Royal Bank of Canada has been ordered to divulge the real owners of 97 offshore corporations that used its services, but a critic is wondering why it’s taken the Canada Revenue Agency six years to acquire a fount of information that could help detect tax cheats.
The companies involved are all registered in the Bahamas, a tax haven, and originally came to light as part of a leak of financial records called Bahamas Leaks.
In submissions to the Federal Court of Canada, the CRA says most of the companies used tactics to “obfuscate the identities of the persons who truly control and beneficially own these entities,” and it wants to check whether the real owners are Canadians hiding money in tax havens.
“The CRA is concerned that any or all of these 97 Bahamian corporations may be controlled and/or beneficially owned by persons resident in Canada,” the agency says in a court filing.
Canadian individuals and corporations have $23 billion in declared, known funds held in or invested through the Bahamas — more than France, Spain and Portugal combined. A 2018 CRA study suggested Canadians have another $76 billion to $241 billion in undeclared, hidden wealth stashed in all offshore jurisdictions combined, but it didn’t break it down by country.
In May, a judge granted the federal government’s request for an order for Royal Bank and its RBC Dominion Securities subsidiary to provide any information that would help the CRA identify the owners of the 97 Bahamas corporations. The bank did not oppose the government.
The CRA says in its court filings that all the companies had investment accounts at Royal Bank or RBC Dominion at some point, “which suggests that they might be or have been controlled by persons resident in or situated in Canada.”
It’s not inherently illegal for Canadians to have an offshore account or company, but any assets over $100,000 and any income have to be reported for tax purposes.
CRA mum about other banks
CBC/Radio-Canada originally reported in 2016 that the Bahamas Leaks revealed that three Canadian banks had provided services to nearly 2,000 offshore companies in the Bahamas since 1990. The banks were what’s known as “registered agents” — licensed intermediaries who pay the annual fees to the Bahamas corporate registry, manage the paperwork and in many cases also incorporate the offshore companies.
The leaked files showed that Royal Bank acted as agent for 847 Bahamian companies listed in the leaked data, companies with names from Abbatis 1 Inc. to Yellow Jacket Holdings Ltd., while CIBC registered or administered 632 and Scotiabank handled 481.
Royal Bank didn’t answer questions from CBC News about the Bahamas corporations, but did provide a statement saying that in general, it has “high standards and an extensive due diligence process to detect and prevent any illegal activity occurring through RBC.”
Neither the CRA nor RBC would explain how the number of offshore companies of interest was whittled down to 97 from the 847 number. Some of that reduction is likely because even back in 2016, nearly half of those companies were already dormant or dissolved. It’s possible the CRA also determined that many of the companies had no Canadian shareholders or other ties to Canada that could lead to tax obligations.
There is no indication in the docket of the Federal Court that the CRA has also gone after any of the companies managed by CIBC or Scotiabank. It’s possible the tax agency obtained information directly and confidentially from those two banks using powers under the Income Tax Act that don’t require it to first get a court order, but it wouldn’t say.
“The CRA does not generally release information related to our compliance approaches, as it could provide a roadmap to non-compliance,” the agency said in a statement to CBC News. “As such, we are unable to confirm if the CRA will be seeking authorization to retrieve third party data from CIBC and Scotiabank.”
Toby Sanger, a senior policy adviser to the advocacy group Canadians for Tax Fairness, said the lack of transparency doesn’t help the impression that the CRA “seems to be more focused on going after the easy targets, the small-time individuals,” rather than the bigger and more complex cases of offshore tax evasion and avoidance.
“We shouldn’t just kind of write these carte blanche cheques allowing wealthy corporations and individuals with money in whatever jurisdiction they decide to park it in to avoid taxes,” he said in an interview.
The CRA, which proclaimed in the wake of other leaks, such as the Panama Papers and the Paradise Papers, that it was cracking down on offshore tax shenanigans, also wouldn’t explain why it’s only seeking ownership records for the 97 offshore companies now — six years after the Bahamas Leaks brought them to light.
“It’s very frustrating and disappointing that it has taken the CRA so long to act on these leaks,” Sanger said. “The slow action in this instance on the Bahamas Leaks means that they’re just kind of crying wolf, and that it’s more bark than bite.”
