“The Canadian government supports the global tax reform, of which one of its objectives is to impose limits on the use of tax havens by companies. “My instinct is that when you start to see these complex ownership structures, it’s just an immediate red flag,” he tells me. To help achieve this, CPPIB has established a vast network of at least 30 subsidiaries in the Cayman Islands, the tax haven capital of the world.įor DT Cochrane, an economist with Canadians for Tax Fairness, an Ottawa based non-profit group, the use of offshore tax havens is deeply worrisome. But on its international investments, where taxes are due, CPPIB works very hard to minimize tax payments.ĬPPIB is so adept at using legal strategies to minimize taxes that over the past year (fiscal 2023), its total tax bill was a mere $186 million on gross income of $15.6 billion - an effective tax rate of just 1.2 per cent. On its Canadian investments, it is exempt by law from paying taxes. Over the past decade, the Canada Pension Plan Investment Board (CPPIB) achieved an annual rate of return of 10 per cent on our CPP fund, one of the highest rates among global pension funds.īut those stellar results rely in part on a questionable practice: tax avoidance.ĬPPIB manages assets worth $570 billion, of which only a small part (about 14 per cent) is invested domestically.
When it comes to performance, Canada’s national pension fund rightfully boasts impressive results.
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