MONTREAL—Prime Minister Justin Trudeau says his business dealings are above board and follow the rules after charges that he has used registered companies to avoid paying his full share of taxes.
In addition to his $340,000 prime ministerial salary, the Liberal party leader receives regular dividends from a holding company, 7664699 Canada Inc., according to a compliance agreement
published on the federal ethics commissioner’s website last month.
An official in the Prime Minister’s Office said the dividends come from a business that sells lumber and firewood from family land in Quebec and that management of those interests has been placed in a blind trust since he became prime minister.
The day after last October’s federal election, the official said Trudeau also liquidated and shut down 3701140 Canada Inc., a holding company that managed the inheritance left to Justin and Alexandre Trudeau, his brother, by their late father, former prime minister Pierre Elliott Trudeau.
The details about Trudeau’s corporate holdings came after questions were raised in a Montreal newspaper article and in the House of Commons Wednesday. NDP Leader Thomas Mulcair accused Trudeau of using various companies to “shelter his investments and avoid paying his full share of taxes.”
Critics suggested the Liberal leader was being hypocritical after claiming during the last election that the wealthiest Canadians set up small businesses in order to pay taxes at a rate much lower than the personal tax rate.
“There really is no evidence that the prime minister has broken any laws,” said Carl Vallée, a Quebec representative of the Canadian Taxpayers’ Federation. “But similarly, he shouldn’t imply that about other Canadians who are using similar structures for their own affairs like he has.”
A snide reference in French by Mulcair to “a boat in Panama” also suggests the opposition may be trying to piggy back on the attention and outrage being given to the Panama Papers tax scandal, the massive leak of documents detailing how the world’s wealthy and powerful hide their money in shell companies to avoid paying taxes.
Trudeau was unapologetic, however, saying that he has “raised the bar on transparency and openness” in Canadian politics compared to his opponents.
It’s not the first time Trudeau has taken heat for his privileged upbringing, which includes his $1.2-million-share of a trust fund left to him by his father. He has also been criticized in the past for supplementing his parliamentary salary with public-speaking fees through a company that was eventually shut down in 2013.
There were also accusations last fall that the MP for the Montreal riding of Papineau was perhaps more tax-sensitive than he lets on after La Presse newspaper reported that Trudeau, then living in the tony Ottawa neighbourhood of Rockliffe, was paying his taxes to the Ontario government rather than Quebec, which takes a bigger chunk of its residents’ earnings.
In contrast, Mulcair, then living in Stornoway, the official Opposition leader’s residence in Ottawa, paid his taxes in his home province of Quebec.
The Liberal Party of Canada told La Presse that Trudeau paid his taxes in Ontario because that is where he resided.
Correction – April 14, 2016: This article was edited from a previous version that misspelled Carl Vallée’s surname.
That's nice, but what about the offshore?