So everyone seems pretty worried about a potential trade war with the United States. And for good reason — the US is our biggest trading partner by far.

And I bet that over the next couple of days and weeks, a lot of journalists are going to head over to the StatsCan website to look up numbers of just how much money flows between the two countries.

If they do, they might find themselves looking at a chart that shows Canadian foreign direct investment. It shows how much Canadian firms, individuals and institutions are investing in different countries. And, of course, the US is right at the top of the list, with just over a trillion dollars.

But it’s the rest of the list that I find especially interesting. Do you know which country ranks second?

Bermuda.

In 2023, there was more than $135 billion invested in Bermuda that came from Canada.

Bermuda is a tiny British Overseas Territory with a population just over 64,000. That $2.1 million dollars for every resident of Bermuda.

Now Bermuda is not exactly an industrial powerhouse. This money is not being used to build new factories or invest in exciting new Bermudian industries.

Everyone knows what’s happening. Bermuda is a tax haven. Almost to a dollar, that $135 billion dollars in Bermuda is for companies to avoid paying Canadian taxes.

So what the hell is going on here? The truth is that government after government has made it easier for companies to avoid paying taxes in this country, depriving Canadians of billions of dollars in revenue. That’s money that could be spent on social programs or addressing the budget deficit or lowering taxes on everyday people

So how did we get here? And do any of the political parties have the guts to do anything about this?

Featured in this episode: Alain Denault, Silas Xuereb

To learn more

Canada: A New Tax Haven by Alain Deneault & translated by Catherine Browne

“Deals Canada signed to catch tax cheats allow billions in taxes to escape” by Zach Dubinsky in CBC News

“Foreign direct investment, 2023” in The Daily from Statistics Canada

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The Hatchet is a podcast and newsletter dedicated to exposing power and money in Canada. Every week, we’re going to deliver important, original and fascinating journalism about how this country actually works, and we’re going to do it in a way that no one else can.

Music: I dunno by grapes (c) copyright 2008 Licensed under a Creative Commons Attribution (3.0) license. Ft: J Lang, Morusque

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Investments & Exits - mit Daniel Reese und Florian Obst