Following the leak of over 13 million documents, The Journal sat down with Professor and Associate Dean of Academic Policy Arthur Cockfield to discuss the Pandora Papers.
The documents comprising the Pandora Papers detailed the transfer of assets and wealth into offshore tax havens. They were published by the International Consortium of Investigative Journalists (ICIJ) on Oct. 5.
Tax havens are usually based in economically-disadvantaged countries and provide tax and financial services to non-resident investors. They usually offer full secrecy surrounding investments.
In an interview with The Journal, Cockfield, a member of the Offshore Compliance Advisory Committee, spoke about his experience working with the ICIJ. Specializing in tax law, Cockfield was responsible for assisting the ICIJ in discerning the significance of leaked documents.
“I’m somebody who sifted through the leaks starting in 2012,” he said. “My job is to try to help the journalists understand what they’re looking at.”
Using tax havens, wealthy Canadians avoid paying higher tax rates at home—an advantage that average and lower-income citizens cannot access. Some high-profile Canadians among the nation’s most affluent were implicated in the Pandora Papers.
The Pandora Papers are hardly the first of their kind. The ICIJ previously published the Panama Papers in 2016, another tax haven data leak. Despite leaked documents revealing the severity of the issue, there’s been very little federal action to prosecute offshore tax evasion.
“There’s reason to be a bit cynical, in that there have been a series of these giant tax haven data leaks and very little action by our federal government,” Cockfield said.
“I’m hopeful that the government will start auditing and prosecuting offshore tax havens.”
Without formal action against tax evasion, the Canadian public becomes the primary victim. The loss of tax revenue from wealthy Canadians avoiding paying their share of taxes leads to lower investments in public services. This disproportionately affects low-income populations.
“Ordinary citizens are paying their legally due tax bills and paying for government services, whereas these giant tax cheats are getting away with murder,” Cockfield said.
According to Cockfield, offshore tax havens are often based in politically unstable, impoverished countries. Folks living in countries that are home to these tax havens don’t benefit from the increased funds either, as wealth is funneled into investments rather than into local governments.
Cockfield added that while increased access to technology has exacerbated the problem of offshore tax havens, it’s also increased access to information like the leaked documents. This has created more awareness among ordinary people about the dangers of these international tax havens.
“Increasingly, researchers are showing that the problem of offshore tax evasion is much worse than we previously thought it was,” Cockfield said.
“Now we have access to all this leaked data, and it shows it’s worse.”
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