Canada’s 60 biggest corporations have more than 1,000 subsidiaries in offshore tax havens, depriving government coffers of up to $15 billion annually, according to a new report being published Wednesday.

The report, titled “Bay Street and Tax Havens: Curbing Corporate Canada’s Addiction” and prepared by the group Canadians for Tax Fairness, shines a light on one of the legal methods used by big corporations to reduce their taxes — tax havens.

“The reality is that most companies do this,” said Diana Gibson, the report’s author. “It’s not illegal, but it should be.”

Companies named in the Paradise Papers leak, made public last week, defended themselves by pointing out that they didn’t break any laws. But Gibson says legality isn’t the point.

“It’s not necessarily about whether it’s illegal or not, the issue is that it’s doing harm to Canada,” she said.

If the billions that remain on company balance sheets were instead collected in taxes, they could pay for a national pharmacare program, free university tuition or affordable public child care.

“Not only are tax havens costing us those lost opportunities to invest in public programs, but we’re also seeing harm to economic growth due to the inequality made worse by tax havens,” Gibson said.

The report combs through the public filings of the 60 biggest companies on the Toronto Stock Exchange to identify as many of their offshore structures as possible, a list that could never be comprehensive due to weak financial disclosure requirements in Canada and a lack of transparency in tax havens.

The researchers found that only four of those companies didn’t have any subsidiaries in tax havens, and some had more than 50.

The Paradise Papers reveal how the wealthy stash money in offshore accounts. Among the names in the records with some connection to offshore accounts are former Canadian prime ministers Brian Mulroney, Paul Martin and Jean Chretien. (The Canadian Press)

Subsidiaries in tax havens facilitate a tax manoeuvre called “profit shifting” which allows big corporations to move their profits from high tax countries like Canada to places where there is no tax, like the British Virgin Islands or the Bahamas.

This summer, Canada signed onto an international effort to curb profit shifting, but until it enters into force, billions continue to escape taxation each year.

Massive leaks of tax haven data, like last year’s Panama Papers and last week’s Paradise Papers have often focused on wealthy individuals who may illegally shelter their fortunes offshore. But the legal corporate use of tax havens is actually costing Canadian taxpayers twice as much, the report estimates.

“The issue here isn’t whether or not individuals are doing something wrong, the issue is the current tax structure is wrong,” said Gibson.

While some companies may have legitimate business operations in offshore tax havens, the report points out Canadian companies barely employ anyone in tax havens compared to the number of people they employ in other countries.

Canadian companies employ 1,200 people for every billion dollars invested in Mexico and 2,700 people for every billion invested in Germany. They employ just 1.1 people per billion invested in Bermuda; 6.2 per billion in the Cayman Islands.

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Since Prime Minister Justin Trudeau was elected in 2015, the federal government has invested nearly $1 billion in the Canada Revenue Agency to increase enforcement efforts.

Gibson worries that the problem isn’t that people and corporations are breaking the law, it’s that they can shelter billions from taxes without breaking the law.

“The government is enforcing inadequate laws,” she said. “The CRA is being asked to do its job with one arm tied behind its back.”