The Bahamas Leaks records were obtained by Sueddeutsche Zeitung, the same German newspaper that was leaked the Panama Papers, which then shared the files with the Washington-based International Consortium of Investigative Journalists and its network of global media partners, including CBC/Radio-Canada.
The Panama Papers emerged a few months earlier in 2016, but the CRA has yet to lay any criminal charges against anyone named in that leak. Other countries have already brought hundreds of charges and secured convictions.
The CRA received nearly $1 billion in extra funding between 2016 and this year to combat tax evasion and tax avoidance. In an email to CBC, the agency couldn’t point to a single criminal conviction it’s obtained in the last 4½ years that had to do with offshore tax evasion.
The agency said last week that at one point, it had five open criminal investigations stemming from the Panama Papers, but it subsequently dropped three. The two remaining cases appear to be ongoing probes into $77 million in alleged withholding-tax evasion in Vancouver, and an investigation into an Alberta oilpatch financier.
Indian government warns of rise in hate crimes, 'anti-India activities' in Canada – CBC News
The Indian government says there’s been a rise in “hate crimes, sectarian violence and anti-India activities” in Canada and is warning Indian nationals in the country, including students, to be on the alert.
The news release issued by the Indian Ministry of External Affairs on Friday did not say what prompted the warning. It said the ministry and Indian diplomats have brought several incidents to the attention of Canadian authorities. It also said the alleged perpetrators have not been brought to justice.
“In view of the increasing incidences of crimes as described above, Indian nationals and students from India in Canada and those proceeding to Canada for travel/education are advised to exercise due caution and remain vigilant,” the release said.
The release also did not point to any data or evidence of an increase in hate crimes.
CBC News has reached out to the Indian Ministry of External Affairs for more details but has not received a response. A number of Canadian federal government departments also have not responded to CBC’s queries.
Latest advisory for Indian Nationals and Students from 🇮🇳 in 🇨🇦 <a href=”https://twitter.com/cgivancouver?ref_src=twsrc%5Etfw”>@cgivancouver</a> <a href=”https://twitter.com/IndiainToronto?ref_src=twsrc%5Etfw”>@IndiainToronto</a> <a href=”https://twitter.com/MEAIndia?ref_src=twsrc%5Etfw”>@MEAIndia</a> <a href=”https://t.co/0YZo6KGZFU”>https://t.co/0YZo6KGZFU</a>
Earlier this week, Sikh organizers held what they called a referendum in Brampton, Ont. on whether there should be an independent Sikh state in northern India called Khalistan.
Proponents of Khalistan seek to establish a Sikh homeland in India’s Punjab region. The movement’s activities in Canada have caused tension between the Canadian and Indian governments, and also internally within the Liberal caucus.
Capt. Amarinder Singh, the former chief minister of Punjab, has even accused senior ministers in the Trudeau government of sympathizing with the movement — accusations they’ve denied.
The advisory was issued a day after an Indian government official condemned the Brampton vote in a news conference.
Arindam Bagchi, a spokesperson for the Indian Ministry of External Affairs, called it a “farcical exercise” and said it was held by “extremists and radical elements.”
Bagchi added that the matter has been brought up with the Canadian government through diplomatic channels.
“The government of Canada has reiterated that they respect the sovereignty and territorial integrity of India, and that they will not recognize the so-called referendum,” Bagchi said.
Statistics Canada said in a report earlier this year that there were 119 police-reported hate crimes in Canada targeting the South Asian population in 2020 — an increase of 38 incidents over 2019.
Police investigating vandalism incidents
Earlier this week, a Hindu temple in Toronto was defaced with the word “Khalistan” as well as “Death to India” in Urdu.
A spokesperson for Toronto Police told CBC News on Friday that the investigation is ongoing and they have not identified a suspect.
“The Hate Crime Unit has not seen a notable trend in hate crimes against people of Indian/South Asian descent,” the spokesperson said.
“We do understand that underreporting of hate crimes is a challenge and that the numbers reported may not accurately reflect what is occurring in our city.”
In July, vandals defaced a statue of Indian civil rights activist Mahatma Gandhi in Richmond Hill — again, with the word “Khalistan.” York Regional Police said they’re investigating the vandalism as a hate crime.
