Blog Entry

Avoiding a "Green Shift" Towards Tax Havens

By Alain Deneault and Ugo Lapointe (Respectively, professor, author of "Canada: A New Tax Haven" and co-founder of Échec aux paradis fiscaux; co-founder of the Coalition pour que le Québec ait meilleure mine and coordinator at MiningWatch Canada.)

While Quebec and Ottawa are planning tens of billions to support the economic recovery and energy transition, ruthless financiers are sniffing out good deals. First and foremost: mining speculators well rooted in tax havens.

Overwhelmed by the boom in demand for the metals to power a growing number of battery mega-factories in the Americas and Europe, new mining magnates are salivating at the billions in subsidies being waved under their noses.

One of the most worrying cases in Quebec is that of the Pallinghurst group, behind the takeover of Nemaska ​​Lithium and the main private shareholder of the Nouveau Monde Graphite mining company.

According to data from the Paradise Papers, this group is associated with several entities registered in notorious tax havens, including Guernsey, the Cayman Islands, Luxembourg, Delaware, and Saint Kitts and Nevis.

To add to the opacity, the investors behind Pallinghurst are unknown. The group asked to redact their identities in documents filed in Superior Court during the restructuring of Nemaska ​​Lithium last fall.

Our governments have already shovelled hundreds of millions into these projects that benefit the invisible shareholders of Pallinghurst. And they promise more.

It is high time that a register of beneficial owners made public the persons who benefit from such enterprises and the potentially fraudulent schemes they engage in.

Unfortunately, the new measures promised by Quebec in 2022 and Ottawa in 2025 to reveal the identity of the real beneficiaries of businesses could be too little, too late.

As for the possibility of the G7 countries imposing a minimum tax on the profits of multinationals, which would be a positive step forward, we are still far from seeing this become reality.

In addition to these Pallinghurst fiscal troubles, there are environmental ones. Indeed, it was only furtively that Quebec approved the Nouveau Monde Graphite project earlier this year. The company had not completed all the environmental studies requested by the Office of Public Hearings on the Environment.

Going green cannot become a justification for tax injustice: a dollar lost in a tax haven is a dollar that cannot be reinvested in the transition.

Our governments must fight tax evasion in all its forms. They must review their regulatory frameworks which, in fact, legalize the use of tax havens rather than sanctioning them.

We can now demand more transparency and block access to government support to companies registered in tax havens.

In short, we must demand exemplary fiscal and environmental practices, from mines to batteries, for a truly clean, fair, and equitable transition.


Originalement publié dans Le Devoir