Overwhelming support for tax transparency: Brookfield investors demand action

Investors representing over $12 billion vote in favour of resolution at Canada’s “worst tax avoider”

BURNABY, BC – In a show of force at today's annual meeting of shareholders of Brookfield Corporation (TSX: BN), 27 per cent of Class A investors rallied behind a proposal urging Brookfield to provide enhanced transparency regarding its tax practices. The proposal was filed by the B.C. General Employees' Union (BCGEU), a long-term shareholder in Brookfield.

A critical study conducted by BlackRock reveals that 75 per cent of proposals receiving 30 per cent of votes have led to tangible action by companies. Glass Lewis recommends any resolution earning 20 per cent or more of votes should lead to engagement between investors and company boards.

Notorious for its tax avoidance schemes, Brookfield has earned the dubious distinction of being labeled Canada's "worst tax avoider" (Toronto Star, 2017). Startling figures from a 2022 report by Canadians for Tax Fairness expose Brookfield's staggering tax avoidance of $3.5 billion in 2021, placing it atop the report's roster of tax-dodging corporations.

Brookfield conducts its operations through tax-exempt entities incorporated in Bermuda, while maintaining an extensive network of subsidiaries operating in various tax havens. This alleged tax avoidance deprives governments of critical revenue required to support essential public services, including healthcare, education, and sanitation.

Ahead of the shareholder meeting, influential proxy advisor Glass Lewis, which guides over 1,200 institutions overseeing a collective $25 trillion in assets, endorsed the BCGEU’s shareholder proposal. Additionally, PIRC, GIR, and Morningstar Sustainalytics have thrown support behind the resolution. Notable investors, including BCi, CalPERS, CalSTRS, Desjardins Asset Management, and Rathbones, also backed the proposal, which calls for a tax report utilizing the Global Reporting Initiative's (GRI) Tax Standard. This proposal is first of its kind to go to a vote in Canada.

The BCGEU firmly believes Brookfield's insufficient tax disclosure hampers investors' ability to evaluate the company's risks and ascertain its commitment to responsible tax practices, which are crucial for long-term value creation for both the company and the communities it operates in.

In a statement, BCGEU treasurer Paul Finch said:

Today, investors representing over 12.5 billion in company value broke with management, voting in favor of our shareholder proposal. This vote delivers an unequivocal message that Brookfield investors need transparency regarding its tax practices. Investors have seen through Brookfield's feeble argument that such disclosure would put the company at a disadvantage. On the contrary, they recognize that holding portfolio companies accountable for tax transparency safeguards shareholder value. We sincerely hope that Brookfield heeds this strong message from its shareholders.

Since 2018, BCGEU's Capital Stewardship program has wielded its investor power to achieve robust returns while championing causes that matter to working people. Under this program, the union has successfully secured substantial ESG commitments from companies, ranging from racial equity to housing financialization, climate change, human rights, and workers' rights.

View the BCGEU's investor memo.

Review the BCGEU’s shareholder proposal.

For more information, please contact BCGEU Capital Stewardship Office at [email protected].


ABOUT BCGEU: Representing over 85,000 workers across nearly every sector in British Columbia, the B.C. General Employees' Union (BCGEU) stands at the forefront of driving change. Through its Capital Stewardship strategy, the union has submitted shareholder proposals to Canada's largest corporations on critical issues like human rights, racial equity, and executive compensation. This strategic approach has yielded remarkable success in securing commitments on pressing ESG matters.