Seeking Some Substance - Part 1

In yesterday's Star, Christopher Hume had occasion to call Prime Minister Trudeau the princeling practitioner of the politics of appearance. In light of an alarming shortfall in revenues that is crippling our services thanks to the government's anemic corporate tax policies, that struck me as a particularly apt description.

Indeed, that element of his persona was very much on display for the world to see last week at Davos, where Mr. Trudeau had some stirring words :

"Too many corporations have put the pursuit of profit before the well-being of their workers … but that approach won't cut it any more," Mr. Trudeau told the elite gathering at the chic ski resort of Davos. "We are in a new age of doing business – you need to give back."

Apparently, however, that sternness of tone seemed more designed for public consumption than real-world application. If that is not the case, one has to wonder why Canada appears to be very soft in the corporate taxation department:

In a joint investigation with Corporate Knights magazine, the Star last month revealed the government has never collected a lower proportion of its taxes from corporations than it does now.

In 2016, Ottawa collected $3.50 in income tax from individuals for every $1 it collected from businesses.

The foregone tax revenue is significant:

The Star/Corporate Knights investigation revealed that Canada’s 102 largest corporations collectively avoided $62.9 billion in income taxes over the past six years. On average, that’s $10.5 billion less per year than if they paid the official corporate tax rate.

It’s also an average of $100 million missing from the public purse per company, per year.

So what is to be done about it?

Well, first off, they can start by emulating other countries that have thus far recovered $500 million in unpaid taxes thanks to revelations from the Panama Papers.

The Panama Papers have proved a treasure trove for some countries, with Spain recovering the most unpaid tax so far. Its national revenue agency announced in November a $156-million windfall from taxpayers with hidden funds. Most of that — $128.4 million — came from voluntary disclosures, where the taxpayers came forward themselves following the leak to declare previously unreported income.

The Australian Tax Office said last month it has collected $49 million thus far as a result of the Panama Papers revelations. Australian tax officials snapped to action following the leak, executing 18 search warrants in just a one-week span in September 2016, at one point seizing 170 kilograms of silver bullion and coins.

Even Ecuador, which historically has had problems collecting tax from its citizens, says it has recouped $82.6 million.

Perhaps, not surprisingly, Canada has recovered nothing:

The Canada Revenue Agency maintains it will be at least another 2½ years before it will have an idea of how much it might recoup.

The stark contrast is fuelling criticism of the CRA's effectiveness at catching offshore tax cheats, and comes in the wake of a CBC investigation last month that found few, if any, of the criminal convictions the agency cites in defence of its record actually have anything to do with offshore tax evasion.

In fact, that investigation revealed that small businesses are the most likely targets of CRA wrath:

... Canadians convicted of tax evasion over the past two years are far more likely to be tax protesters or small business people who failed to declare all of their income.

And to make their statistics look better than they are, the CRA

counted each article of the law as a separate conviction.

For example, in the case of New Brunswick-based George's Heating and Plumbing, the agency counted two charges against the business as separate convictions, in addition to the convictions of five employees for having treated personal expenses as business expenses. While they were all part of the same case with the same court file number, on the CRA's list they counted as seven of the 78 convictions.

There is every reason to believe that the hands-off approach to corporate malfeasance, perfected during the Harper years and instilled as an operating ethos in the CRA, is alive and well; the current government apparently has no intention of changing that.

More evidence of this mindset, as well as the ongoing offshore tax evasion being widely practised by Canadian corporations, and what can be done about it, will be addressed in Part 2 of this post.

Trudeau Town Halls: Baubles Of Distraction, Not Questions Of Substance

Prime-Minister-For-A-Day Kim Campbell is probably best remembered for saying, “An election is no time to discuss serious issues.” She might just as well have been talking about town halls, particularly the kind our Prime Minister is currently in the midst of.

Justin Trudeau's meet-and-greet will undoubtedly constitute a public-relations success. That success, however, will be thanks to two things: Trudeau's ease in front of large crowds, and the profound colloquialism and ignorance of the people attending these sessions. It is the latter I wish to address today.

In theory, town halls, being somewhat unscripted, are an opportunity to put the convener on the hot seat. Unfortunately, the topics thus far brought up have been tritely predictable and easily defused, no doubt because they are exactly what the PMO has prepared Mr. Trudeau for. Consider, for example, what was asked at his Sackville gathering. While the questions may be important to the posers, they lack, shall I say, a certain concern for national and international issues that the government is, in my view, badly fumbling. Here are two examples:

Abdoul Abdi’s sister Fatouma Alyaan asked ‘Why are you deporting my brother?...My question to you is if it was your son, would you do anything to stop this?’

And this one:

Why do we have medical doctors who come here from different countries who are unable to integrate into the system?

To be sure, he was also asked about his visit to the Aga Khan's private island retreat, for which Trudeau has been rebuked by outgoing ethics watchdog Mary Dawson, but again, this was a predictable and easily-handled question for which I am sure the Prime Minster was well-prepared.

The questions at yesterday's session in Hamilton were similarly trite and predicable:

Prime Minister Justin Trudeau told a woman heckling him about Omar Khadr during a town hall in Hamilton that he, too, is angry about the multimillion-dollar settlement the former Guantanamo Bay inmate received from the government.

“The anger that some people feel, and that a lot of people feel about the payment the government made to Omar Khadr is real and quite frankly — this might surprise you — but I share that anger and frustration,” he said.

Score another one for good preparation.

