Thank you. I’ll try to be quick.
There is no single solution to combatting tax havens, but diplomatic and geopolitical factors are certainly major issues. I think it is perfectly normal to discuss the issue of tax havens in the Standing Committee on Finance, but I also think it should be discussed in the Standing Committee on Foreign Affairs and International Development.
It is important to understand that companies are created under the law. For a company to exist, a state must have made it possible through legislation. Take the example of how the law is drafted in a tax haven like Bermuda. The Bermuda legislature passed legislation that allows the creation of tax‑exempt entities. Under Bermuda law, a tax‑exempt company can receive enormous benefits, such as pay no tax, demonstrate a lack of transparency about the identity of beneficiaries, have the potential to carry out an infinite number of transactions in all kinds of sectors, and so on. Tax‑exempt companies are allowed, provided they do not have any activities in Bermuda. In other words, Bermuda makes laws that allow commercial entities to manage capital that must be located outside the country’s borders.
That is literally political interference. This is a state making laws about how to manage capital generated outside its borders. That should be enough for Canada and other countries like France, Spain and Germany to intervene with this state. We are talking about Bermuda, a jurisdiction with an administrative structure the size of the Saint‑Jérôme municipal council. States should put pressure on Bermuda’s legislative body, and make it understand that this legal provision is an intrusion and that they are challenging it politically. Possible sanctions must also be considered.