A spokesperson for York police told CBC News Friday that they have not identified any suspects yet.
Statement is intimidation, expert says
Chinnaiah Jangam, an associate professor of history at Carleton University who specializes in South Asia, said the threat to Indian nationals alleged in the advisory is exaggerated.
“Though there is a right-wing extremism asserting [itself in Canada], I don’t think there is any threat to any minorities here,” Jangam told CBC News.
He said the target audience for the advisory may not be Indian nationals in Canada but rather supporters of the ruling Hindu nationalist Bharatiya Janata Party (BJP) and its leader, Indian Prime Minister Narendra Modi — as well as BJP and Modi critics abroad.
“Most importantly, the issue of the statement has domestic implications in Indian politics,” Jangam said.
“It is for consumption of [Modi’s] own vote base in India, and also to basically suppress any sort of dissent toward India in North America.”
Jangam has reported being the target of harassment and threats over his criticism of the Modi government and the BJP.
Tensions between local Indian Hindus and Muslims in Leicester, U.K., boiled over into unrest last week. The BBC reports that authorities arrested 47 people in relation to the incident.
Jangam said Indian government officials may be reacting to the events in Leicester by looking to suppress criticism of the Indian government’s treatment of minorities.
“They are preparing some sort of ground,” he said. “It’s very concerning.”
Online news bill could revive local papers in Canada, MPs told – The Globe and Mail
Ottawa’s online news bill – which would force tech giants Google GOOGL-Q and Facebook META-Q to pay for reusing articles produced by Canadian news organizations – would help revive the flagging local news industry, spokesmen for papers across the country told a committee of MPs on Friday.
They said local papers, which have been closing across Canada, hemorrhaging staff and losing advertising revenue, could see a huge cash injection from tech giants and begin hiring again, if the bill becomes law.
“A weakened press, threatened with abandoning its mission and disappearing after decades of existence, is seriously endangering our democracy,” said Benoit Chartier, chair of the board of Hebdos Quebec, which represents the province’s independent local press. Mr. Chartier publishes a number of local papers, including Le Courrier de Saint-Hyacinthe, one of the oldest French language newspapers in North America.
Paul Deegan, president and CEO of News Media Canada, which represents big and small news organizations, said there is now a “significant imbalance of power between tech giants and Canadian news outlets.”
He said the bill would enable small papers to join together to negotiate deals with Google and Facebook, which has been renamed Meta, for using their content.
Facebook, Google and Apple have already signed some partnerships with news organizations in Canada, including The Globe and Mail.
The architect of a similar law in Australia, which Canada’s Bill C-18 is based on, told MPs that there has been a $200-million (Australian) annual injection into Australia’s news industry, since the law was introduced.
Rod Sims, who was chair of the Australian Competition and Consumer Commission when it implemented its news media bargaining code, said the law had prompted Google and Facebook to do deals with almost all news outlets in Australia, including small newspaper groups.
The law has also led the Guardian, a British news outlet, to expand its Australian operations and hire many more journalists, he said.
Mr. Sims, a professor at the Australian National University, said the code’s aim had been to address a massive imbalance in bargaining power between tech giants and media outlets that meant fair commercial deals could not be struck.
Like its Australian model, Canada’s bill would force the tech giants to do deals with news outlets and pay for posting news or links to articles, if they have not already done so voluntarily.
David Skok, founder & CEO of The Logic, an independent news outlet focusing on business and technology, said the bill is “a backstop forcing publishers and platforms to come to the table for fair, equitable, and transparent agreements that don’t privilege only those with negotiating power.”
But Prof. Michael Geist, an expert in internet law at the University of Ottawa’s law school, warned that the wording of Bill C-18 is flawed and likely to prompt legal challenges.
He said the bill contravenes several treaties, such as the Berne Convention, which aims to protect the rights of authors but allows the use of quotations, including those of newspaper articles.
“There is no question that this will be challenged on a number of different levels,” he told the Commons heritage committee.
Jen Gerson, an independent journalist and co-founder of the Line, an online newsletter, expressed fear that the bill would “backfire spectacularly.”
