REPORT: Moneybags Morneau’s Former Company Could Benefit From His Overseas Tax Decision

By refusing to crack down on big corporations stashing cash overseas, the Trudeau government is breaking a promise and could help benefit Morneau-Sheppell, the firm that made Moneybags Morneau rich.

As noted by Global News, “By funnelling their international profits to Barbados-based subsidiaries, corporations can take advantage of the country’s ultra-low tax rates (as low as one to 2.5 per cent) and lack of transparency on corporate ownership. Then, thanks to the treaty, they never have to pay the much higher Canadian corporate rates when the income is “repatriated” back home.”

“A tax treaty negotiated by Ottawa in 1980 makes setting up subsidiaries in Barbados very attractive to Canadian companies, for instance, and the island remains a favourite destination for corporations like Morneau Shepell. Overall, Canadian corporations held nearly $80 billion in assets there in 2015.”

Morneau is now leading the group that will decide on changes to the rules governing companies stashing money in foreign countries to save on taxes. And while he has no formal connection to Morneau-Sheppell, he may still have shares in a blind trust.

According to the report, “But regardless of his now-severed links to his family’s business, some of Morneau’s decisions as finance minister may now be benefiting the company’s subsidiary down in the Caribbean — or at the very least affecting it, which presents the real possibility of a conflict of interest.”

Is it a Conflict of Interest?

Strangely, Morneau-Sheppell wouldn’t comment on whether Moneybags still has shares in the company, and his past connection to the company raises serious questions about a potential conflict-of-interest, given that he is the one who could regulate it and control any changes that would impact the use of offshore subsidiaries.

As Dennis Howlett of Canadians for Tax Fairness said, “There are special arrangements for Barbados that in our view, are not good. And if he is involved in making decisions about the Barbados tax treaty, that could be a conflict,” said Howlett.

One set of rules for the elites, another for the rest of us

Ironically, Morneau has pointed out that any changes to overseas tax treaties shouldn’t be rushed and may take some time. This is yet another example of how the elites operate under one set of rules, while the rest of us operate under another set of rules. Morneau has tried to ram through tax hikes on Canadian small businesses with less than three months of consultations, yet he gives his fellow elites all the time in the world when a tax change may impact them, and it’s likely he won’t even do anything about it.

So, while Moneybags Morneau goes on and on about “tax fairness,” he refuses to crack down on the big corporations and super-rich elites who are using foreign countries to pay fewer taxes.

Disgraceful.

Spencer Fernando

Photo – YouTube

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