A Quebec research institute says some of Canada’s biggest companies have transferred billions of dollars in profits to Luxembourg to avoid paying domestic taxes.
The research published today by IRIS says 59 Canadian companies — including 33 headquartered in Quebec — transferred some $119.8 billion in net profits to the European low-tax country over a period of about 10 years.
The companies operate in several sectors including finance, natural resources, food and technology, and include big names such as Thomson Reuters, Alimentation Couche-Tard and Saputo Inc.
The study notes that tax avoidance strategies aren’t illegal but violate the “spirit” of the law because they permit companies to pay ultra-low taxes in jurisdictions other than where the majority of their economic activities occur.
Representatives from Thomson Reuters, Couche-Tard and Saputo Inc. were not immediately available for comment.
The researchers say some companies on the list have received public subsidies in Canada, such as Covid-19 wage subsidies.
The study says it’s not possible to measure how much potential Canadian tax revenue has been lost, because the profits transferred to Luxembourg come from companies’ activities in multiple countries.