Quote:
Originally Posted by GioforPM
Most of those tax moves were done before his time as chair. And the shareholders included the Ontario Teachers Pension as one of the largest.
Anyway, To anyone who actually wants to know what's going on here:
BAM (not Carney himself) has investment funds (think ETFs) that people buy into and sell out of like a stock
The fund then spreads that money across a range of different investments
When BAM gains money from these investments, it would 'normally' (not usually) be taxed on the gains at this point (likely upwards of 30% if it was based in Canada)
When Canadians want to sell their stake in the fund, they also normally have to pay capital gains tax in Canada - this is what's being referred to as potential 'double taxation'
Non-canadians invested in the fund would also be subject to the taxation at the fund level as well as whatever applicable capital gains tax for where they're from
This means that investors would end up getting significantly less returns than they would by investing in assets directly
It also means that gains that would normally be exempt (eg pension funds, TFSAs, RRSPs, etc) would end up being subject to significant taxes
When non tax-exempt entities cash out on gains from the fund, they still have to pay taxes wherever they're based, whether that's in Canada or elsewhere
So, the result of the funds being based in Bermuda is essentially that investing in the fund becomes more or less equal with investing in the assets directly instead of being strictly worse due to the taxation at both levels.
If they didn't do something like this, not only would it be uncompetitive with other investment funds - it probably wouldn't make sense to invest in at all.
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This is so patently incorrect. Where did you get your information?
Brookfield doesn't run ETFs like a typical mutual fund company. It manages private funds and partnerships across real estate, infrastructure, and renewable energy — primarily for institutions and large investors. These vehicles operate differently from public ETFs and mutual funds like the ones you think you are referring to...
Brookfield actually runs a lot of flow through vehicles so technically the fund itself doesn’t pay income tax in Canada. nstead, income or gains are passed through and taxed directly in the hands of investors. So, there's only one level of taxation — not two.
Anyway, I think this point is stupid from a political stand point. You would be an idiot not to take advantage of tax planning which is perfectly legal. No business is in the business of paying taxes and this was certainly above board. My company has a very complex tax structure that saves us hundreds of millions. If you didn't do it, you would be an idiot.