On April 28th, Canadian Prime Minister Justin Trudeau announced that companies using offshore tax havens would be ineligible for the next round of government COVID-19 financial aid. Trudeau had refused to make these concessions the previous week but reversed his position after pressure from the Bloc Québécois party. The Prime Minister stated: “We will continue to ensure that those who need help will get it, but those who evade or avoid tax will not receive aid.” However, the Prime Minister’s commitment is already being questioned. Yves-François Blanchet, leader of the Bloc Québécois, responded by tweeting: “The government seems to have finally accepted. But I doubt it. We will be watching.”

Corporate tax havens work by legally diverting profits through a territory with lax tax laws, to avoid paying a fair share of taxes to the host country. A multitude of available methods makes the process difficult to legislate against. The use of tax havens is standard practice for many global corporations, including companies like: Amazon, Exxon, General Motors, Google, Newscorp, Northern & Shell Group, and Microsoft.

Multinational corporations taking advantage of tax havens actively damage their host countries. They rely on public services to carry out their business: from transportation infrastructure, police services and courts, to the healthcare and education services underpinning their workforce. All these things are funded through tax. This, of course, shifts tax burdens onto ordinary people. They must compensate by paying higher taxes themselves or face neglected and underfunded public services. Small businesses also suffer, unable to compete with this cut-throat, immoral ‘efficiency.’ All this has the effect of greatly increasing systematic inequality.

The Canadian conversation around tax havens follows similar moves by several European nations in the weeks prior. On April 23rd, French Finance Minister Bruno Le Maire announced the country’s €110 billion relief package would exclude companies registered in tax havens or operating subsidiaries within them. Denmark enacted similar measures on April 18th, with Poland before them on April 8th.

European measures have been met with similar receptions of doubt. Oxfam described France’s measures as “cosmetic,” saying the country’s blacklist represented “an almost empty list of tax havens.” Similar criticisms have been levelled at Denmark and Poland. Oxfam are right to have their doubts. Le Maire’s office confirmed France’s measures would refer only to the E.U.’s list of 12 non-cooperative jurisdictions. This list includes offenders such as Panama and the Cayman Islands but excludes notorious E.U. nations such as Ireland, Luxembourg, and the Netherlands. Without comprehensive blacklists, corporations will be forced only to tax dodge more tactically.

Whether these policies exemplify incomplete-but-meaningful progress or lip service remains to be seen. However, their potential to bring the issue of tax havens to the forefront of public perception should not be fully discounted. The coronavirus crisis represents the ideal conditions for a paradigm shift, and the economic benefits of a tax haven crackdown would be enormous.

The International Monetary Fund recently estimated that rich countries lose almost half a trillion dollars per year to corporate tax havens. Lower-income countries were estimated to lose around $200 billion dollars, although this represents a much larger percentage of their economies. Stemming the flow of these lost taxes could provide countries around the globe with desperately needed public funding. Extra money would be available to supplement strained healthcare services battling coronavirus and boost the world’s ailing economies. However, change would be needed on a dramatic scale.

The competition to lower tax rates results in a ‘race to the bottom,’ as nations outdo each other to attract the business of corporations. As such, a coordinated and multilateral effort would be needed by many nations to enact meaningful change. While the challenge is great, the effects of fairer taxation would provide practical assistance in these times of crisis – and the benefits would continue well beyond them. It is policies such as these which represent small hopes for a saner world once this crisis is over.