THE FALLOUT IS still being experienced from last year’s release of the so-called Panama Papers, a treasure trove of legal documents that purportedly showed how foreign leaders had socked away millions of dollars in low tax jurisdictions like Panama, Luxembourg, Switzerland, Barbados, Ireland, the Bahamas and Bermuda.
It is very likely that the voluminous and inaccurate references to Barbados as a tax haven contributed to last year’s nine per cent decline in the assets of offshore banks in Barbados as disclosed in the recent Central Bank report. Canada and its global banks, large corporations and wealthy individuals are a prime and lucrative market for Barbados’ offshore sector.
Without the North American economic colossus Barbados’ offshore business would be a shell of what it is today. Just last year, Canadians for Tax Fairness, an advocacy group, estimated that CAN$9 billion (BDS$13bn) passed through Barbados in 2015. Although no one knows for sure how much money is salted away in that fashion, the figure suggests that Canada is a lifeline to our economic health.
Yet, apart from frequent denunciations of the unfair “tax haven” label often articulated by Donville Inniss, the Minister of International Business, there is little, if any evidence, that our diplomatic outpost in Ottawa is doing much to present our case to the Canadian public so that people and institutions there would know the facts.
Our high commission and consulate general in Toronto have become voiceless and invisible in our defence as the negative picture of Barbados is painted in and out of the media. Those offices should be on the frontline of our defence but complaints suggest too many calls to those offices go unanswered and there isn’t any apparent programme of activity to defend our cause. Perhaps, they have fallen asleep at the switch.
There is also an urgent need for a strategy to combat the looming international campaign the Justin Trudeau administration plans to launch to make tax evasion and avoidance a global hot-button issue. For his part, Prime Minister Trudeau is spending CAN$800 million over five years to get the Canadian Revenue Agency to go after “tax havens” that allow citizens to hide billions every year.
Barbados is a special target of tax watchdogs and Canadian government critics in and out of Ottawa. For instance, Bloc Quebecois has introduced a parliamentary bill to change a 1980 Barbados-Canada agreement that allows Canadian firms with corporate entities in Barbados and Canada to pay taxes here at a rate of less than three per cent instead of the higher Canadian rate.
Unfortunately, our diplomatic offices in Canada aren’t up to the task of dealing with these complex issues. It’s a price we are paying for sending ineffective political appointees to key centres to represent our interests.
What is hypocritical about many of the attacks on Barbados in Canada and next door in the US is that the two North American countries are large tax havens, even bigger than Barbados.
