Revenu Québec keeps Bombardier findings secret

Quebec Finance Minister Carlos Leitão said in December he would ask Revenu Québec to look into whether Bombardier Inc. used Luxembourg as a way to avoid paying provincial taxes.

What he didn’t say was that the results of those inquiries would remain secret.

Washington-based International Consortium of Investigative Journalists discovered last year that the Montreal aircraft and railmaker transferred about $500 million to Luxembourg, a notorious tax haven,  to save on Canadian taxes. The strategy involves a highly complex structure involving 11 subsidiaries in eight countries and playing off the tax rates of various countries against each other to arrive at the lowest taxable rate — including zero taxes.

The fund transfer was done legally but hurts Bombardier’s home country and province, say critics like Ken Lester, adjunct professor of finance at McGill University’s Desautels Faculty of Management.

Both levels of government have subsidized the company for decades, arguing at every announcement of grants and loans that the taxpayer funds create high-paying jobs here that pay off in tax revenues that come back to government for many years.

Quebec government officials said this week they would not divulge the results of an investigation — whether or not Bombardier has avoided paying Quebec corporate taxes. Indeed, they would not confirm whether an investigation has been conducted. Nor would they confirm how long Bombardier has used that strategy and to what extent.

Geneviève Laurier, spokeswoman for Revenu Québec, said that “we can’t comment on files. Tax files are confidential, they’re protected by the tax administration laws.”

Bombardier spokeswoman Isabelle Rondeau also declined to say whether Revenu Québec arrived at a determination of whether the company avoided its tax grasp.

“Like all big companies, our contacts with (government) auditors are frequent and regular,” Rondeau said.

“The corporate structure we put into place is in accordance with all laws and regulations.”

After contacting her counterparts at Revenu Québec, Leitão’s spokeswoman, Andrée-Lyne Hallé, said in an email that “indeed, personal (tax) information is always confidential, which is why it’s impossible to share that content.”

“What the minister said in December is that Revenu Québec would make the necessary verifications. We must leave it at that.”