AT least 20 people in West Vancouver could be sleeping a little less soundly tonight after a massive international leak of financial information revealed their names on a list of possible tax cheats.
According to the CBC - the Canadian partner in a group of investigative journalists who received the leaked information - the West Vancouver residents are among 450 Canadians whose names appear in the leaked documents containing offshore financial data.
Gordon Baldwin, a North Shore resident, chartered accountant and partner in the firm KNV Chartered Accountants, said anyone caught by the leak probably isn't going to be hugely surprised. "It's really a matter of time," he said.
It's not illegal to have money parked in offshore assets. But Canadian residents are supposed to declare income earned in such investments to the Canadian taxman.
But some of the country's wealthiest have traditionally used banking secrecy laws in places such as Barbados, the Cayman Islands and other offshore tax havens to shield their identifies, create sham companies and avoid paying taxes.
While the line between tax avoidance and tax evasion can be thin, the basic rule that you have to declare any offshore assets of more than $100,000 on your tax forms isn't complicated, said Baldwin.
But sometimes, "As people get wealthy, they get much more protective," he said. "They want to keep what's theirs. They have a sense of entitlement. It takes over rational thought."
People in those positions may opt not to question dubious advice from lawyers or accountants about stashing their cash offshore, said Baldwin. "They hear what they want to hear."
But the basic rule still applies, he said: "If it sounds too good to be true, it is."
On Thursday, Gail Shea, minister of national revenue, called on the international journalists group to hand over the list of names to the Canada Revenue Agency.
"Anyone with information on tax cheats has an obligation to bring it forward," she said in a press statement.
Shea said the government has long recognized that international tax evasion is a serious problem and that tax officials will "aggressively pursue" all suspected cases of tax evasion.
Shea also pointed to measures introduced in this year's federal budget to crack down on tax cheats, including requiring banks to report any international electronic funds transfers of more than $10,000 to the Canada Revenue Agency. The taxman has also set up a snitch program that will pay a portion of taxes collected to anyone who provides information on suspected tax cheats.
