The secretive world of offshore tax havens

In October 2016, representatives from the Tax Department went to meet Stroller with James. They wanted him to take on “a big challenge,” as James later described it, because they were “worried that what we were doing would invite investigation by some clients or other parties.”

To see how the government is addressing the issue, talked to three tax experts in Toronto, including Jay Lusk, a professor and chair of the department of tax law at the University of Toronto.

“How is Canada doing on getting the rich to pay taxes?” asked.

“Canada is doing great on this issue,” Lusk said.

“Let’s look back in history,” he continued. “In 1989, the federal government (the Organization for Economic Cooperation and Development) put forward the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. It’s a treaty and it allows countries to tell each other who they think is not paying their fair share of taxes, and therefore potentially inviting an audit. And Canada turned a blind eye to that for years.”

That was a mistake, Lusk said.

“But the treaty changed Canadian law in 1995. And Canada, under the minister of Finance at the time, levied criminal penalties against anyone who intentionally misled or lied to one of the tax authorities regarding offshore shell companies,” he said.

That’s an important distinction, Lusk said.

“You’re talking about criminal penalties versus civil penalties. The people who were doing these shell companies were not aware that they were doing something illegal. We have fines and jail sentences for people who intentionally mislead tax authorities.”

Of course, it doesn’t appear as if that ever happened. Not until a public petition seeking a criminal investigation was started by a Globe and Mail reporter. The same day that the series was published.

“What this series reminds Canadians of is the thousands of shell companies that were set up and used by the rich, and how little the government has done to crack down on them,” Lusk said.

“They targeted entities that were being used and abused by the rich. We know that the rich don’t want the government to get close to them, so, it wasn’t these large corporations that used the offshore companies. It was the rich, and they have not been monitored or watched. And, if you put it this way, if the federal government did a survey, they would find that the rich get the benefit of the amnesty.”

Jim Stroller, who set up the offshore corporations for high-profile clients like Conrad Black and George Stroumboulopoulos, is now calling for an apology.

He has said that he is the one who “bragged about these offshore havens for years.”

Stroumboulopoulos, who landed $1.8 million in offshore real estate investments in 2014, has publicly apologized, adding that he has no intention of paying the taxes owed on the assets. He was a judge on “Battle of the Blades” and is now executive producing the “Star Trek” franchise.

Conrad Black, the former media mogul, is a former member of Parliament and the founder of Britain’s Daily Telegraph.

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