Thanks, Madam Chair.
My name is Silas Xuereb, and I'm an economist and policy analyst with Canadians for Tax Fairness. I'll begin my remarks today by explaining why we think that tax havens matter. I think that the use of tax havens matters because they destroy any semblance of a level playing field in the economy, and Canadians are aware of this.
On a radio show during the election, when Brookfield was the talk of the town, a host asked me why it was legal for megacorporations and the ultrawealthy to shelter their income abroad but not for working Canadians and small businesses. Afterwards, I felt a bit ridiculous because I tried to explain that, well, technically the laws apply equally to people like us and megacorporations. She's right. What does it matter if on paper the same laws apply if one group has millions of dollars to hire expensive lawyers to exploit the laws to the maximum, and the other group doesn't even know the laws exist? This needs to change.
Our tax laws, other witnesses have mentioned, should be based on clear principles that are openly and democratically debated. For this, we need transparency. We need to know how much revenue is being lost and where. We need to understand the latest strategies that multinationals are using to avoid taxes.
Right now, unfortunately, it's really difficult to estimate precisely how much profits are shifted abroad every year and how much tax revenue we're losing. A Tax Justice Network report estimated that Canada loses about $15 billion in tax revenue a year to corporate profit shifting and undeclared offshore wealth. Again, it's uncertain, but if this is accurate, this is enough revenue to fully fund the long-awaited single-payer national pharmacare program and our recently implemented dental care program.
Canadians deserve better than the system as it is. We deserve to see the data for ourselves. We deserve a tax system where the spirit of our laws is upheld rather than just the letter. Of course, some meaningful reforms like the Global Minimum Tax Act and reforms to the GAAR have been implemented over the past few years. These are welcome steps but, from the data currently available, there's no evidence that the problem is getting better. In fact, it's only getting worse.
StatsCan data shows that in 2024, Canadian multinationals and wealthy individuals held over $682 billion in 15 tax havens alone. This is a 165% increase over the past decade. In case there's any doubt as to whether this is real, tangible investment, Canada has more investment in these 15 tax havens, which are home to only about 50 million people, than the rest of the world combined if we exclude the United States, where over 7.5 billion people reside.
What can we do to fix this? We can close the loophole that allows corporations to return profits from tax havens to Canada tax-free. I think this has also already been mentioned in this committee. This favourable tax treatment was originally restricted to countries with which Canada had a comprehensive tax treaty, but a regulatory change in 2009 opened the door to much wider tax avoidance by extending this favourable treatment to countries with which we only had a tax information exchange agreement, which is a much simpler document that doesn't ensure alignment between our tax systems. We can also expand transparency through public country-by-country reporting, another thing that's come up already. Again, this is something that's already been implemented by the EU and Australia. Third, we can support international processes to establish fair global standards for taxation. Now that the OECD process has stalled out, as we've already heard as well, we need to support a strong and fair UN tax convention. Negotiations for that are currently under way in Nairobi, and Canada should be supporting those as much as they can.
I'll leave it there for now. I look forward to your questions and to going into more detail.