Letters to the Editor, April 22, 2025

Published Apr 22, 2025 • Last updated Apr 22, 2025 • 2 minute read

Tuesday letters Photo by Illustration /Toronto Sun

NO TAX HAVEN

Your coverage of Mark Carney’s involvement with investment funds registered in Bermuda (“Conservatives promise to go after tax cheats, end loopholes,” Spiro Papuckoski, April 8) made gratuitous use of the outdated and misleading term “tax haven.” Although there is no official definition of the term, it is widely understood to mean a country facilitating tax avoidance by corporations and the wealthy. Allow me to set the record straight. Under the OECD’s Common Reporting Standard, anyone doing business with financial institutions in Bermuda or the Cayman Islands is automatically reported to their domestic tax authorities (the CRA in Canada) and required to pay tax, according to their domestic tax laws. A system of peer review between signatory nations ensures the rules are strictly enforced. For this reason, neither the OECD nor the EU includes Bermuda or the Cayman Islands on their lists of non-cooperating countries, known colloquially as “tax haven blacklists.” Readers may well wonder why companies do business in Bermuda if it does not allow them to avoid tax. The simple reason, wilfully ignored by our critics, is that “tax neutral” countries allow investment capital from around the world to be pooled and deployed much more efficiently without the need for investors to navigate complex and ever-changing double taxation treaties. Canadian investors in Bermuda funds are not, therefore, avoiding taxes in Canada. Rather, they are avoiding other countries’ taxes, which serves only to increase the tax they pay in Canada. For this reason, it is high time the Canadian press, like the OECD and EU, retired the misleading term “tax haven.”