Yet I can't help but wonder how Mr. Trudeau would respond if truly important questions were asked of him. Questions like the following:

Why does your government insist on protecting the rights of multi-nationals to sue our government over legislation that might interfere with their profits?

Known as investor-state dispute settlement, it is a mainstay of NAFTA and eagerly sought for the TPP. So far, Canada has been sued five times under NAFTA provisions for trying to protect the environment.

Another question well-worth posing would pertain to the government's continuing support for the immoral Saudi arms deal, arms that have been shown, in contravention of the deal, to have been used against Saudi citizens.

In July, after The Globe and Mail's reporting of conflict in Awamiyah, Foreign Affairs Minister Chrystia Freeland issued a statement saying she was "deeply concerned" and announced a probe of the incident.

The Trudeau government has never released the results of this investigation nor has it explained to Canadians what happened.

These are the questions I would ask on this issue:

Why have you refused to release the report, and why is your government now trying to quash the most recent legal challenge to the deal, an attempt that a federal court judge has rejected?

Finally, I would ask about the Trudeau government' attitude toward tax cheats using offshore havens:

A dozen governments around the world say they've recovered a combined $500 million in unpaid taxes so far thanks to the Panama Papers leak of tax-haven financial records in 2016.

But not a penny of that is destined for Canadian government coffers. The Canada Revenue Agency maintains it will be at least another 2½ years before it will have an idea of how much it might recoup.

When other governments are enjoying considerable success in recovering tax money thanks to the Panama and Paradise papers, why is your government and the Canada Revenue Agency so reluctant to aggressively pursue them?

So those are some of the questions that will likely not be asked at the town halls. God forbid that this government should actually have to make an honest accounting of itself to the Canadian people.

Not At All Like His Father

That is the opinion of Star letter-writer Colin Languedoc who, along with Mubashir Rizvi, shares my disappointment in Justin Trudeau's craven capitulation to bullying by Donald Trump and his minions.

Canada sits on its hands for UN vote, Harper, Dec. 22

Tim Harper’s excellent column about the UN vote denouncing the U.S. embassy move brings into sharp relief how badly our federal government is representing Canada.

Instead of taking a principled stand and joining most other countries in condemning the move, Ottawa abstained from the vote to avoid annoying the Trump administration.

What makes this episode particularly pathetic is the contrast between Prime Minister Justin Trudeau and his father. When Pierre Trudeau was at the helm, he did not hesitate to set out positions diametrically opposed to Washington on international controversies like the Vietnam War and relations with Cuba.

This issue shows how far the apple has fallen from the tree.

Colin Languedoc, Toronto

Canada abstains on UN’s rebuke of Trump’s plan, Dec. 22

I was shocked that Canada chose to abstain from voting at the UN vote calling on the U.S. to withdraw its recognition of Jerusalem as the capital of Israel.

As a Canadian, I was hoping for a better response from my Liberal government than what the previous Conservative government would likely have done.

Canada has prided itself in playing a more progressive and just role in the illegal usurpation of Palestinian lands by the state of Israel. But all that belongs to the good old days. The Liberal government appears to be more interested in appeasing U.S. President Donald Trump than doing the just and rightful thing.

With the UN vote, Canada could have demonstrated that it stands with the rest of the world in condemning this move. It is speculated that Canada did not vote because Trump threatened the U.S. would be watching.

However, just as Trump and his divisive administration were taking names, so was the rest of the world, including Canadians like me. And what I saw made me wonder how far Canada has deviated from our principled Canadian positions. I expected more from my Liberal government.

Mubashir Rizvi, Pickering

Is There No Bottom To Canada's Shame?

Apparently not, if you are talking about the craven, rudderless and unprincipled Trudeau government that is making us all look bad.



As reported by CBC, a toadying and craven Canada is accepting the above Haley invitation, a thank you for not opposing the Trump resolution to recognize Jerusalem as Israel's capital:

U.S. Ambassador to the United Nations Nikki Haley is throwing a party for all the countries who didn't vote against the United States on its controversial bid to recognize Jerusalem as the capital city of Israel — and Canada plans to attend.

Given the cost to Canada's principles and reputation, I hope it is an exceptional party that Mr. Trudeau et al. feel is worth the heavy price of admission.

On Public Asset Sales

Selling off public assets that yield steady and lucrative revenue streams is rarely a good idea. In Ontario, Kathleen Wynne did just that with 60% of Hydro One so she could claim a balanced budget. It is a betrayal I will never forgive her for.

As I have written previously, Justin Trudeau would like to do the same thing, for similar reasons, with our major airports. It is a very bad idea, as are most of the schemes promoted by neoliberals.

Happily, the possibility of relief from such madness is shimmering on the horizon:

A Parliamentary committee is recommending against the Liberal government’s plan to sell off Canada’s airports to raise billions in capital to be used towards other public infrastructure projects.

“Limit rising passenger and operational costs by preventing the privatization of Canadian airports,” the House of Commons Standing Committee on Finance, said in its report of the Pre-budget consultations in advance of the 2018 federal budget.

The committee's report, Driving Inclusive Growth: Spurring Productivity and Competitiveness in Canada

summarized the strong opposition to airport privatization by various stakeholders, including the Air Transport Association of Canada (ATAC), which believes that the sale is near-sighted and will result in significantly higher costs for airlines and passengers.

“Recent experience in such projects, for example in Australia, has resulted in costs per passenger to increase by 50% in the decade following airport privatization,” ATAC told the committee in a briefing. “To add insult to injury, the government would impose a huge new burden on our industry and its passengers while not reinvesting one penny of the billions generated back into aviation.”

