The Canadian government provided more than $1 billion in loans to a mining company that used a complex offshore business structure to allegedly avoid nearly $700 million dollars in Canadian tax.
Turquoise Hill Resources, a Canadian company headquartered in Vancouver and listed on the Toronto and New York stock exchanges, received a $750 million (U.S.) loan in 2015 from Export Development Canada (EDC), a crown corporation that supports Canadian businesses abroad.
The loan is worth more than $1 billion Canadian, according to EDC’s disclosure database.
Between 2010 and 2016, Turquoise Hill ran the finances for its massive Oyu Tolgoi mine in Mongolia through shell companies in Netherlands and Luxembourg, which allowed it to avoid paying $559 million (U.S.) in Canadian corporate income tax, worth $694 million Canadian at current exchange rates, according to a report put out by the Dutch NGO SOMO this week.
“There does seem to be a contradiction there,” said Karyn Keenan, director of Above Ground, an Ottawa-based NGO that advocates for corporate accountability.
“Should EDC be providing over a billion dollars of financing to a company that’s engaging in tax avoidance?” she asked. “EDC is a public institution. It’s an arm of the state. It should operate in a way that’s coherent with the policies and the stated aims of the government.”
“If the government of Canada is trying to impose a progressive tax regime to sustain the social contract with Canadians, then it’s surprising this kind of deal could happen,” Keenan said. – Toronto Star
read full article here
You see, this is how the game is played. A company does its best to avoid paying Canadian taxes (allegedly). The company setup shell companies (allegedly) in tax-haven countries specifically to avoid paying Canadian taxes. All mysteriously legal.
That company then asks for and receives a billion dollar “loan” from the Export Development Canada (EDC), a Canadian crown corporation that “supposedly” operates independent of the Federal Government. Do I believe that? Not on your life. According to the EDC website, it uses its own money. The money it loans out is not taxpayer cash. Is it true?
OK. A Canadian company supporting Canadian workers. Good paying Canadian mining jobs. Lets loan them some money. That is how the Canadian economy works today. Money for jobs.
But where are the Canadian mining jobs? Its mining operations are all overseas. The main operation is in Mongolia, but the company has stakes in mining operations in Australia, Kazakhstan and Arizona as well. Not many Canadian mining jobs there. What exactly is Turquoise Hill Resources exporting? How did the company even qualify for the “loan”?
Who owns the company? A majority of Turquoise Hill Resources shares are owned by Rio Tinto. Rio Tinto is one of the largest mining companies in the world. An Australian/UK owned corporation.
Soooo, where does the Canadian worker fit in? How do Canadians benefit from this $1 billion “loan”? They don’t. Its that simple. They don’t.
What exactly is the purpose of the EDC if not to help companies create jobs for Canadians?