It started 10 years ago, when a German journalist received a message from an anonymous sender: “Hello. This is John Doe. Interested in data?”
What followed in the days and months after was a leak of more than 11 million files from a Panamanian law firm — the leak that came to be known as the Panama Papers when it was revealed to the world in April 2016.
The confidential documents exposed hidden bank accounts, billions of dollars in shady money flows and the real owners behind thousands of offshore shell companies based in tax havens like the British Virgin Islands, the Bahamas and Panama itself. The leak also caught the attention of the world’s tax agencies, keenly aware that where there’s hidden money, there’s often unpaid tax.
Now, almost exactly nine years after the first public reports about the Panama Papers, two dozen of those national tax agencies say they’ve collected a total of $1.86 billion in tax arrears and fines as a result of information in the leak.
However, the Canada Revenue Agency (CRA) is not among those. While its latest figures show that it has assessed $83 million in taxes and penalties so far as a result of Panama Papers-linked audits, the CRA says that, unlike many other jurisdictions, it doesn’t track how much of that it has actually collected.
The full global fiscal impact of the Panama Papers is likely much higher, as many countries’ tax agencies wouldn’t divulge a precise number, while some others like the CRA could only say how much they’ve determined they’re owed and not how much they’ve actually recouped.
The tally was compiled by the International Consortium of Investigative Journalists, the Washington-based organization that co-ordinated the original reporting on the Panama Papers by 100 global media outlets, including CBC News.
The Swedish tax agency told reporters it has recovered more than $300 million in missing taxes since 2021, France has brought in $297 million while tax collectors in Spain have managed to recoup $250 million from previously undeclared assets and income.
CRA audits still underway
In Canada, federal agents have completed 310 audits into people and entities named in the Panama Papers, the CRA says. More than 130 files are still being examined — nine years after the leak.
“It can take several years to complete these audits, because a significant number of taxpayers have used a variety of delay tactics or refused to hand over requested information, requiring the CRA to use other tools to obtain it,” the CRA said in a statement to La Presse and CBC News. “Some have also resorted to contesting the agency in court, resulting in audits that are both time-consuming and complex.”
Notably, the agency has not filed any criminal tax-evasion charges in relation to the Panama Papers. It says it did launch six criminal investigations; three were closed without charges and another three are still ongoing.
“If it’s potentially three prosecutions all across Canada — like, three — that’s kind of pathetic,” said Jonathan Farrar, a professor of tax accounting at Wilfrid Laurier University in Waterloo, Ont.
In general, the CRA has pursued criminal cases less often in recent years. It filed criminal charges in 33 cases in the 2019-20 fiscal year, dropping to 28 cases in 2022-23 and just seven in 2023-24. Similarly, while the agency executed 196 search warrants in 2019-20, the number fell to 26 in 2022-23 and 59 last year.
“Rather than send a warning message or a shot across the bow that the CRA is serious about cracking down on these blatant cases of egregious tax avoidance, instead the message seems to be, ‘Well, you know, you can try to do whatever you want and you’ll probably get away with something,'” Farrar said.
More than $40M assessed in Quebec
Separately, Revenu Québec says the Panama Papers have led to the discovery of $41.4 million in unpaid taxes, as of last fall. At least $30 million of that has been collected but the precise amount can’t be specified from the numbers Revenu Québec was willing to provide.
Both the CRA and Revenu Québec say they’ve also discovered taxes owing thanks to information in another big leak of tax-haven data, the Paradise Papers, which emerged in November 2017.
The CRA said it’s assessed $6.8 million in taxes and penalties as a result of the Paradise Papers, while Revenu Québec’s figure was $16.1 million.