Empirical evidence like this should carry much weight, but the Trudeau government is refusing to release the privatization study by Credit Suisse Group AG that it commissioned. Therefore, whether such disquieting facts were even considered is unknown. This unwholesome secrecy is opposed by the National Airlines Council of Canada, which is calling for open and public discussion around the entire issue.

I seem to recall Justin Trudeau, upon taking office, promised an open and transparent government. What a difference two years in office have made to that promise, eh?

UPDATED: An Increasingly Tattered Cloak

That would be the one Justin Trudeau wraps himself in with such rectitude whenever he attempts to convince the public of his climate-change bona fides. Increasingly, both his cloak and his rhetoric are wearing thin.

The latest example of the hollowness of his public persona comes with news that his government is doing something it shouldn't be doing, interfering in provincial rights:

The B.C. government says Ottawa is interfering in an independent review connected to the Kinder Morgan Trans Mountain pipeline expansion, just days after Alberta Premier Rachel Notley called on Ottawa to intensify its efforts to defend the project.

"It's both a highly unusual and a highly troubling intrusion on a province's right to enforce its own permits, its own regulations and the interests of its own citizens," B.C. Environment Minister George Heyman said in an interview on Wednesday. "We do not take kindly to this intervention."

Federal Natural Resources Minister Jim Carr announced in a statement on Wednesday that Canada has filed a letter to the National Energy Board supporting a process to quickly resolve conflicts with local and provincial governments that could slow down construction on the pipeline.

It would seem that the powers to whom both Trudeau and Alberta's Rachel Notley answer are unhappy:

The NEB is hearing a complaint from Kinder Morgan, which has already begun construction, that the city of Burnaby, B.C., is blocking the project by refusing to issue four permits. The city, which opposes the project, denies any unreasonable delay.

The company – now with Ottawa's support – wants a standing panel to allow any future permit disputes to be resolved quickly.

In Calgary on Wednesday, the NEB heard Mike Davies, Trans Mountain's senior director of marine development, say the company's dealings with Burnaby have been difficult for some time.

B.C. Environment Minister George Heyman doesn't care that the pipeline giant has its knickers in a twist:

"The federal government should not be intruding on provincial rights and authority," he said.

"I would expect the National Energy Board, which in this case has the powers of the federal court, to understand that we as a province have a responsibility and a right to both permit and enforce our own standards. "

It would seem that Mr. Trudeau and Ms. Notley only have ears for one entity here: Kinder Morgan.

Now why does that not surprise me?

UPDATE: NDP leader Jagmeet Singh has now entered the fray. Whether this is mere political opportunism or principle, only time will tell.

NDP Leader Jagmeet Singh slammed the Trudeau government on Wednesday for its "betrayal of the people of British Columbia" in order to support a large corporation, Texas-based multinational energy company Kinder Morgan.

Trudeau had promised during the 2015 election campaign to introduce a brand new environmental review process to assess the Kinder Morgan project. But once elected, the prime minister approved the pipeline last November based on an assessment by the National Energy Board (NEB) under controversial rules adopted by the former Harper government. Singh said that Carr's new proposal was a second "betrayal" of the west coast province.

"They’re supporting the rights of a corporation to override the decision making of an elected body, the municipality of Burnaby," Singh told reporters. "That to me is a massive concern. That is something that is very troubling and it’s the second major betrayal of the people of British Columbia."

C'mon Bill. Just Answer The Question

The beleaguered Bill Morneau continues in his refusal to answer questions about whether he sold a whack of shares in his company, Morneau Shappell, before the government introduced changes to tax rates dropping the income tax rate for middle-class Canadians while boosting it on high-income earners. Those rates were to take effect on Jan. 1, 2016, prompting financial advisers to advise high-income earners to realize capital gains in the last weeks of 2015 to avoid the coming higher tax rates.

The 680,000 shares were sold for $15 apiece. By Dec. 14, a week after the tax rate announcement, they had dropped to $13.96.

Employing a time-worn technique practised by scoundrels far and wide, Morneau is embracing moral outrage, threatening to take the Opposition to court over the impertinence of their questions:

Morneau said if the Opposition wants to make its claims outside the Commons, where MPs enjoy the legal protection afforded by parliamentary privilege, they will “absolutely be hearing how the legal system works.”

His strategy did not work:

Shortly after Question Period began, he [Pierre Poillievre] challenged the now-absent finance minister to take things outside.

“Would he commit that if I go out and repeat my question in the lobby at this moment, that the finance minister will meet me out there and answer the question?”

Poilievre then walked out, and did just that. But he was greeted by an empty lobby, as Morneau had already left to deliver a scheduled speech in Toronto.

It would seem that old Bill needs some lessons in basic poker strategy.

Lest one think this is just a nasty partisan fight between the Conservatives and the Liberals, the third party also smells some rot:

The NDP is also taking aim at Morneau over the share sale. The party's ethics critic, Nathan Cullen, has written a letter to Ethics Commissioner Mary Dawson, requesting she investigate.

"If the finance minister used his inside knowledge to sell his shares at an advantageous time to financially profit, it would be in direct violation of the rules that prevent someone from profiting directly from their work in government," Cullen wrote in a letter that was sent Monday afternoon.

"I respectfully ask that you look into this matter as urgently as possible," the letter says.

As a political neophyte, Mr. Morneau has much to learn. He might start his lessons by checking with average Canadians about how they feel when privilege once more apparently games the system and leaves the rest of us holding the proverbial bag.

