As published on news.bloombergtax.com/daily-tax-report, Monday 11 May, 2020.
Canada’s latest economic aid package for the Covid-19 crisis won’t be open to businesses with tax evasion convictions and will demand changes from those aggressively avoiding taxes, Prime Minister Justin Trudeau said.
Canadians expect companies that benefit from the Large Employer Emergency Financing Facility, which will provide loans over C$60 million ($42.76 million), to be responsible for paying their fair share in taxes, Trudeau said Monday at a news conference.
The program is intended to provide bridge financing to businesses with over C$300 million in revenue and a significant work force in Canada.
The conditions are the clearest tax evasion- and avoidance-related rules yet among the billions of dollars in economic aid the federal government has announced in response to the pandemic over the past two months. Ottawa has been under pressure from opposition parties, unions, and anti-tax evasion advocates to bar companies that use tax havens from receiving public money.
Trudeau in late April said the aid programs wouldn’t go to firms that evade or avoid taxes but didn’t clarify his definition of tax avoidance, a general term that covers a wide range of practices, many of them legal.
The tax-related conditions for the latest relief come alongside others preventing companies from being involved in insolvency proceedings, abrogating collective bargaining agreements or pension deals, and straying from the government’s climate change goals, according to the announcement.