Barbados may have its financial troubles but it remains the most popular place in the world for Canadian investment, attracting an estimated CAN$62.9 billion last year.
At the same time, the rich North American economic colossus may be losing the battle against Canadians who allegedly use some jurisdictions to get around Canadian tax regulations and high tax rates to avoid high tax bills.
That’s according to Dennis Howlett, executive director of Canadians For Tax Fairness, a national organisation fighting to force corporations across Canada and rich individuals to limit the use of “tax havens” and countries with exceedingly low tax rates.
“Figures compiled by Canadian tax authorities indicate that the use of tax havens and other jurisdictions grew last year despite the Canadian government’s efforts to limit the use of tax havens,” Howlett told BARBADOS BUSINESS AUTHORITY. “Barbados is the most attractive and leading country for Canadian investment overseas in tax havens or in countries with low tax rates.”
He said that figures compiled by Canada’s Revenue Agency indicated that Canadian corporations and individuals channelled CAN$170 billion in about a dozen countries in 2013, up by CAN$15 billion over the year before and Barbados attracted more than a third of that money, CAN$62.9 billion to be precise.
In 2010, Canadian investment in Barbados amounted to CAN$49.9 billion. The next year it rose to CAN$55.8 billion; in 2012 it reached CAN$61.2 billion.
Howlett said that Barbados remained popular despite the competition it was facing from The Bahamas, Bermuda and the Cayman Islands and he attributed that to historical and other reasons, meaning that it was in the business with Canadian banks longer than most of its neighbours.
“Barbados has taken steps to increase transparency on tax matters to satisfy the demands of the Organisation for Economic Cooperation and Development, OECD, but it can go further,” said Howlett.
“It’s in the country’s best interest to diversify its economy to reduce the reliance on the offshore financial services sector. It will take some time for the international reform measures being planned by the OECD and other developed countries to have their desired effects but when they become effective Barbados would be adversely affected. It’s better that its reform efforts should be undertaken now rather than later. Barbados has done more than most countries to comply but we would like to see it go further.”