UPDATED: A Sad Day In The House

It is indeed a sad day in public life when a worm like Pierre Poilievre can stand up in the House of Commons and seem to occupy the high moral ground as he renders ethical judgement on a minister of the Crown. Yet the government of Justin Trudeau has brought this odium on itself by harbouring Bill Morneau from the kind of standards all Canadians should expect from their politicians:



The Star reports that the sale of $10.5 million worth of shares in Morneau's company, Morneau Sheppell, occurred on Nov. 30, 2015,

a week before the Liberal government formally introduced changes to tax rates — dropping the income tax rate for middle-class Canadians while boosting it on high-income earners.

Those rates were to take effect on Jan. 1, 2016, prompting financial advisers to advise high-income earners to realize capital gains in the last weeks of 2015 to avoid the coming higher tax rates.

The 680,000 shares were sold for $15 apiece. By Dec. 14, a week after the tax rate announcement, they had dropped to $13.96.

Morneau held two million shares in Morneau Sheppell and sold half of those in the fall of 2015, a source has told the Star. Profits from those sales were donated to charity. The National Post has reported that the shares sold on Nov. 30 were held by Morneau.

Liberal loyalists and apologists will no doubt assert that the fact the profits from the sale were donated to charity means this is a non-issue. To argue thus, however, is to miss two key points:

The donation itself would have afforded Morneau a very handsome tax benefit.

That insider trading was committed by the Minister of Finance (that he refused to exonerate himself by answering the question suggests his guilt) renders him unfit for public office. How can Canadians believe the government has its best interests at heart if it shields such egregiously unethical behaviour?

Morneau should be compelled to answer the question. If the answer is what I think it is, he should finally do something honourable and resign.

UPDATE: Democracy Watch has a Government Ethics Campaign you may want to check out. It has already sent out over 170,000 letters about this issue.

Bill C-27: A Followup

In yesterday's post, I discussed Linda McQauig's article about the purpose of Bill C-27, the Trudeau- Morneau pension bill that would eviscerate Defined Benefit Plans for those working for the federal government and those industries that are federally regulated, including the obscenely profitable banking sector.

In today's Star, readers express sentiments that few would disagree with:

Morneau and Trudeau looking out for the rich, McQuaig, Nov. 23

Thanks to Linda McQuaig for highlighting the Liberal government’s plan to convert guaranteed pension plans to the much riskier defined plans, which guarantee nothing.

I have only read about this issue in articles about the conflict of interest issues around Finance Minister Bill Morneau.

In my opinion, people would be less outraged about Morneau if they were made aware of the pension change that could drastically change their lives.

I’m hoping that the Star will run a front-page weekend editorial about this pension issue, because I’m betting most people know nothing about the changes the Liberal government is quietly planning to pass.

We frankly have no opposition in the federal government to hold the Liberals accountable.

We should all be outraged and frankly very afraid about our financial futures.

The rich continue to get richer and the middle class poorer.

Marnie Archibald, Barrie, Ont.

It’s clear that the Trudeau government, for all its noise about the plight of the middle class, is still primarily in the service of the wealthy and the corporate elite. Why else would they follow Harper’s Tory path and try to put an end to defined pensions?

Thanks to the Star’s opinion piece by Linda McQuaig, we are reminded again of Finance Minister Morneau’s determination to maintain the priority and preferential position of corporate CEOs and shareholders over the interests of employees who thought they had a contractual retirement deal they could count on.

Of course, employers would rather have employees take their chances on retirement security. Of course, corporate officers prefer to maintain their own defined and generous pensions. But these are feudal attitudes. Our society is less and less fair, more jobs are more and more precarious and retirement security is available only to the wealthy. This is a situation that deserves far more editorial attention and the big headlines as well.

Bruce Rogers, Lindsay, Ont.

The Secret Handshake

In her column in today's Star (which does not yet appear to be available online), Linda McQuaig points out the remarkable similarities between the government of Justin Trudeau and that of Stephen Harper when it comes to facilitating the erosion of defined benefit pension plans. She observes that as a consequence, it is becoming easier for the rich to get richer while ordinary citizens become poorer.

An example of this is currently being played out in Ottawa as the Trudeau government — ostensibly a “progressive” government that champions the middle class — is moving forward with legislation aimed at stripping away pension benefits from potentially hundreds of thousands of Canadian workers.

The most immediate problem stems from Finance Minister Bill Morneau's Bill C-27, whose details MoneySense recently provided:

Bill C-27 is an Act to amend the long-standing Pension Benefits Standards Act. Those in favour of pure Defined Benefit (DB) pension plans have criticized Bill C-27, saying it would allow federally regulated employers to replace DB plans, which provide a guaranteed retirement income for life with no risk, with Target Benefit Plans (TBPs) which are also generous pensions but because they count on employees taking on some risk, final retirement guaranteed payments may not be as iron-glad.

Both private sector and government employees will be affected by this bill:

It would allow federally regulated private sector and Crown Corporation employers to offer a TBP to their employees, or to convert an existing DB pension plan into a TBP [Target Benefit Plans, also known as Defined Contribution Plans].

While Moneysense, with its own biases, sees this as a good change, Linda McQuaig offers a different interpretation:

... Certainly, Morneau’s legislation puts the Trudeau government fully on the side of corporate interests who, in recent decades, have been trying to take away hard-won workplace benefits that helped workers enter the ranks of the middle class in the early postwar years.

A key corporate goal has been to replace old-style workplace pensions, where workers are guaranteed specific benefits in retirement, with new-style pensions, where benefits aren’t guaranteed and can shrink if markets fall.