She said news publishers, rather than the platforms, benefit if Google or Facebook posts links to news articles. Ms. Gerson warned that Facebook and Google could respond to the law by “restricting access to mainstream news articles.”
Australia’s law led to a fierce backlash from the tech giants. Facebook protested by temporarily blocking news on its platform across Australia.
Google has written to each MP and senator saying there are multiple flaws in Bill C-18 as well as “misconceptions” about how an online-news law would work in practice.
The proposed law would prevent tech giants penalizing or giving preference to news organizations it has done deals with.
Google has said this could affect the way it ranks news on its search engine and moderates content. Currently the search engine elevates information from “trusted sources.”
Fiona smashes into Atlantic Canada, washing away homes and knocking out power – CBC.ca
Hundreds of thousands of customers in Eastern Canada are without power as post-tropical storm Fiona brings intense, hurricane-strength winds and torrential rains to swaths of Nova Scotia, Prince Edward Island, New Brunswick, Newfoundland and Quebec’s Magdalen Islands.
Part of the town of Port aux Basques, N.L., has been placed under an evacuation order after storm surge swept away multiple homes and structures to sea. It’s unclear if there are any casualties. The town has also declared a state of emergency.
Fiona made landfall in Nova Scotia shortly after 4 a.m. AT between Canso and Guysborough.
The Canso Causeway, which links Cape Breton to mainland Nova Scotia, is closed to high-sided vehicles.
As of 10:45 a.m. AT, more than 405,000 Nova Scotia Power customers were without electricity. The company says it has more than 525,000 customers. It said people can go the utility’s outage map for estimated restoration times.
- CBC Radio is providing live updates on Hurricane Fiona around the clock. Listeners are invited to call in to share their storm experiences and any emergency updates from their communities at 1-800-565-5550. Listen online via CBC Lite, which uses less data, or over the air (90.5 FM in Halifax, 92.1 FM in Sydney, 96.1 FM in Charlottetown or check your local frequency here).
P.E.I.’s Maritime Electric said more than 82,000 out of a possible 86,000 customers were without power.
N.B. Power was reporting more than 55,000 outages, concentrated in the province’s southeast. The outages are mostly in areas the company groups as “Shediac Cap Pelé,” “Moncton Riverview Dieppe” and “Sackville Port Elgin.”
Conditions are like nothing we’ve ever seen. We are logging reports of downed trees and wires but will only be responding to emergency calls. -Dispatcher Kelly ☎️ <a href=”https://t.co/gX7YPTPDSN”>pic.twitter.com/gX7YPTPDSN</a>
Newfoundland Power was reporting 1,133 customers without power, and Hydro Quebec reported 4,232 without power in the Gaspésie–Îles-de-la-Madeleine region and1,684 in the Magdalen Islands.
Hurricane or tropical storm warnings are in place throughout most of Atlantic Canada and southern Quebec.
State of emergency declared in Cape Breton
The Cape Breton Regional Municipality and neighbouring Victoria County have declared a local state of emergency and are asking residents to stay at home.
The Canadian Red Cross has opened a shelter at Centre 200 in Sydney, N.S., however it was without power on Saturday morning. The municipality is planning to open additional comfort centres when local travel is safe.
North Sydney fire Chief Lloyd MacIntosh spoke with CBC News as he was transporting a woman from her home to a safe location after the roof blew off her house.
“We pulled up, well, literally half of the roof was gone,” MacIntosh said. “It’s been an adventurous night to say the least.”
MacIntosh said there’s been a lot of damage in North Sydney.
“Every intersection, every block of North Sydney is filled with trees. Trees have come down on homes, trees have come down on cars, there’s buildings that have collapsed and there’s quite a bit of damages,” he said.
“The daylight will bring quite a few surprises for a few people.”
Part of a steeple came down from St. Joseph Church in Cape Breton Regional Municipality, a building that’s more than 100 years old.
Cellular networks spotty
Cellular networks were spotty across Nova Scotia and P.E.I. Saturday. Many were unable to get a cell signal to make calls or access internet.
Bell Aliant acknowledged the outages in a tweet posted Saturday morning. The telecom company they were working with utility companies to restore full power to their cellular sites as soon as possible.
