From: 1revenuecanada@canada.com   
      
   Is a Canada Revenue Agency Landlord Avoiding Taxes Via Offshore Havens? : CRA   
   SOTW   
      
   By Bruce Livesey in News | October 15th 2015   
      
   The Canada Revenue Agency (CRA) rents office space from a Vancouver-based   
   property developer - a company that exploits offshore tax havens in   
   Liechtenstein, the British Virgin Islands and Channel Islands.   
      
   Larco Investments Ltd. owns three buildings in Montreal, Calgary and Edmonton   
   where they rent office space to the CRA. Larco purchased the buildings from   
   the federal government in 2007.   
      
   Yet evidence has emerged that Larco takes advantage of offshore tax havens.   
   "It's interesting to us that as a government landlord, that's also the   
   landlord of the CRA, when the CRA is supposed to be going after this   
   (offshore) stuff... it just raises questions about whether the CRA is aware,"   
   says Michelle Travis, research co-   
   ordinator of UNITE HERE Canada, a retail sector union which represents workers   
   employed by Larco.   
      
   UNITE HERE stumbled upon Larco's use of offshore tax havens while researching   
   the company.   
      
   The Larco-CRA case is symbolic of the Harper government's track record of   
   allowing billions of dollars of potentially taxable corporate monies to flee   
   to offshore tax havens. In 1990, only $11-billion was flowing from Canadian   
   corporations to offshore    
   tax havens: today this sum is almost $200-billion a year and growing. An   
   estimated $8-billion is also lost annually through tax evasion.   
      
   These sums suggest that if the Harper government was more diligent in tracking   
   offshore money or plugging holes in the tax code, they would not have to run   
   deficits, impose austerity measures, raid the EI surplus or sell its shares in   
   General Motors --    
   while also funding health care, education and infrastructure.   
      
   "It's a horrendous problem," says Senator Percy Downe, Jean Chrétien's former   
   chief of staff, who has spent the past nine years pursuing the offshore tax   
   haven issue. "If we collected what we're owed to the government... there'd be   
   additional money to    
   fund programs that are being cut. And taxes could be lower or remain lower."   
      
   In fact, Alain Deneault, a sociologist at the Université du Québec and author   
   of the recent book Canada: A New Tax Haven, maintains "[The Conservatives] are   
   offshore-friendly actually. They don't see it as something wrong officially."   
      
   Lalji family and their offshore tax structures   
      
   Larco is a privately-held company owned by the Lalji family, one of Canada's   
   wealthiest clans, sitting on a fortune estimated at $2.6-billion. Run by three   
   brothers - Amin, Mansoor and Shiraz - the Laljis are Ismaili Muslims who fled   
   Uganda in the 1970s    
   during the dictatorship of Idi Amin, settling in BC. There they founded a   
   burgeoning real estate empire, owning hotels and retail outlets such as the   
   Park Royal Shopping Centre in West Vancouver.   
      
   The Laljis are notoriously private and media shy - the Globe and Mail's   
   business magazine once listed them among Canada's "hermit kings" - although   
   they haven't escaped controversy entirely.   
      
   In 2007, Shiraz Lalji was criticized for destroying one of architect Arthur   
   Erickson's earliest single-family dwellings in BC - the David Graham house.   
   "We were upset," says Philip Boname, president of the Arthur Erickson   
   Foundation, who said Shiraz    
   never responded to appeals to change his mind.   
      
   In 2007, the Laljis paid $1.4-billion to buy seven federal buildings the   
   Harper government had put up for sale - and then rented them back to the   
   government with 25-year leases. The CRA has offices in three of the buildings.   
      
   By then, though, the Laljis had been using offshore tax havens for years. In   
   2003, Larco appeared before two Nevada gaming agencies when it wanted to   
   change its financial arrangement with one of the casinos it owns in Las Vegas.   
   The Nevada authorities    
   wanted more information about who exactly controlled the casino.   
      
   At hearings in Carson City, Nevada, Thad Alston, Larco's senior    
   ice-president, gave an explanation, noting that "this [corporate] structure   
   was created really with legal, tax and estate planning considerations for the   
   Lalji family."   
   The structure is complex: The Laljis had created a company called Hotspur   
   Resorts Nevada Inc. to bid for casino assets in Nevada. Hotspur's ownership   
   was structured through a series of offshore companies based in the British   
   Virgin Islands, a notorious    
   offshore tax haven.   
      
   The chain ended with a foundation called Hilfreich Stiftung located in   
   Liechtenstein, the tiny European offshore tax haven. Also involved was the   
   Lalji Family Trust, and the HSBC bank, a British global banking giant.   
      
   While it's not illegal to park money offshore as long as you declare it to the   
   CRA, these offshore havens are used because they charge little to no taxes for   
   companies and wealthy families - which is why the money is deposited there.   
   "There are so many    
   loopholes available to companies that companies can do it legally," says   
   Dennis Howlett, executive director of Canadians for Tax Fairness, which   
   lobbies against the use of such havens. "Unless you really flagrantly violate   
   the laws, the CRA doesn't have    
   time or money to come after you."   
      
   In his 2003 testimony, Alston indicated that the ultimate control of the   
   family's companies was held by the Lalji Family Trust. He said the trust was   
   scheduled to be dissolved in 2005, whereby the Laljis would have to pay taxes   
   to the CRA.   
      
   Thus, Alston said they decided to move some of this money offshore before 2005   
   "for estate planning and tax efficiency purposes, with the idea that you'd end   
   up with a sum of funds offshore in a tax-free jurisdiction with the idea that   
   with the funds    
   under the control of essentially a bank, trust company, you would then have a   
   way to manage those assets, those funds for the benefit of the families (for)   
   generations to come. So that was the idea."   
      
   He indicated that the sums moved offshore amounted to between $300-million and   
   $500-million.   
      
   Ultimately, the offshore funds were managed by Hilfreich Stiftung, the   
   Liechtenstein-based foundation created by the Laljis, which in turn was   
   overseen by HSBC - a bank notorious for its offshore tax haven shenanigans.   
   Media exposés earlier this year    
   revealed how the bank's Swiss arm helped wealthy customers dodge taxes and   
   conceal tens of millions in assets.   
      
      
   [continued in next message]   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)