When this kind of change was first championed by Harper, Trudeau appeared to be on the side of the angels, as he

sided strongly with the outraged workers, denouncing Harper’s pension changes as “wrong in principle” and “unacceptable.”

But, after Trudeau became prime minister in 2015, workers were surprised when his new government quietly introduced a strikingly similar version of Harper’s pension changes.

Mr. Trudeau appears to want it both ways, his public image apparently never far from his mind:

The Trudeau government defends its proposed changes on the grounds that workers must “consent” to having their pensions converted to the new riskier format.

But this is like the “consent” given by women who get groped by a powerful boss; employers can get their unionized workers to “consent” by locking them out if they don’t agree to the pension change at the bargaining table.

To provide some penetrating perspective, McQuaig discusses banking, one of the federally-regulated industries that stands to benefit from Trudeau's 'change of heart.'

The corporate keenness to foist riskier pensions on their workers is not driven by necessity. Corporate profits have risen significantly in recent years, even as companies have switched to the stingier pensions that transfer all risk to employees.

Even fabulously rich corporations are adopting the new pensions — not because they can’t afford to pay workers fixed pension benefits like they used to, but because they’d rather not be obliged to do so.

Take the Royal Bank — with staggering profits of $10.5 billion last year. In 2011, RBC adopted the new-style pensions for all new employees.

Jesus said that the poor will always be with us. With the secret handshake that exists between government and private interests, that seems guaranteed.

On Tax Fairness

Ed Broadbent recently wrote on the need for real tax reform, calling for an end to the various favours our government bestows on the ultra rich. His thesis was compelling:

Tax avoidance and evasion by the rich ultimately undermines democracy: it starves social programs and public services, increases after tax income and wealth inequality, and further concentrates economic resources in the hands of a few. The overall message to a majority of Canadians is that the rules of the economic game are rigged against them.

He went on to excoriate the Trudeau government for its hypocritical failure to pursue real tax reform:

The Liberals promised change. In their 2015 election platform, they promised to “conduct a review of all tax expenditures to target loopholes that particularly benefit the top 1 per cent.”

But there has been no broad public review in which citizens could participate. And action to date has been limited to stopping abuse of some private corporation rules. Minister Morneau has said he will impose higher taxes on the small number of private corporations that shelter investment assets of more than about $1 million, which is an action that should be supported.

While I did not agree with all of his suggestions, I doubt there would be many who would dispute Broadbent's thesis. In today's Star, readers offer their views on his piece as well as the sickening truths made evident in the recently-released Paradise Papers. Here is but a sampling of their thoughts:

Ed Broadbent writes, “The case for taxing investment income on the same basis as employment income on the grounds that ‘a buck is a buck’ dates back to the Carter Commission of the 1960s when another Liberal government failed to act on it.”

The problem is the ultra-rich are Prime Minister Justin Trudeau’s personal friends and he prefers to run defence for them than to do what is right for the public good.

Former finance minister Allan MacEachen tried to reform the tax system under then-prime minister Pierre Trudeau but, like Carter before him, the government of the day distanced itself from any idea of true reform and let both of these truly honourable men get practically eviscerated by all the real (rich) powers. It’s all about the Golden Rule: “Them that’s got the gold makes the rules.”

Jennifer A. Temple, Welland, Ont.

After decades of tax avoidance by Canada’s wealthy, we now have the exposure in detail of the Panama Papers and the Paradise Papers.

Our current federal government assures Canadians it will restore the principle of tax fairness. Why should Canadians believe this promise? It is the political process and our elected MPs that preserve this economic injustice.

As the Star reported, Parliament and those who bankroll them control the law. It is highly unlikely the wealthy will forfeit their advantage simply because Canadians think it’s unfair.

Talk is cheap and the government won’t move until pushed. I challenge all Canadians to organize a Canada-wide tax boycott. Until tax fairness is achieved, we should refuse to pay any taxes owing, beginning April 2018.

And every MP should be lobbied to support an immediate tax overhaul. Tax fairness can only be achieved by law, not mealy mouthed promises by those concerned only with preserving their own self-interest to the detriment of the rest of us.

Gordon Wilson, Port Rowan, Ont.

Ed Broadbent shines a bright light on the biggest issue of our time: tax reforms that will cut through many complex aspects of our socioeconomic system.

A progressive and clearly defined tax system would address many issues we have been struggling with since the dawn of the 21st century.

We need a tax system that encourages savings and productive investments, while it shifts the tax burden from working people to the wealthy and big corporations. For many years, the middle- and lower-class have been paying taxes while the rich have been taking advantage of it.

A reformed tax system will prevent the creation of generations of wealthy individuals and corporate monopolies, which have taken advantage of societal privileges without paying their fair share. The wealthy have made their money on the backs of the working people.

The Paradise Papers show how the rich, with the help of law firms, have parked 12 per cent of the world’s wealth in offshore accounts, which does nothing to improve the economy. The sheer number and diversity of people and corporations involved in these tax havens is frightening. It is truly like discovering a galaxy of hidden money that public officials have a hand in helping hide away.

Reforming the tax system is possible if there is political will.

Ali Orang, Richmond Hill

UPDATED: A Pro Forma Response

While Justin Trudeau will undoubtedly be praised by some for his polite reaction to these activists, his perfunctory response tells all you need to know about the disparity between his usual soaring rhetoric and his increasingly disappointing environmental performance.

