But Is There A Will?

I was reading Owen's blog yesterday, in which he cites Robin Sears' view that, as Britain did during WW11, Canada needs to build back better post-pandemic. 

I am a skeptic as to the prospects of that happening. Here is the comment I made:

What I notice most about our current federal government, Owen, is their almost endless capacity for saying the right things, but the enacting of these aspirations seems mired in inertia. Any chance of 'building back better' would surely require a change in the taxation regime, but I don't hold my breath about that one. I read recently, for example, that despite large infusions of cash, the CRA has not prosecuted even one large tax evader, although they have called in a couple of them for 'a good talking to.'

I went back to the article and decided it merits further examination. It offers a devastating indictment, not only of the agency, but, implicitly, the government ethos it is reflecting.

Data from the Canada Revenue Agency shows its recent efforts to combat tax evasion by the super-rich have resulted in zero prosecutions or convictions.

In response to a question tabled in Parliament by NDP MP Matthew Green, the CRA said it referred 44 cases on individuals whose net worth topped $50 million to its criminal investigations program since 2015.

Only two of those cases proceeded to federal prosecutors, with no charges laid afterward.

The lack of prosecutions follows more than 6,770 audits of ultra-wealthy Canadians over the past six years.

It also comes amid a roughly 3,000 per cent increase in spending on the agency’s high-net-worth compliance program between 2015 and 2019 due to a beefed-up workforce, according to an October report from the parliamentary budget officer.

I believe, as does Matthew Green, that there are free passes for the rich, and severe penalties for the rest of us:

“The CRA is not pursuing Canada’s largest and most egregious tax cheats. And yet for a small mom-and-pop shop, if you don’t pay your taxes long enough — two or three years — then they will absolutely go in and garnish your wages … because they know you don’t have the ability to take it to court,“ he said.

To be fair, there is some validity in the claim that the wealthy have all manner of resources to try to thwart the CRA. Says National Revenue Minister Diane Lebouthillier,

“The super-wealthy are able to pay for super lawyers, super tax specialists. They can do everything to get out of paying their fair share.”

Increasingly, those individuals are going to court when audited in order to withhold documents, with about 3,000 “complex” cases now ongoing, the minister said.

However, the fact that other jurisdictions have been quite successful in their pursuits of the rich suggests that  Lebouthillier's explanation holds only limited water.

And it appears that Canada prefers a less costly, gentler, more accommodating strategy: 

Settlements are much more common than criminal prosecutions, saving investigators time and money, said Kevin Comeau, author of a 2019 C.D. Howe report on money laundering.

“The problem with that is that you don’t have on the public record that these persons did not comply with the tax law. And therefore you don’t have that public shaming and you don’t have that warning to other tax cheats out there,” he said.

But the problem will not go away, and needs to be addressed as quickly and as tenaciously as possible:

… critics say the vast troves of wealth that remain untouchable to government authorities reveal the need to tighten tax rules as well as hunt down cheats.

“In former times we didn’t see tax avoidance as a crime,“ said Brigitte Unger, professor of economics at Utrecht University whose book, ”Combating Fiscal Fraud and Empowering Regulators,“ was published in March.

“But now we see the public sector needs money, and this is effectively stealing money from public coffers, and should be treated as such.” 

As I said at the start of this post, I, for one, will not be holding my breath awaiting remediation from a government that is far, far too cozy with the moneyed class. 

Putting A Stake Through The Heart Of Harper's Lies

As a youngster, there were few things I enjoyed more than vampire films starring Christopher Lee, in my view the best cinematic vampire there ever was. Usually, at the end, either a stake through the heart or exposure to the rays of the sun ended his evil hold on people. It was a satisfying form of exorcism.

In this impending (or is it never ending?) election campaign, the only thing that will release Canadians from the foul grip of the Harper regime's lies, deceptions, attacks and secrecy is the metaphorical light that only facts and truth can provide.

And there are so many untruths and that we need to be armed against, including the one about how a low-tax regime spurs the economy and proves Harper's economic 'mastery'. Star reader Russell Pangborn of Keswick, Ontario begs to differ:

Re: Budget watchdog predicts $1B deficit, July 23

The Conservatives told us their plan to reduce taxes was good for the country. Reminds me of the disastrous low-fat diet craze. While we were obsessing about lowering the quantity of fat in a serving, we overlooked the corresponding sugar increase that was introduced to make the food palatable.

Instead of improving our health, the low-fat mania actually ended up increasing our weight and our chance of getting health-unfriendly diseases like diabetes and heart problems. The new message, just starting to get through to the public, is that some fat is actually good for us.

There have been negative repercussions related to our acceptance of the promise of prosperity with the reduction of taxes. The truth is that we are in a recession. Health care, affordable higher education, proper infrastructure all sound like reasonable endeavors funded by taxes.

Attacking the amount of fat we eat and the amount of taxes we pay has not worked. I don’t want a huge tax increase, but I do want to stop hearing that “all taxes are bad” ad campaign that is thrown out to discredit some political parties.

My overall health improved when I stopped buying only low-fat products. Let’s hope that our country’s general health also will improve when we stop following the “lower taxes are always better” refrain.

