Higgs told reporters at the Legislature that because the tax strategies the companies used were legal, there is no reason to bar them from receiving government grants, loans or other subsidies. The prime minister said he would cut off aid for companies that break the rules, “but I have no indication of that.” “I don’t think we can criticize someone for following the rules.” Higgs was reacting to a year-long investigation by CBC News and Radio-Canada looking into Irving’s presence in the offshore tax haven of Bermuda. It revealed that JD Irving Ltd. used an insurance company on the island, FMA Limited., to insure its ships, paying premiums to the Bermuda entity, which then reinsured the ships at a lower cost, allowing it to collect millions of dollars in tax-free profits. University of Victoria tax law professor Jeffrey Loomer told the CBC and Radio-Canada that the tax strategies were legal. A year-long investigation by CBC News and Radio-Canada looked into Irving’s presence in the offshore tax haven of Bermuda. (Mike Heenan/CBC) In the legislature Thursday, Green MLA Kevin Arseneau acknowledged that this is true, but called for a “moratorium” on subsidies to Irving companies. He also said that JD Irving Ltd. he should be called to testify before a legislative committee looking into how much revenue the province has lost because of the company’s tax strategy. Finance Minister Ernie Steves responded that the government wanted “all citizens to take advantage of the opportunities that are out there. If you’re from New Brunswick, we want you to take advantage of what’s available to you to save.” Higgs echoed that to reporters, saying everyone is using tax credits to lower their tax bills as much as they can. Finance Minister Ernie Steves said the government wanted “all citizens to take advantage of the opportunities that are out there. If you’re from New Brunswick, we want you to take advantage of what’s available to you in savings.” (Ed Hunter/CBC) He said that while large corporations have “more ability” to use specialist law firms and accountants who specialize in using offshore tax havens, writing off a charitable donation on an individual tax return is “sort of the same process. “Individuals will do it to the extent of the law and companies will do the same thing to the extent of the law,” he said. Higgs, a former Irving Oil executive before entering politics in 2010, said it was “extremely important to follow the rules” when he worked at the company. His role was in business, not accounting or taxation. Both he and Steeves pointed out that taxing foreign assets is a federal responsibility. The prime minister said he is confident Canada Revenue Agency will “monitor and measure and determine that the rules are being followed.” Steeves said two officials from his department are on a federal-provincial “tax avoidance task force” and Arseneau should work with the Liberals to pressure federal Finance Minister Chrystia Freeland to make any changes to tax laws. Asked in the House of Commons about Irving’s revelations on Thursday, National Revenue Minister Diane Lebouthillier said the federal government had already made it “increasingly difficult” to “hide” money overseas. Liberal leader Susan Holt avoided taking a clear position on whether Irving companies should lose access to public subsidies. (Ed Hunter/CBC) In Fredericton, provincial Liberal leader Susan Holt endorsed Arsenault’s call for a commission to look into the issue. “We’re going to have to make sure that New Brunswickers are all paying their fair share of tax and that we have a system where people participate equally, so if there are loopholes and opportunities to close, we can act and close, I think we should.” But Holt refrained from taking a clear position on whether the Irving companies should lose access to public subsidies. “People who receive public funds should participate fully in our public tax system,” he said. Asked whether the use of legal tax strategies amounted to non-full participation, Holt reiterated her comment that the matter needs to be looked into. Holt was CEO of the Business Council of New Brunswick from 2011 to 2015, acting as a spokesperson for the organization that represented many of the province’s largest employers. She told reporters on Thursday that during her tenure, the membership of JD Irving Ltd. on the board was not renewed because the company wanted to take “individual positions” on issues in its own business interest.