Prime Minister Justin Trudeau thanked a pair of environmental protesters for their "activism" after they interrupted a press conference in Vancouver to question his commitment to fighting climate change.

Hayley Zacks, 20, and Jake Hubley, 24, rose from their seats to ask the prime minister for a "moment of his time" so that he might explain why he approved the contentious Kinder Morgan Trans Mountain pipeline expansion.

The prime minister let the protesters say their piece but did not defend his position on resource projects.

Zacks noted the project will run through unceded First Nations territories and said young Canadians are scared the planet will become "unlivable" because of climate change.

"The Kinder Morgan pipeline is going to increase emissions from the tarsands, it is going to poison our water, our lands, and everything that we hold dear," she said before being escorted away by security members.

"Thank you for your questions, for your activism. Keep up the activism please," Trudeau said. "It's great to see young people stepping forward and sharing their concerns and views. We certainly take those very seriously."

UPDATE: This is the kind of environmental disaster that seems inevitable, Mr. Trudeau's enthusiasm for pipelines notwithstanding:

TransCanada Corp. said its Keystone pipeline has leaked an estimated 795,000 litres of oil in Marshall County, S.D., just days before Nebraska is set to decide the fate of its Keystone XL pipeline.

The company said its crews shut down the Keystone pipeline system early this morning between Hardisty, Alta., and Cushing, Okla., and a line to Patoka, Ill., and that the line is expected to remain shut while it responds to the spill.

Canadians React To The Paradise Papers

If you aren't yet outraged over recent revelations, check your pulse to make sure you are still amongst the living.

Happily, signs of life are plentiful among Toronto Star readers:

Liberal Party fundraisers held family millions in offshore trust, Nov. 6

Coverage of the Paradise Papers’ celebrity tax evaders has tended to revolve around the potential illegality of their actions. For example: how “blind” the offshore trusts of Stephen Bronfman and Leo Kolber actually are. I imagine most Canadians could care less whether Bronfman’s $60-million, tax-free snowball is being managed from home or from offshore. The real issue is, why is it legal in the first place?

The answer, which these leaks are revealing, is that our federal leaders are so beholden to Canada’s richest men — their chief fundraisers — that substantive crackdowns on these schemes are being prorogued. [Emphasis added]

These tax evasions are a spit in the eye to the Liberals’ fabled “middle class,” let alone to the 12 million Canadians who collectively own less than our richest 100 families.

Jeremy Withers, PhD student, University of Toronto

Thank you again for enlightening us on the machinations of the 1 per cent to avoid paying their fair share of taxes. An outstanding editorial. Surely, I am not the only one thinking of voting for the NDP in the next federal election.

Norma Martinez, Toronto

One of the main reasons for U.S. President Donald Trump’s victory was the snail-pace change to the status quo. People are fed up with the failure of governments to act. Whether the Paradise Papers news is based on legal or illegal actions of wealthy people or organizations is irrelevant. We must find ways to finance the needs of the populace and it is evident that this must come from those who have. Unless the current government acts decisively to outlaw these types of actions, Canadians, too, will either not vote or seek alternative populist methods. Justin Trudeau, be warned. [Emphasis added]

Harry Coupland, Etobicoke

This four-page article about offshore tax havens proves the point of American billionaire hotelier Leona Helmsley, who famously said: “We don’t pay taxes; only the little people pay taxes.”

It seems that democracy is on sale. The rich families finance politicians to fight elections and, as a quid pro quo, politicians protect their wealth through favourable legislation.

The article shows how Leo Kolber, a wealthy man who had accounts in offshore money centres, was appointed senator and then became chairman of the Senate’s powerful banking committee. He held back proposed unfavourable legislation on offshore trusts for 14 years.

These multimillionaires are not paying their share of taxes, forcing government to cut back on social services, health care, education, affordable housing, etc. It is estimated that the Canadian government is losing $6 to $8 billion per year in tax revenue. [Emphasis added]

Is it too difficult to force countries like Panama and British protectorates like Grand Cayman, Isle of Man and the British Virgin Islands to stop hiding money for wealthy Canadians.

Anis Zuberi, Mississauga

It is in the public’s interest to take tax avoidance seriously because we now know this is not a one-shot deal carried out by the odd, cunning billionaire, but rather a widespread scheme common among the wealthy.

We can no longer consider tax dodging and offshore accounts to be trivial, when everyone from the Queen to U.S. President Donald Trump’s cabinet are benefitting from them.

It is especially important for lower- and median-income households to care about this epidemic because it is they who suffer from the increased taxation and lack of public funding caused by the millions lost in tax revenue from offshore holdings. [Emphasis added]

It is the vulnerable and the poor who get the short end after this game is played out and it is time they force this issue into the public sphere and demand it be made a talking point.

Benjamin Rawlings, Ottawa

The Point Is

In her latest iPolitics article, Kady O'Maley offers the view that the revelations of The Paradise Papers do not constitute a scandal for Justin Trudeau and his government. And while the Scheer-led Opposition is making every predictable effort to connect non-existent dots, few are suggesting that Trudeau had any personal knowledge of the alleged offences committed by chief fundraiser Stephen Bronfman, who has stoutly denied any wrongdoing.

However, to assert Trudeau's blamelessness in all of this is to look only at the immediate situation, one that Justin undoubtedly made worse with his unseemly and ready acceptance of Bronfman's innocence, about which I posted last evening. The larger implications of the ease with which the ultra rich transfer their money to jurisdictions beyond the reach of the tax man constitute the real threat to our democracy and our way of life.

