Opposition accuses Liberals of protecting friends, other ‘big fish’ named in Paradise Papers

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Prime Minister Justin Trudeau said the federal government will continue cracking down on tax evasion after another massive leak of offshore financial records, but the presence of the top Liberal fundraiser in the "Paradise Papers" fuelled attacks over his links with one of Canada's richest families.

During Question Period, Mr. Trudeau said the Canada Revenue Agency will look into all Canadian cases in the leaked documents, while refusing to comment on the allegations touching Stephen Bronfman, the Liberal Party of Canada's chief fundraiser.

The Paradise Papers, which are being released by an international consortium of media organizations, come from Appleby, a law firm founded in Bermuda, and the Singapore-based Asiaciti Trust.

Related: Who's named in the Paradise Papers? A list and a primer on why it matters

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The appearance of Mr. Bronfman in the documents created new problems on Monday for the Liberal government, which has been struggling in recent weeks to deal with questions over Finance Minister Bill Morneau's handling of his personal financial affairs. In addition, Mr. Trudeau has come under fire for his holidays at the private Bahamian island owned by the Aga Khan, a billionaire philanthropist and spiritual leader of the world's Ismaili Muslims.

While Mr. Trudeau continued to cast himself as the defender of the middle class, the Conservative Party and the NDP accused the government of protecting wealthy Canadians while clamping down on ordinary taxpayers.

"Why is the Prime Minister always making honest, middle-class families pay up while allowing his friends to avoid paying taxes in Canada?" Conservative Leader Andrew Scheer asked.

The NDP's parliamentary leader, Guy Caron, added: "They're going after the small taxpayer but not the big fish."

Mr. Trudeau said the CRA will delve into the leaked financial records to find and recoup any money that was hidden from Canadian authorities, with the help of $1-billion in new funding to the agency.

"We are fully committed to fighting tax evasion and tax avoidance," Mr. Trudeau said. "I will let individuals comment on their own situations. But in regards to the Paradise Papers, the CRA is reviewing links to Canadian entities and will take every appropriate action."

First reported in Canada by the CBC and the Toronto Star, the Paradise Papers raise questions about some of the financial arrangements of two families with strong ties to the Liberal Party of Canada, the Kolbers and the Bronfmans.

Leo Kolber, who is now retired from the Senate, was the top fundraiser for the Liberal Party when Pierre Trudeau was prime minister. Mr. Bronfman has occupied the same position for the Liberal Party under the leadership of Justin Trudeau.

According to the records, Mr. Bronfman and his family's Montreal-based investment company, Claridge Inc., were linked to an offshore trust in the Cayman Islands that was set up by Jonathan Kolber, Leo's son, who left Canada to live in Israel decades ago.

Mr. Trudeau's family has previously stayed at Leo Kolber's residence in Florida, but the Prime Minister's Office said they have not returned since Mr. Trudeau won the 2015 election.

Mr. Bronfman issued a news release on Monday to state that his only interaction with the Kolber Trust was a loan made more than 25 years ago, repaid within five months, "in full compliance with all legal requirements, including with respect to taxes."

"Stephen Bronfman has never funded nor used offshore trusts. His Canadian trusts have paid all taxes on all their income to the Canadian Government," said the statement, which added that Mr. Bronfman had no other comment to make on the matter.

Liberal Party spokesman Braeden Caley played down Mr. Bronfman's connection to the party.

"Mr. Bronfman's role with the Liberal Party of Canada is as a volunteer, and has consisted strictly of assisting the board on matters related to building on the Liberal movement's strong grassroots fundraising support, not policy decisions," Mr. Caley said in an e-mail.

But the Conservatives called on the Liberals to reimburse all of the money raised over the years by Mr. Bronfman, and to explain the exact nature of his dealings with the government.

"This is more than just a volunteer. Look, not every volunteer got taken to Washington for a state visit with [former U.S. president Barack] Obama," Mr. Scheer said of the 2016 trip by the Prime Minister and his closest allies. "It sounds to me like [Mr. Bronfman] did more than just knock on a few doors or lick a few envelopes."

NDP finance critic Alexandre Boulerice said his party will continue to push the government to crack down on tax havens. He pointed to an NDP motion to end tax loopholes that passed in March with Liberal support.

"They're not doing it. Why? Maybe there's some friends of the Liberal Party who benefit personally because of those deals," Mr. Boulerice told reporters. "If you don't change the laws, if you don't change the fiscal conventions that you have with those places, of course it's legal and nothing will change."

National Revenue Minister Diane Lebouthillier said the crackdown on tax evasion and tax avoidance will continue in partnership with authorities around the world.

Senator Percy Downe countered the government may have allocated $1-billion in long-term funding to the CRA to fight tax evasion, but that it only spent $35-million of the new money on that front in 2016-2017. He added the agency remains vague on the actual amount of money that it has been recovering as part of its increased auditing efforts.

With a report from Robert Fife