The Liberal Government in Ottawa was in full damage control mode Monday following revelations that that the chief fundraiser for Prime Minister Justin Trudeau is linked to an offshore tax shelter in the Cayman Islands.
Stephen Bronfman, an heir to the Seagram liquor fortune and a close personal friend of Prime Minister Trudeau, served as Revenue Chair of the Liberal Party during the 2015 federal election campaign. Mr. Bronfman had raised as much as $250,000 in a single day for the Prime Minister’s election campaign.
Over the weekend, an investigation by the CBC, Radio-Canada and the Toronto Star revealed that Mr. Bronfman and his Montreal-based investment company, Claridge Inc., are linked to a U.S. $60 million offshore trust in the Cayman Islands that may have cost Canadians millions in unpaid taxes.
The investigation involves a 24-year paper trail of confidential memos and private records involving two prominent families with Liberal Party ties that experts say appear to show exploitation of legal tax loopholes, disguised payments and possible fraudulent transactions. The documents were part of a massive offshore leak released called the “Paradise Papers,” which were obtained by the German newspaper Sueddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ).
The revelation that a top Liberal Party fundraiser is involved in hiding money and assets overseas is likely to renew opposition criticism that Prime Minister Justin Trudeau’s government is rife with wealthy tax cheats and fraudsters who are not paying their fair share.
The Liberal Government has battled such accusations in recent weeks after it was discovered that Finance Minister Bill Morneau owns foreign property in France and that he didn’t t put his business dealings in a blind trust when he assumed public office. The Liberal Government came to power two years ago on a promise to “tax the rich” and vowing greater transparency.
Early Monday, the Canada Revenue Agency (CRA) vowed swift action and an audit of the financial situation of Mr. Bronfman and other prominent Canadians named in the leaked documents.
“The CRA is reviewing links to Canadian entities and will take appropriate action in regards to the Paradise Papers,” said CRA spokesperson John Power.
Prime Minister Trudeau's office referred all questions about Bronfman to the Liberal Party of Canada, which said that Mr. Bronfman was “a volunteer” who did not assist on policy matters. Nevertheless, the opposition parties were gearing up for a battle in Question Period Monday over the latest revelations.
“If Justin Trudeau's priority was really tax fairness, it's very curious that he's done nothing to go after the mega-millionaires who stuff their money in foreign tax havens in order to avoid Canadian tax, but yet he's tried to bring higher taxes on farmers, pizza shop owners and other small business owners,” said finance critic Pierre Poilievre. ”At the end of day, we need to work harder, all parties of all stripes, to crack down on those who avoid paying their fair share.”