Canadians named in Panama Papers controversy

Canadians named in Panama Papers controversy

Canadians named in Panama Papers controversy

Earlier today we reported on the revelation of the so-called Panama Papers (see Panama Papers: One of the Biggest Ever Data Leaks Explained), and now we can bring you news that 100s of Canadians are reportedly involved.

The leak of the document has tied dozens of world leaders to Mossack Fonseca, a law firm that acts as an agent for various offshore accounts: and Canadians are among the list too.

In addition, CBC and the Toronto Star are reporting that the Royal Bank of Canada used the services of the law firm in order to establish at least 370 offshore corporations. In an email statement to both CBC and The Globe and Mail, a spokesperson for the bank is reported to have said that the institution: “works within the legal and regulatory framework of every country in which we operate. ... Tax evasion is illegal, and we have established controls, policies and procedures in place to detect and prevent it occurring through RBC.”

The spokesperson went on to explain that there are many legitimate reasons as to why a holding company may be set up – and that if the company believed a client were looking to commit a criminal offence it would report it and not do business with that client.

Of course establishing offshore accounts is not in itself illegal – however, many of these types of companies have been used in the past to avoid tax payments, which is illegal. RBC is not the only bank named – the likes of UBS, Credit Suisse, Deutsche Bank and HSBC are also listed.

Canadian links to the controversy do not end with the institution, however. In addition, the Toronto Star is reporting that around 350 Canadian names have been included – while CBC claims there are 450 Canadians linked.

Of course, numerous world leaders have also been tied to the reports including Russian President Vladimir Putin and Icelandic Prime Minister Sigmundur David Gunnlaugsson.

What do you make of the Panama Papers scandal? Leave a comment below with your thoughts.

CORRECTION: This article has been modified to remove references to a senator and the senator’s spouse incorrectly described as reportedly linked to the Panama Papers document leak. Wealth Professional Canada regrets its error.

  • G 2016-04-04 2:30:13 PM
    Finally! I wasn't aware of the Panama Papers until today, but I know of some individuals that have evaded taxes by moving to Panama. Why should they get away with this?
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  • Peter Bennett 2016-04-04 3:15:58 PM
    Who did what and why they did it can be debated long and hard, and we will be no closer to the truth.
    Most advisors do some kind of asset allocation or risk tolerance questionnaire with their clients. Completion may make us 'compliant', but how many of us go beyond that and ask for our clients' tolerance for loss of privacy, risk of audit, public embarrassment, criminal or civil litigation, etc.? Sometimes we measure our success by how sophisticated our planning strategies are, how much tax we save the client, etc.
    Maybe we need to measure success by how well the client sleeps at night. Does the strategy I recommend pass the smell test? Can my client comfortably explain what the plan or strategy accomplishes?
    Panama is known for its hats. That's the way I prefer to keep it!
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  • Alan Jamieson 2016-04-04 7:35:58 PM
    It may be legal to shelter income from taxes by moving it offshore but it is certainly not morally sound. The vast majority of Canadian citizens pay taxes on their income. Why should a wealthy elite with access to services like those provided by Mossack Fonseca be allowed to enjoy the benefits provided by other people's taxes when they refuse to contribute to the common good. I am glad the leak occurred and trust that it will lead to more investigation of such entities.
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