G20 Nations Must Recognize the Stimulus Effect of International Financial
Centres in the Global Economy

Poll shows public expects companies to use offshore investment strategies, but doesn't understand benefits to domestic economies

TORONTO, June 9 /CNW/ - A survey released today by Invest Barbados showed that the majority of people in Canada, the US and the UK believe that investments in low tax jurisdictions (international financial centres) are good for business, but bad for their local economies. The survey revealed broad misconceptions among major G20 nations about the beneficial role of international financial centres in the global economy.

In Canada, 64 per cent believe that Canadian investments in low tax jurisdictions are good for business, yet 60 per cent think they are bad for the economy.

For additional survey results click here: http://files.newswire.ca/885/InvestBarbadossurvey.doc

However, according to Dr. Walid Hejazi, a faculty member at the Rotman School of Management at the University of Toronto, approximately 20 per cent of Canada's foreign direct investment abroad moves through low-tax jurisdictions, of which Barbados is the largest recipient.

"My research illustrates that increases in Canadian direct investment abroad, through legitimate international financial centres in countries such as Barbados, result in higher levels of Canadian capital formation and employment," said Hejazi who is the author of "Offshore Financial Centres and the Canadian Economy" and joined a panel discussion on the topic today at Economic Club of Canada.

"In recent years there has been much rhetoric in several G20 countries against tax havens in a way that stigmatizes legitimate international financial centres," said Minister Darcy Boyce, Minister of State, Finance, Investment, Telecommunications and Energy for Barbados.

"The reality is that well-regulated, transparent tax-treaty based centres, like Barbados, assist in the growth of both Canadian multinationals and their home economy by generating higher tax revenues and job creation in Canada in the long term. At a time when most G20 nations need sustainable stimulus structures, governments should recognize the domestic benefits of legitimate international financial centres."

Barbados was the only independent jurisdiction in the Caribbean to be "white-listed" originally by the Organization for Economic Co-operation & Development (OECD) and has a long standing Double Taxation Agreement with the Canadian Government. OECD white-listed jurisdictions are those that have substantially implemented the internationally agreed tax standard and agree to exchange tax information.

    
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    Summary of other key findings:
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    -   67 per cent of Canadians agreed it was important that executives of
        publicly traded companies explore the use of low tax jurisdictions to
        increase share value.

    -   56 per cent of Canadians opposed Canadian foreign investment in low
        tax jurisdictions. That opposition turned into strong support once
        Canadians learned of the positive effects foreign investments had at
        home.:
        -  77 per cent support Canadian investment in low tax jurisdictions
           that brings in increased tax revenue.
        -  85 per cent support investment that creates jobs at home.

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About Invest Barbados

Invest Barbados (IB) is an economic development agency of the government of Barbados. IB is responsible for attracting, winning and sustaining international investment for Barbados. The corporation is also responsible for promoting the export of indigenous services and helping to develop and manage the Barbados Business brand.

About the poll

Ipsos Reid Polling conducted the survey for Invest Barbados between April 29th and May 23rd 2010 in Canada, the US and the UK. Interviews were conducted among a national sample of the general population (18+) of 3071 adults. With a sample of this size, the results are considered accurate to within +/-1.8% with a 95% confidence level. Interviews were also conducted with a sample of 592 (+/-4.0%) High Net Worth individuals as defined as having financial assets equivalent to $500K or greater and a sample of 626 (+/-3.9%) business managers, owners, professionals and executives (MOPEs) with the professional group limited to those holding financial or legal position.

For further information: or to contact a spokesperson, please contact Gillian Brooks, Mansfield Communications Inc., Toronto, Phone: [phone] ext. 238, [email protected]