Canada is quietly emerging as a popular tax haven for the global elite, who create shell companies with figurehead directors to evade or avoid taxes, a Toronto Star/CBC-Radio Canada investigation has found.

“Canada is a good place to create tax planning structures to minimize taxes like interest, dividends, capital gains, retirement income and rental income,” reads a 2010 internal memo from Mossack Fonseca, the law firm behind the massive Panama Papers leak of 11.5 million documents detailing global tax avoidance and evasion.

It’s called “snow washing” — using Canada’s prudent reputation and solid economy to make suspect transactions seem legitimate. A sprawling international tax avoidance industry is increasingly touting Canada as a jurisdiction for hiding wealth.

And the Canadian government has made it easier than ever for criminals and tax cheats to move money in and out by signing tax agreements with 115 countries — the greatest number in the world.

Another key reason is that Canada’s corporate registration systems — federally and provincially — are shrouded in the same kind of secrecy that exists in tax havens such as the British Virgin Islands, Panama and the Bahamas.

Company owners who don’t wish to be identified in Canadian corporate registries can pay a lawyer or a stand-in to appear on all public filings.

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Mossack Fonseca actively marketed Canada as a tax haven and established shell companies here to evade taxes, according to the documents obtained by the International Consortium of Investigative Journalists and shared with the Star and the CBC.

And the discredited Panamanian firm is not alone. The maple leaf is emblazoned on dozens of international corporate registry websites pitching the country as a legitimate option for hiding wealth.

Of greatest interest to foreign investors are Canadian limited partnerships (LPs): a corporate structure that has no tax filing requirements. Only the partners behind an LP have to file taxes, and if they’re not residents of Canada, no taxes are filed here at all.

“Canada is a horrible tax haven. Everybody is now switched over from using BVI companies and Cayman companies to Canadian LPs. It’s like the ultimate tax haven entity in the world,” said Mark Morris, an independent tax consultant based in Zurich who specializes in international tax agreements.

“Everyone loves Canadian LPs because they’re not viewed as (being from) a tax haven,” Morris said.

Tax industry insiders call Canada a “white listed” tax destination — a kind of flag of convenience for foreign-controlled shell companies with no legitimate business operations in the country.

“You’ve got this entity in Canada, banks or other parties in other countries are going to presume that it’s legitimate and OK — pure as the driven snow of the great white north,” said Toronto tax lawyer Jonathan Garbutt.

While Canadian companies must pay taxes on their worldwide incomes to the Canada Revenue Agency, Ramses Owens, Mossack Fonseca’s managing director in Panama, told colleagues there’s an easy way around this.

“I believe the Canada companies … are managed in a way that the administrators simply declare annually NO-ACTIVITY. In other words, they cheat a bit,” he wrote in an email in August 2010.

“It is impossible for the Canada revenue governmental system to look into such information for every single company formed in Canada...This is risky, but we will try to provide the service. We already have advisers in Canada, and we would try to open offices either in Toronto or Montreal.”

Shortly afterward, Mossack Fonseca produced a flyer promoting Canada as a tax haven jurisdiction, offering to register a corporation for $2,000.

Mossack Fonseca did not respond to requests for comment.

Mossack Fonseca made up this price list in Panama and distributed it to clients around the world, showing how inexpensive it is to incorporate a shell company in Canada.

“You cannot but help look at the issue of money laundering. Having a degree of anonymity allows individuals to obfuscate,” said Peter Dent, a forensic accountant and past chair of Transparency International Canada.

“Rules that allow you to obfuscate the true source of money behind transactions facilitate money laundering on a global scale.”

Even as Revenue Canada auditors have targeted the outflow of Canadian wealth offshore — including that of nearly 100 Canadians identified in the Panama Papers — Canada’s unparalleled 115 tax treaties and tax information exchange agreements (TIEAs) with other countries allow money to flow into the country tax free.

Canada’s tax agreements, signed under every government since the 1960s, put the country at the hub of a global network of tax-free money flows. While treaties with major business partners like the U.S. and the U.K. have been in force for a generation, in 1980, Canada signed one with Barbados, effectively encouraging Canadian businesses to route their international profits through the low-tax island. In 2009, Canada began signing TIEAs with offshore tax havens like the British Virgin Islands and Luxembourg, offering them the same tax-free benefits at treaty partners.

Mossack Fonseca recognized early that these treaties could be exploited to ensure little or no tax was paid in Canada or elsewhere.

The Panamanian law firm’s reasoning rested on a 2007 federal Court of Appeal decision that “clearly exempts non-residents from taxation,” according to an internal memo.

That legal interpretation allowed anyone in a country that has a tax agreement with Canada to establish an untaxed Canadian corporation. All you have to do is say you pay taxes at home — even if “home” is a tax haven with a zero-per-cent tax rate.