“Numerous wireline and cell sites in Atlantic are impacted by power outages across the provinces. As battery back up power will begin to deplete, our teams will be activating generators to keep sites up and running,” the company tweeted.
Rogers also tweeted they are aware of the outages and their local crews will work to get services up and running.
CBC News has contacted Bell Aliant and Rogers for an update on restoration times.
Tree fell on fire truck with crew inside
Erica Fleck, the assistant chief of Halifax Regional Fire and Emergency, said a tree fell on a fire truck that had a crew inside. There were live wires.
She said the fire crew stayed in the truck as Nova Scotia Power technicians worked to get the crew out safely.
“The power lines are down everywhere,” she said. “It’s not safe to be on the roads.”
Fleck cautioned that response times will be longer because fire crews will have to remove downed trees that are in their way.
In a tweet, Environment and Climate Change Canada said the highest wind gust reported in Nova Scotia has been 179 km/h in Arisaig, north of Antigonish on Nova Scotia’s coast.
CBC meteorologist Tina Simpkin said wind gusts of 100 km/h were recorded in Moncton, N.B., shortly after 6 a.m.
Wind gusts of up to 100 km/h are expected in some areas of the province over the next 24 hours, with sustained winds clocking in at 65 km/h.
‘Like nothing we’ve ever seen’: Charlottetown police
In a tweet, Charlottetown police said they are logging reports of downed trees and wires but are only responding to emergency calls.
“Conditions are like nothing we’ve ever seen,” the force said in a post on Twitter.
CBC meteorologist Ryan Snoddon said the storm approached Nova Scotia at 64 km/h but slowed significantly as it arrived in the province. This will be a long-duration event for P.E.I. and eastern Nova Scotia, he said.
By 9 a.m., the centre of the storm will be moving to the western side of Cape Breton and it will slowly depart Nova Scotia.
Winds will ease in mid-to-late morning for central Nova Scotia and late afternoon or evening for eastern Nova Scotia, he said.
Nova Scotia Power’s efforts to restore electricity are being hampered by strong winds.
“We’re still seeing significant wind gusts, specifically Cape Breton,” said Peter Gregg, company president and CEO. “Until those wind gusts come down, we won’t be able to get crews out there. But we’re making progress in Halifax.”
Environment Canada said Fiona will reach the Quebec Lower North Shore and southeastern Labrador by late Saturday night.
The agency said severe winds and rainfall, large waves and storm surges were all occurring.
Environment Canada said rainfall will be significant, particularly north and west of Fiona’s track, where it could lead to flooding. Some areas could see as much as 200 millimetres of rain. About 120 millimetres had already been reported in some weather stations in eastern Nova Scotia by 3 a.m.
Some waves along Nova Scotia’s Eastern Shore could build to be more than 10 metres, with waves along southern Newfoundland on Saturday morning reaching higher heights.
“Waves over eastern portions of the Gulf of St. Lawrence and Cabot Strait could be higher than 12 metres,” Environment Canada said.
While we wait for the NHC’s official call, it looks like <a href=”https://twitter.com/hashtag/Fiona?src=hash&ref_src=twsrc%5Etfw”>#Fiona</a> has recently made landfall between Canso and Guysborough. With an unofficial recorded pressure at Hart Island of 931.6 mb, this makes Fiona the lowest pressured land falling storm on record in Canada. <a href=”https://t.co/TYo9G05sUz”>pic.twitter.com/TYo9G05sUz</a>
It said the western Gulf will see waves from the north up to eight metres in some places, “which will probably cause significant erosion for north-facing beaches of Prince Edward Island.”
The forecaster said the Magdalen Islands will also see some coastal erosion from waves.
Coastal flooding is a big concern for Nova Scotia, Prince Edward Island, the Magdalen Islands, eastern New Brunswick and southwest Newfoundland.
“The highest risk for coastal flooding will be a combination of storm surge with large waves moving onshore,” Environment Canada said.
“This is is definitely going to be one of, if not the most powerful tropical cyclones to affect our part of the country,” said Ian Hubbard, meteorologist for the Canadian Hurricane Centre in Dartmouth, N.S. “It’s going to be definitely as severe and as bad as any I’ve seen.”
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