Higgs sees no policy change over Irving offshore revelations

Premier Blaine Higgs says he won't be making any policy changes after new details emerged about the Irving companies' use of offshore tax havens.

Higgs told reporters at the legislature that because the tax strategies used by the companies were legal, there are no grounds for banning them from receiving government grants, loans or other subsidies.

The premier said he'd cut off assistance for companies breaking the rules, "but I don't have any indication of that."

"I don't think we can criticize someone for following the rules." 

Higgs was reacting to a year-long investigation by CBC News and Radio-Canada looking at the Irving presence in the offshore tax haven of Bermuda.

It revealed that J.D. Irving Ltd. used an insurance company on the island, F.M.A. Limited., to insure its marine vessels, paying premiums to the Bermuda entity, which then reinsured the vessels at a lower cost, allowing it to collect millions of dollars in profits tax-free. 

University of Victoria tax law professor Geoffrey Loomer told CBC and Radio-Canada that the tax strategies were legal.

In the legislature Thursday, Green MLA Kevin Arseneau acknowledged that's true but called for a "moratorium" on subsidies to Irving companies.

He also said J.D. Irving Ltd. should be called to testify at a legislative committee that would examine how much revenue the province has lost because of the company's tax strategy.

Finance Minister Ernie Steeves responded that the government wanted "all citizens to take advantage of what opportunities are out there. If you're from New Brunswick, we want you to take advantage of what is available to you in savings." 

Higgs repeated that to reporters, saying everyone uses tax deductions to lower their tax bills as much as they can.

He said while large companies have "more capacity" to use specialized law firms and accountants skilled at using offshore tax havens, writing off a charitable donation on an individual tax return is "kind of the same process.

"Individuals will do it to the extent of the law, and companies will do the same thing to the extent of the law," he said.

Higgs, a former Irving Oil executive before getting into politics in 2010, said it was "extremely important to follow the regulations" when he worked at the company. His role was in operations, not accounting or taxation.