P.E.I. tax avoidance advice provided by government

P.E.I.'s Official Opposition wants to know why a document prepared by a provincial Crown corporation to attract a business to the province included a line on how to avoid paying Canadian taxes.

Opposition MLA James Aylward tabled the 12-page document in the legislature Wednesday.

Aylward said the document was sent to Capital Markets Technologies, which is currently embroiled in a $25 million lawsuit against the province over a plan to regulate e-gaming in the province.

A section on the logistics of establishing a business on P.E.I. included the following line.

• "Most companies set up subsidiary of the parent company and flow revenue and costs through an off-shore operation (i.e. US), limiting the tax implications in Canada."

Aylward said it is one of the most shocking documents he's read in his time as an MLA.

"To think that we have a branch of government that's out there recruiting companies to come to Prince Edward Island to do business, but yet we're giving them an idea of how to avoid paying corporate taxes here on P.E.I. by setting up a parent company offshore," he said.

"And it's in black and white."

'A misinformed attempt'

Mary Moszynski, the acting director of communications for the province, said the brochure sent to CMT is one-of-a-kind, and the work of a former employee.

Moszynski said the explanation makes no sense, and is a breach of Innovation PEI policy.

"Innovation PEI as a matter of policy does not provide tax advice to clients," she said.

"This was a misinformed attempt at explaining taxation in Canada that was included in a document intended to provide information on P.E.I. in general."

She said management did not review the document and would never have sanctioned that paragraph.