Quebec-based financier Stephen Bronfman is among those named in the Paradise Papers; a trove of approximately 13.4 million files from two off-shore services, and 19 tax havens.
He is heir to the Seagram fortune, and owns an investment company Claridge Inc. The CBC, and the Toronto Star found that Claridge Inc was a player in a $60 million US off-shore trust in the Cayman Islands. It potential millions in unpaid taxes.
The investigation found Bronfman’s law firm represented other off-shore clients. They helped lobby against federal legislation that would have cracked down on off-shore trusts.
Bronfman serves as revenue Chair for the Liberal Party of Canada (LPC). He is described by the CBC as a “close Trudeau family friend. Leo Kolber served as Claridge chairman in the early 1990’s, and later went on to serve as Liberal Senator. Kolber set up the “Kolber Trust” in 1991 with his children Jonathan and Lynne as beneficiaries.
Bronfman expanded his business into Israel, where Jonathan moved in 1991. According to the CBC, Jonathan Kolber received a 15% share of every dollar invested by Bronfman.
By 1997, the Bronfman family interests loaned the Kolber Trust over $34 million. It all ended up in an account in the Cayman Islands. Both Stephen Bronfman and Leo Kolber have declined comment. Their lawyer, William Brock, is defending them saying that any “suggestion of false documentation, fraud, disguised conduct, tax evasion or similar conduct is false”.
Paradise Papers Fallout
According to the Canada Revenue Agency, offshore trust accounts are legal. But everything has to be offshore including the decisions concerning them.
The Paradise Papers indicate this might not have been the case with the Kolber Trust. According to the CBC, among the documents indicate that decisions were made in Canada.It’s also alleged Chazan kept a separate set of books in Montreal, something Brock denies.
Memos were sent seeking approval, authorization, and written confirmation from Don Chazan. Chazan was an investment manager based in Montreal. There were indications of meetings between Chazan, and Jonathan Kolber. Kolber admitted Chazan’s position a decision-maker to the CBC. “He was the adviser. He’s the guy who made the decisions.” Tax experts believe if this is true, it makes it makes the Kolber Trust potentially operated in Canada.
Opposition Leader Andrew Scheer attacked Trudeau’s link to the Paradise Papers in a Facebook post. “It is no secret that the Prime Minister needs money to pay for his out-of-control deficits. But instead of cracking down on the tax-avoidance schemes, described by the Paradise Papers, used by his wealthy friends, like Stephen Bronfman, Trudeau is forcing you to pay the bill. Justin Trudeau’s well-connected Liberal friends get away with paying less, and you pay more. There is nothing fair about that.”
Conservative Finance Critic Pierre Poilievre believes it’s up to all parties to make sure all are paying their fair share. “At the end of the day, we need to work harder, all parties of all stripes, to crack down on those who avoid paying their fair share.
The NDP has presented legislation on tax avoidance that would deny tax breaks on banking practices involved in tax avoidance. The C.R.A. is said to be reviewing the Paradise Papers, and promises appropriate action will be taken.