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Billionaires' law firm helped wage 'Kill Bill' campaign to block offshore tax legislation

Billionaires' law firm helped wage 'Kill Bill' campaign to block offshore tax legislation
From CBC - November 5, 2017

A Montreal law firm representing clients closely connected to the federal Liberal Party was a leading player in a campaign to block offshore tax legislation passed by the House of Commons, aCBCNews/Toronto Star investigation has found.

Davies Ward, a prominent Canadian corporate law firm, had several clients with offshore interests, including Liberal then-senator Leo Kolber and Stephen Bronfman, an heir to the Seagram whisky fortune.

At issue was legislation first proposed by the federal government as far back as 1999 to tackle what was perceived to be gaping offshore tax loopholes exploited by wealthy Canadians.

Federal FinanceDepartment officials stated that high net worth Canadian families were finding ways to "circumvent" the rules and "disguise" offshore transactions to avoid paying millions in tax back in Canada.

Davies Ward represented the Bronfman and Kolber families for years, helping them move money outside of Canada in the early 1990s and set up trusts in the United Statesand the Cayman Islands.

At the same time, LeoKolber was a top fundraiser for the federal Liberal Party under prime ministers Jean Chrtien and Paul Martin, a role later assumed by Stephen Bronfman, his godson, in 2013. Kolber was also chair of the Senate committee on banking, trade and commerce.

A review of lobby registry records, parliamentary finance committee hearings and Hansards going back more than a decade shows that Davies Ward and numerous tax law and accounting firms were heavily involved in a campaign that delayed the passage of any such legislation by 14 years.

Davies Ward was credited with playing a key role at a crucial time in that battle. The firm's work for a variety of offshore clients is revealed in the "Paradise Papers," amassive leak of files largely from the law firm Appleby, which has operations in Bermuda, the Cayman Islands and other offshore jurisdictions.

"I think every step of the way the big financiers in this country, the wealthy families, the corporations that benefited from these tax havens just kept the pressure on the government and many times, they were the government," said Judy Wasylycia-Leis, a former NDP member of Parliament who sat on the House of Commons finance committee in the early 2000s.

Firm registered to lobby on offshore trusts in 2005

Public records show that Davies Ward registered to lobby on the offshore trust proposals during the Liberal government of Paul Martin in 2005 and into 2006. Davies Ward listed its clients as Barbados trustees who were connected to U.S.-based Bronfman family trusts.

Lobby registry records also show that those same Barbados-based trustees hired former Liberal finance minister Marc Lalonde to lobby on their behalf.

In the end, the Liberals never did pass legislation to crack down on offshore trusts while in office.

It was only in 2007, after Stephen Harper's Conservative government came to power, that a bill finally passed the House of Commons. The hallmark of that legislation was that all Canadian contributions to foreign trusts would now be taxed on their earnings.

"It was actually a time when all parties came together on one issue," former MP Wasylycia-Leissaid. "And that was to find a way to stop the spread and growth of these tax havens."

'An effort to get this proposal scrapped'

But Davies Ward was not going to give up yet.

Together with other accounting and tax law firms, Davies Ward turned its attention to the Liberal-dominated Senate, which had agreed to hold its own hearings on the legislation.

And down in the Cayman Islands, as the Paradise Papers reveal, the offshore financial sector seemed to be following those events in Ottawa closelyaware of the last-ditch efforts in Canada to block the legislation.

'Conceptually flawed'

More from the Paradise Papers:

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