Recently, I wrote this:

The revelations now in the public arena thanks to the collective efforts of hardworking journalists reinforce a perception that many, many people have held for a long time: the tax system is gamed, and talk of tax fairness is simply convenient posturing that ultimately means nothing. This perception/reality is very damaging to public morale; those who believe in paying their taxes are now being shown that they are, in fact, the patsies for their betters.

Nothing could be worse for those who believe in a society where all of us pay to maintain a social safety net, programs to help the disadvantaged, and a public medical system where no one is turned away because their wallet is too thin. Just more fodder for the rabid right wing, and governments have no one but themselves to blame.

It is a sentiment recently echoed by Thomas Walkom:

... tax havens have proved so embarrassing that they put the entire government revenue-raising machine at risk.

The cost to Canada’s federal treasury of offshore tax havens is estimated at between $6 billion and $8 billion a year. While that may seem a lot of money, when compared to the roughly $300 billion that Ottawa pulls in each year, it is relatively small.

Most tax revenue comes from the broad middle-classes — people who are willing to pay as long as they deem the system fair. Revelations, like those in the Paradise Papers, which detail at an individual level how the wealthy and well-connected get special treatment, break that trust. This threatens the entire fiscal basis of the state.

Put succinctly, no one wants to be played for a fool. And it is that fact that makes the cossetting of the utra rich by governments so dangerous.

In its editorial today, The Star offers this:

The latest revelations from the leak of the Paradise Papers raise troubling questions, not only about government’s failure to collect what’s owed, but also about the power of money to subvert our democracy.

They serve as a reminder that those who can afford to hide income from the taxman can also afford to hire the very best lobbyists to help ensure that, whatever the public interest, governments don’t close the loopholes that allow tax avoiders to get away with it.

There is, of course, a solution to all of this, one that I am not holding my breath waiting for:

The Paradise Papers are doing nothing to soothe those who worry about the unseemly intertwining of money and power in politics or about the extent to which the economy is rigged by the few against the many. The government can do something about that. It can, for instance, close unfair and ineffective tax loopholes and collect what’s owed. Or it can sit back, defend the current arrangements and watch the cynicism grow.

It would be nice to believe that The Paradise Papers will lance the massive carbuncle of complicity that exists between government and business, but like its predecessor, The Panama Papers, it will likely last only for a few more news cycles before being replaced by a feat of political legerdemain that suggests we just move along, as there is nothing to see here.

Not Good Enough

PM Justin Trudeau says he's satisfied with Liberal fundraiser Stephen Bronfman's explanation of his ties to offshore accounts, but Conservative Leader Andrew Scheer calls those remarks inappropriate.

The Prime Minister is either tone deaf, intellectually challenged, or truly and inextricably linked to the values represented by the world of the Bronfmans that he can so facilely accept the reassurance of scion Stephen that everything is above board.

Surely the Conservative Opposition, which I loathe, has a valid point here:


Nothing to see here, indeed.

The Paradise Papers

The prospect of real tax reform in Canada just got a lot dimmer. Today's release of the Paradise Papers suggests why.

CBC News is reporting this about Justin Trudeau's chief fundraiser, Stephen Bronfman:

In the early summer of 2015, Justin Trudeau was the star attraction at a private fundraiser in Montreal hosted by philanthropist and financier Stephen Bronfman.

Bronfman, an heir to the Seagram family fortune and a close Trudeau family friend, was revenue chair of the Liberal Party. That day, according to news reports, the two men raised $250,000 in under two hours.

Within weeks, the Liberals would launch their federal election campaign, sweeping to power on a "Real Change" platform that focused on the middle class and a promise to tax the rich.

"Our government has long known — indeed, we got elected — on a promise to make sure that people were paying their fair share of taxes," Trudeau said shortly after his election victory. "Tax avoidance, tax evasion is something we take very seriously."

But an investigation by the CBC, Radio-Canada and the Toronto Star has found that Bronfman and his Montreal-based investment company, Claridge Inc., were key players linked to a $60-million US offshore trust in the Cayman Islands that may have cost Canadians millions in unpaid taxes.

It's a 24-year paper trail of confidential memos and private records involving two prominent families with Liberal Party ties that experts say appear to show exploitation of legal tax loopholes, disguised payments and possible "sham" transactions.

You can read much more at the above links.

Dear Justin

Stand.earth, formerly Forest Ethics, has this message for Justin Trudeau. You can help spread the message by clicking here.

Guest Post: A Response To Flying Blind

Yesterday's post dealt with the announcement that a degree of self-regulation is to be conferred on the airline industry by the Trudeau government. Given the fraught history of self-regulation in this country, it is alarming news. BM, a frequent commentator, offered an analysis of the situation as well as an interesting perspective on what is driving that change. I am taking the liberty of featuring his insights as a guest post:

Well, it would certainly argue against flying Air Canada to San Fran, where the existing pilots seem to be having a tough job as it is. That second incident where the pilot ignored 6 request/orders to go around and couldn't see the flashing red light either was a doozy. The short interview I heard with the pilot, equipped with a plummy British accent, was revealing. Radio trouble. Oh yes? With at least three radios available, according to other pilots in various pilots' online forums. Not mentioned - blindness to flashing red lights from the control tower.

