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 Perspective Of Age

I suspect that much of the wisdom attributed to old age is the perspective that the years bestow. Having lived a certain length of time, it seems inevitable that people will more easily see through rhetoric and facades, much of them perpetrated by democratic governments who claim to represent the interests of the people. One example would surely be Tax Information Exchange Agreements (TIEAs) involving what many would say are a massive fraud perpetrated on Canadian taxpayers.

Under the guise of combating tax evasion, the federal government opened up dozens of tax loopholes that have allowed Canadian corporations to avoid paying tax on $55 billion in international profits over the last five years.

The money is funnelled into offshore tax havens and can be brought back to Canada tax free by multinationals based in Toronto, Vancouver and Calgary.

These offshore manoeuvres translate into billions of dollars in lost tax revenue for Canada, not because companies are cheating, but because they are encouraged to avoid taxes by government policies.

Not surprisingly, the abuses the treaties allow were engineered by the Harper government at the behest of corporations.

In 2010, Canada joined an initiative launched by the Organization of Economic Co-operation and Development to make tax havens more transparent and started signing Tax Information Exchange Agreements (TIEAs) with notorious tax havens like the Cayman Islands, Jersey, the Isle of Man and the British Virgin Islands.

At the same time, the tax code was altered to allow any Canadian multinational corporation doing business in a TIEA partner country to bring profits home tax free.

Says Arthur Cockfield, a professor of tax law at Queen’s University,

“The corporate lobby is alive and well...“Why did (the government) do it? They were persuaded by industry that it was necessary to be globally competitive.”

Yielding to the corporate lobby has proven quite costly.

A joint investigation by the Star and the CBC has found that, since the first TIEAs were signed in 2011, the deals have allowed corporations working in low- or no-tax zones like Bermuda, the Bahamas and Panama to avoid paying taxes on some $55 billion in profits. If earned in Ontario, that money would have yielded more than $14 billion in tax revenue. That’s the equivalent of nearly half of this year’s projected federal deficit.

It is, of course, quite easy to demonize the Harper government that engineered these loopholes, starving much-needed programs and placing an even heavier burden on us, Leona Helmsley's 'little people.' Moreover, the true test of whether our new government is any better will be whether or not it revokes these obscene deals.

As one who has come to the conclusion that government is not really there to represent our interests, its rhetoric notwithstanding, I'm betting that Mr. Trudeau will opt for the status quo.