POLITICS
04/29/2020 18:30 EDT | Updated 04/29/2020 18:53 EDT

Trudeau Refuses To Repeat Pledge To Cut Tax-Dodging Companies From COVID-19 Aid

Some MPs want a crackdown to help pay for new programs.

CP/Adrian Wyld
Prime Minister Justin Trudeau makes his way to his seat for a COVID-19 committee meeting in the House of Commons chamber on April 29, 2020 in Ottawa.

OTTAWA — Prime Minister Justin Trudeau sidestepped questions Wednesday on whether companies with offshore bank accounts will be eligible for emergency COVID-19 aid after previously telling MPs they won’t be.

Trudeau was pressed by MPs during the House of Commons’ special committee on the COVID-19 pandemic after he said Tuesday that the government will help those who need it, “but those who avoid taxes or evade taxes will not receive help.”

During Wednesday’s in-person sitting of the committee, Bloc Québécois Leader Yves-François Blanchet asked the government for assurances that companies that do not pay their fair share of taxes will be identified and deemed ineligible for emergency support programs.

“Companies who do practice tax avoidance will face consequences in our system,” Trudeau responded in French. “That will continue to be the case even when it’s not a pandemic.”

Watch: It’s easier to get rich in Canada than America. But it comes at a cost. Story continues below video.

 

MPs also gathered in the chamber to debate the Liberal government’s third piece of emergency legislation to approve $9 billion in funding for financial relief for students amid the novel coronavirus pandemic. 

With $155 billion already approved for the Canada Emergency Response Benefit and Canada Emergency Wage Subsidy, the opposition urged the government to crack down on companies that avoid taxes, some by using offshore tax havens, urging the government to make tax dodgers ineligible for financial aid

NDP Leader Jagmeet Singh picked up on the Bloc leader’s line of questioning, using Loblaw Companies Ltd. as an example of a business that uses international tax system loopholes to avoid paying more Canadian taxes.

The company is Canada’s largest food and drug retailer. It was the subject of scrutiny last year after the federal government pledged $12 million to upgrade its refrigeration systems to higher efficiency models — after the company posted a $754 million profit.

Andrew Francis Wallace via Getty Images
A Loblaws store in Etobicoke.

Recently, the Federal Court of Appeal overturned a 2018 tax court case that ordered Loblaw Companies Ltd. to pay $368 million in taxes. The federal government has been ordered to pay the company $1.8 million to cover legal costs related to the case.

Trudeau responded by chiding the NDP leader for suggesting that grocery store workers in Loblaw stores should be punished “because of behaviour of what their head office has done.” 

Singh responded later, saying it’s “unreal that this government thinks it’s OK to allow a company like Loblaws to use offshore tax havens.” The NDP leader said the problem is that the rules that allow companies evade taxes are legal, and the government isn’t doing enough to close loopholes. 

“That’s a choice. That’s a decision this government is making,” Singh said. He explained that one way of recouping this lost taxation is asking companies registered in offshore tax havens to remove their money from that jurisdiction and move it home if they want emergency aid.

Some European countries, such as Denmark, France, and Poland, have declared that companies registered in offshore tax havens will not be eligible for government assistance during the coronavirus pandemic.

A 2019 analysis by the parliamentary budget officer suggested the Canada Revenue Agency missed $25 billion in lost corporate income tax revenue because of offshore tax haven loopholes.

When the subject was posed to the prime minister last week, Trudeau said that the government has its priorities set on helping workers “and not the company.”

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