The chair of the Canadian Mint "should have been gone long ago" and the fact he still has the job shows the Conservatives protect their rich friends, Opposition Leader Tom Mulcair said Wednesday following exclusive revelations by CBC News.
On Tuesday night, CBC reported that the mint chairman, Toronto tax lawyer Jim Love, had helped some descendants of former Tory prime minister Arthur Meighen transfer $8 million through offshore companies and entities in the Caribbean. Love said in court documents that the complicated transactions "resulted in significant savings of Canadian tax"— an amount he estimated at $1 million.
- Chair of Canadian Mint helped run offshore 'tax-avoidance scheme' for clients
- Ex-PM Meighen's multimillion-dollar estate embroiled in court fight
It is not inherently illegal to use offshore tax havens, but a lawsuit against Love and several co-defendants by some of Meighen's heirs allege the offshore arrangement put them at risk of "taxes, interest and penalties," and an expert consulted by CBC News said the Canada Revenue Agency would probably "like to have a look at that and analyze all of the transactions."
"The Conservatives have no morality when it comes to making rich people pay their taxes," Mulcair said. "This guy should have been gone immediately and the Conservatives now have to tell us how long they've known."
The lawsuit against Love was filed in 2008 and quietly settled two years ago with no admissions of liability. Love was appointed to the board of the mint in 2006 and elevated to chairman in 2009. He was also appointed by his good friend federal Finance Minister Jim Flaherty to two advisory panels in 2006 and 2007.
Through a spokesperson, Flaherty said Tuesday night that he was not aware of the "details or specifics" of Love's offshore dealings when the second advisory panel was struck.
Revenue Minister Kerry-Lynne Findlay added Wednesday that she wouldn't comment on the issue.
During question period in the House of Commons, Prime Minister Stephen Harper likewise said he would not comment on the revelations about the mint chairman, because they stemmed from "a dispute between two private parties before a court."
Mulcair said the government should "stop making excuses."
"Imagine the waiter who hasn't paid taxes on all his tips. Imagine the hairdresser who hasn't paid taxes on all income received. The government will fall on them, no questions asked," the NDP leader said.
"But if you're rich and well-connected in Stephen Harper's world, you get a free break."
Liberal Leader Justin Trudeau chimed in as well following his party's caucus meeting.
"This government has regularly failed in its appointments process — the way it selects people to be either senators or to oversee the Canadian security agencies or, you know, people who work in the" Prime Minister's Office, he said.
"The prime minister and, in this case, Minister Flaherty are going to have to answer questions."
It's estimated Canada loses up to $8 billion a year in potential tax revenue because of wealth held offshore. The government's most recent budget aims to recoup a chunk of that as a key source of new revenue to help eliminate the federal deficit by early 2015.
The budget plans called for the Canada Revenue Agency to "deploy teams of specialists to pursue tax evaders" and promised to once again change the rules around offshore holdings. "The CRA will target high-income taxpayers who attempt to evade or avoid tax using complex international legal arrangements."
Dennis Howlett, executive director of the advocacy group Canadians for Tax Fairness, said the revelations about the mint chairman's offshore involvement throw that into doubt.
"It really makes me question whether the government is serious about the commitment to tackle tax havens," he said. "They've got such close associations with people who are working to facilitate use of tax havens."
Love himself told CBC News in an email Tuesday afternoon that, as a lawyer, over the years he has worked on "literally hundreds of situations where international structures have formed a part of transactions structured for clients."
But, he continued, "In each and every case these structures and related transactions are very carefully reviewed to ensure that they are in full compliance with all Canadian tax rules that are in force at the time."