canadian mining-sector company in recent years to be placed in the CRA’s crosshairs.

Since 2008, Saskatchewan uranium miner Cameco Corp. (TSX:CCO) has been doing battle with CRA over $1.5 billion worth of taxes and penalties.

On July 6, Silver Wheaton announced it had received a proposal letter from CRA stating that, in the agency’s opinion, the company should have paid taxes on $715 million in income from the company’s subsidiaries in Barbados and the Cayman Islands between 2005 and 2010.

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