Ottawa Senator fans listen up: you may want to pay attention to the new hidden-camera investigation on tax-evasion and offshore banking from one of our national broadcasters.
You may end up losing your team to the Canadian Revenue Agency (CRA).
The financially peculiar end of the Senators may not be as far-fetched as you think. And it's all because of a place where not a single child plays shinny on a frozen pond in January.
Eugene Melnyk owns the Ottawa Senators. He's Canadian. He owns Canadian businesses, but lives in Barbados. He also owns Barbadian businesses and real estate in Barbados.
Sounds pretty innocuous, right? He's one of the richest men in Canada with a net worth of almost a billion dollars. What's so bad about him living the Canadian dream as he watches his own NHL team play on a Saturday night from his own bar near a beach in Barbados?
Here's where the CBC and the CRA come in.
With their recent bit of "hidden-camera" journalism, the CBC concluded that Barbados is a haven for Canadian corporate tax evaders. They argued that Barbados and Canada have long standing tax saving agreements (to promote foreign investment in the island), where instead of paying 30 per cent tax in Canada, Canadian companies could become "Barbadian" in name and residence only, and pay 2.5 per cent.
Sounds like a pretty good (and legal) deal, eh?
The problem is in May of this year, the Harper Government introduced measures to crack down on international tax evasion at a cost of 30-million dollars over the next five years. Moreover, the Government launched the Stop International Tax Evasion Program that will compensate "snitches" who "rat-out" people they know who are evading the CRA.
That's the part where all the ex-pat Toronto Maple Leafs fans in Barbados get really interested.
Whether or not Melnyk is (legally) avoiding Canadian tax rates is secondary to what troubles me about how the CBC is portraying Barbados.
The message the CBC is trying to get across is that Barbados, and by extension Barbadians, are trying to steal from the recession-hit pockets of "middle-class" Canadians.
Barbados is not a sleazy Caribbean backwater full of illegal, or barely legal, Canadian business men and women trying to hide the money they earned off the backs of the "Canadian taxpayer" in the omnipresent white sandy beaches that characterize the island.
By the CBC choosing to air the face of one black female Barbadian lawyer explaining to the undercover Canadian journalist how to capitalize on tax loopholes, they wrongly stereotype the legal profession in Barbados (and its legal professionals) as unscrupulous and deceitful.
Furthermore, Canadian business interests in Barbados and the Caribbean date well before the 1970s.
Since slavery, Canada (or British North America to be exact for those history buffs out there) had financial interests in the region trading cod fish for rum. Furthermore, the Bank of Nova Scotia had a branch in the Caribbean in the late 19th century even before they had one in Toronto.
During the early 1900s there were Canadian business organizations like the Canadian West Indian League that actively promoted investment in Barbados.
If Canada has been "hiding" money in Barbados for the past three hundred years (even before Canada was a country), why make it seem that it's the island's fault and not the owners of professional hockey teams?