Canada in Luxembourg: $120 billion net profits transferred in the last decade

MONTRÉAL, Nov. 2, 2023 /CNW/ – IRIS publishes today a new study presenting an unprecedented portrait of tax avoidance committed by Canadian multinationals in Luxembourg. For about 10 years, 59 Canadian companies, 33 of which have their headquarters in Quebec, transferred $119,8 billion worth of profits to Luxembourg. Between 2011 and 2021, these benefit transfers saw an average annual increase of 20 %.

“Tax havens have concrete consequences on people’s lives and the solutions, known for at least thirty years, would make it possible to respond to the major crises of our time”, notes Colin Pratte, researcher at IRIS and co-author. of the study.

All multinationals listed belong to the economic sector including the food sector. According to the data collected, a quarter of the profits transferred to Luxembourg in the last five years falls within the scope of that sector.

“From an equity perspective, tax avoidance practices of companies in the food industry are concerning especially in an inflationary climate. Not only do these practices create unfair competition with small players, but they place people who are most affected by food price inflation in a doubly disadvantage”, explains Sophie Elias-Pinsonneault, associate researcher at IRIS and co-author of the study.

The study published today shows that it is not uncommon for companies to benefit from public subsidies while they multiply tax stratagems from Luxembourg. “Unlike countries such as France, Denmark, and Poland, which have prevented companies operating in tax havens from accessing public financial aid stemming from the pandemic, Canada has refused to impose such regulations”, notes Colin Pratte.

CAE Inc., a multinational based in Montreal in the aeronautics sector, has notably transferred $99.2 million to Luxembourg in 2020-2021 while it received, that same year, $115.7 million from the federal COVID-19 wage and rent subsidies for businesses. The data collected also tells us that Northvolt’s Luxembourg subsidiary accumulated assets of $637.6 million in 2022 while the company is projected to receive up to $7.3 billion in public funds for the construction of a battery factory in Montérégie.

To read the complete press release version: https://bit.ly/press-release-tax-avoidance

To read the study: https://bit.ly/evitement-fiscal

SOURCE IRIS – Institut de recherche et d’informations socioéconomiques