Good afternoon, my name is William Ross.
Mr. Chair, members of the Standing Committee on Finance, good afternoon. I am the co-ordination officer of the Collectif Échec aux paradis fiscaux, which represents more than 1.7 million members from unions and civil society in Quebec.
As part of the consultations of the Standing Committee on Finance, the collectif has been exploring a way to increase government revenues. Given the current emergency, we believe the government has the legitimacy and public support to deliver on two key promises in its own 2019 election platform: ending the use of tax havens and imposing a tax on web giants. We don't rule out the use of a wealth tax, but that will require creating guarantees that these wealthy individuals won't be able to take advantage of existing tax loopholes.
According to the Office of the Parliamentary Budget Officer, Canada estimates that between $19 billion and $26 billion are lost each year because of unpaid taxes, tax evasion and tax avoidance. The Tax Justice Network also estimates, according to the latest figures released last week, that Canada loses $5.75 billion annually because of illicit international flows, representing 20% to 25% of the Canadian tax gap.
At a time when Canada and the world are facing an unprecedented crisis and the public deficit is at an all-time high, it is more than necessary for Canada to make it a priority to fight tax fraud before considering charging taxpayers or cutting programs and services to our already hard-pressed communities. However, the health crisis has highlighted some clear vulnerabilities in Canada's tax transparency and justice policies.
Members will recall that in May 2020, Canadians asked the government to follow Denmark's example by not injecting public funds into companies that use tax havens in their tax strategies. The government couldn't listen to that recommendation. How could it have, since we don't have the proper tools in Canada to know who is using shell companies and for what purpose? We believe it's imperative that the government establish a registry of actual beneficiaries. Innovation, Science and Economic Development Canada held consultations on this issue last year. Unfortunately, nothing has been done since then. To prevent the government from injecting public funds into companies that do not comply with our own tax laws, it's imperative that we have the means to properly map company structures and establish the identity of individuals who benefit from public assistance programs.
Members will also understand that 2020 was an opportunity for an unprecedented expansion of the digital economy. As such, the government's broken promise to introduce a tax on the digital economy and diverted profits by April 1, 2020, was an incredible missed opportunity to ensure that Amazon and similar companies pay their fair share and contribute adequately to the Canadian economy, particularly in times of crisis.
The repeated failure of the OECD negotiations is really the last straw. So we are asking that Canada implement such a tax without delay, in order to recover the lost money.
With regard to foreign direct investment in tax havens, an already well-known trend continued in 2020. In fact, foreign direct investment increased by 3% last year, for a total of 135% over the past decade. Canadians continued to put money into the 12 most influential tax havens. In total, according to Canadians for Tax Fairness, $380 billion is being taken off the tax rolls and allowed to enter the country with impunity. We believe it is absolutely essential that the government curb double non-taxation practices and review its international tax policies and its participation in certain existing tax treaties.
In conclusion, the Collectif Échec aux paradis fiscaux remains convinced that the best thing to come out of the current crisis would be a Canadian economy driven by a desire for tax justice, which would put an end to the harmful practices that have been put in place over the years. This is an opportunity for the government to have all the levers in place to create that change. We encourage the government to act responsibly. As such, I will provide the clerk with a brief of our 12 recommendations, as we have already submitted them during the pre-budget consultations.
Thank you very much.