In a proper quality assurance system, amply documented and thus verifiable to process under an outside audit, where procedures are detailed to a very fine degree, letting the industry "run" itself is just fine. Electricity and Gas meters are inspected under this regime in Canada - I was involved in setting such a system up. In the 1990s, not now. It does require that company executives be part of the system as well, and part of the audit. Everyone has procedures they must know inside out, no excuses. There are avenues for considering improvements, and documentation of everyone's training and ability to follow the system. In other words, some shop foreman in a lousy mood cannot come in one morning and change what everyone does, just because HE/SHE feels like it, or there is a recorded miscompliance report which anyone can make without fear of retribution. Keeps 'em all sane.

When it comes to meatcutting or piloting, you are dealing with situations that are not boringly standard, like instrument testing. Turnover of personnel is highly likely in the meat business, and low wages with perhaps poor English skills only exacerbate problems with written procedures. Oversight is necessary. And pilots, well they all believe they know what's best and which SOPs they can disregard. You just have to go to the TSB's website and read accident analyses to see that.

The driving force for self-regulation in industry is no doubt driven by the same Public Service pointy-heads who cannot see the difference between an ordered industrial process and situations where the humans require continual oversight. The politicians are merely attracted by the promise of saving money given them by their public service advisers, so I cannot blame either Liberals or Conservatives myself. Politicians sometimes have trouble tieing their own shoelaces, let alone understanding anything complicated. And the average person hasn't a clue about the difference between quality inspection and quality assurance, the latter being the self-regulation system, the first where outsiders check every bit. You don't need to inspect every single widget if the process is under control. That's the way cars are made these days, with the possible exception of FCA.

Lack of commonsense is the problem. One process is not the same as another and may not be amenable to auditable self-regulation.

Flying Blind

Many will recall that during the Harper era, our country moved toward greater self-regulation in various industries, often with disastrous results. From tainted meat to railway disasters, the lesson is clear: leaving safety up to the corporate sector, whose prime directive is to maximize profit for their shareholders, is a dangerous gamble with the health and lives of Canadians.

Now the neoliberal Trudeau government is taking a page out of the Harper agenda, a move that will put those who fly at greater risk.

Transport Canada is planning to stop evaluating pilots who perform checks on their counterparts at the country’s largest airlines and will instead give the responsibility to the operators, a change critics say erodes oversight and public safety.

The current practice of having Transport Canada evaluate those pilots who evaluate other pilots in the airline industry will stop as of April 1 for airlines with planes that fly more than 50 passengers. This, as reported today, is a drastic departure from accepted practices in other countries, which stipulates that pilots be evaluated twice a year.

Greg McConnell, chairman of the pilots association, said the changes are pushing Canada’s aviation safety system onto the industry itself.

“I think it’s very, very important that people understand we are getting closer to self-regulation all the time.” he said in an interview. “It’s just more cutting, more dismantling of the safety net.”

The safety compromise inherent in this decision is not going unnoticed:

New Democrat MP Robert Aubin, the committee’s other vice-chair, said the decision was “curious” because Transport Canada said it was doing more oversight, not less.

“I have concerns if the pilots who evaluate their pilots are not evaluated by Transport Canada. We have to have the same standards,” he said in an interview. “We have to increase the resources at Transport Canada to make sure we can do that job.”

For the Star article carrying this story, no Liberals were available for comment, hardly a surprise given the shameful nature of their decision here.

The fear of progressive taxation that the current government has shown seems to working its way through the system. It cannot be a comforting thought for those planning their next trip by air.

Seeing With Clear Vision

H/t Toronto Star

Those who believe analysis must trump hyper-partisanship will enjoy this backgrounder provided in today's Star as part of its transparency series. The piece makes the point that The Star is guided by the progressive Atkinson principles and has endorsed in the 12 federal elections between 1968 and 2008 ... the Liberals nine times, the Progressive Conservatives twice, and the NDP once.

Those endorsements, however, do not give free reign to winning governments of the day:

Andrew Phillips is the Star’s editorial page editor. He and his team of writers and editors craft endorsements at election time.

“(While) it’s more likely that a Liberal or NDP government will be closer to the Star’s values than a Conservative one, all governments fall short,” he said. “We don’t let Liberal governments off the hook when they don’t live up to what we believe they should be doing.”

Speaking truth to power is the guiding ethos at the newspaper:

...a review of 180 editorials dealing with political matters written in the first half of 2017 shows that the Star’s editorial board is usually critical of the current provincial and federal governments.

While not exhaustive, the review found that 37 of 60 editorials dealing with Kathleen Wynne’s provincial Liberal government — 62 per cent — were overtly critical. Of 120 editorials concerning Justin Trudeau’s federal Liberals, 70 — or 58 per cent — were overtly critical.

To ignore the wrongdoing of a government with whom one is ideologically akin would be an abdication of its responsibilities:

“Most of the editorials we write about the Liberal governments in Ottawa and Queen’s Park are critical, even though we endorsed the party in both cases,” said Phillips. “But governments have to earn the trust of voters every day, not just on voting day, and we reserved the right to call them out when they fall short. They have plenty of PR folks and spokespeople to defend them every day. That isn’t our job.”

The editorial board has come down hard on the federal Liberals on a range of issues, from the government’s retreat from an election promise to end the first-past-the-post system of voting, to its handling of “cash-for-access” fundraisers. The board wrote that the government’s “fumblings and reversals” on the electoral reform will likely do “democratic damage,” and called on the Liberals to end cash-for-access events entirely.

The board has also been critical of the federal government’s handling of First Nations issues, including calling out the Liberals for taking too long to fund mental health supports on reserves.

Now more than ever, having a newspaper of record present its views in logical and coherent analysis is crucial. Otherwise, we are left only with the strident ideologues who know only one truth: their own.