Excerpts from a missive written by David C. Searle of Toronto offer some pungent reminders of Harper's failures on the economic front:

Stephen Harper’s attack on Justin Trudeau’s “budgets balance themselves” may soon ignite an implosion of fortunes for the “omnipotent Conservative Grand Poobah,” who impetuously ditched the wise and prudent Red Tory Finance Minister Jim Flaherty’s sound $3 billion contingency fund, steering Canada back into deficit with “a barrage of tax cuts,” well aware that oil commodity storm clouds were gathering.

The highly reputable Flaherty warned against the billions that income splitting for 15 per cent of households loyal to the Harper base would cost and actually had a conscience to resolutely stand against it.

The unveiled Harper legacy is one forsaking of our military personnel with rusted, trouble-plagued submarines, obsolete air and ground assets, a born-again-like sense of purpose at the last minute for veteran’s affairs that many deem as nothing but a charade, our aged suffering from deteriorating health care infrustructure, sewage and water repair backlogs in Toronto and Montreal are direly highlighting the need for federal help, meanwhile investments are disproportionately going to Conservative ridings in less trouble-prone areas.

We can thank Finance Critics Liberal Scott Brison and NDP Nathan Cullen for requesting a Parliamentary Budget Office Update exposes Harper’s fallacy of a balanced budget in 2015 and we should be awakened by this forecast from the PBO that warns, “Doubling Tax-Free Savings Accounts and indexing them to inflation could harm Old Age Security and Guaranteed Income Supplements for the poorest of the poor the majority of which are women, yes our mothers.”

We shouldn’t buy into Harper’s fear-mongering-hysterics about terrorism, as he is merely deflecting our attention from the reality of a crumbling currency and economy.

Continuing with economic matters, J. Richard Wright of Niagara-on-the-Lake assesses Mr. Harper as a "smug corporate pawn':

Stephen Harper has never met a free trade deal he didn’t like and seems ready to sign anything placed in front of him as he turns Canada from a benevolent and caring country into a corporate fiefdom. But, in doing so, he is playing a dangerous game.

Many of the agreements have little protections for Canadian rights but he doesn’t seem to care. For the almighty dollar, he is happy to give away out country and our resources to business interests despite the damage Canada may suffer. Of course, after the damage is done, the foreign investors will just move on, leaving us with the mess.

For instance, since many of these free trade agreements have investor protection clauses in them, he has exposed every Canadian citizen, through their tax contributions, to legal action if a foreign investor doesn’t realize a return on its investment because we won’t allow them to destroy or pollute our land.

Even now there is a $250 million lawsuit against the Canadian government by Lone Pine Resources Inc. (registered in Delaware), because the province of Quebec has banned fracking for natural gas in its province. Lone Pine wants to frack under the St. Lawrence River where it says there are massive deposits of natural gas.

Farmers and others near fracking operations in Pennsylvania regularly show that their drinking water can be lit on fire. So, imagine the St. Lawrence River on fire.

Experts say that even if the suit doesn’t succeed, it creates a libel chill for governments, discouraging them from passing environmental laws for health and safety for fear it will upset foreign investors. In addition, Harper’s latest free trade agreement with the European Union is expected to generate even more lawsuits against our government.

Also, Harper is saying he will sue the provinces if they pass laws, environmental or otherwise, that interfere with a foreign investor’s profits and leads to an action against the federal government. Is there no end to this smug, corporate pawn’s lunacy?

Those who fought Dracula's evil reign were armed with garlic, crucifixes and stakes. Going into the October election, the best things we can arm ourselves with are facts, facts and more facts.

Canada's Fearless Tax Warrior

That intrepid capeless crusader for core Conservative concepts, Finance Minister 'Uncle' Joe Oliver, has found yet another weapon in his utility pouch to save us from the implacable clutches of taxation. Rather than rely on a bureaucracy that may be rife with 'fifth columnists', Oliver has decided to outsource fiscal analysis to those most acquainted with the scourge of taxation, lobby groups!

Our man's courage in the face of sneering opposition is a wonder to behold:

Finance Minister Joe Oliver says the government approved a $550-million tax credit for small business without conducting any internal analysis to find out how many jobs the measure would create.

The minister told the House of Commons finance committee Wednesday that such analysis was deemed unnecessary because it had already been done by the Canadian Federation of Independent Business, a small-business lobby group.

That 'analysis' claimed the credit would create 25,000 “person years” of employment, a figure quickly deflated by the Parliamentary Budget Officer, who concluded the credit would create only about 800 jobs over two years.

Perhaps sensing that his enemies ('the tax and spend crowd') were getting close to uncovering his alter ego, Oliver performed the perfect feint by taking on the persona of a village idiot. When asked by MP Scott Brison why the government didn't undertake its own analysis before granting the tax credit, he said:

“Because we didn’t think that we needed to do another analysis when we already had received one and we knew that this is a good news story for small businesses. The small business organizations have been asking us for a long time for this break”.

The colloquy, as reported by Aaron Wherry, continued:

Brison: So are you aware of the methodology they used?

Oliver: We are aware that they have expertise, they’ve spoken to their members and I have had an opportunity to speak to them and I’ve had an opportunity to speak to many small businesses in my riding in Toronto and elsewhere around the country. You know, you may not want to listen to small businesses. We do, and they are the biggest generators of employment in the country.

Brison: So you’re not aware of their methodology they used to come to that number?

Oliver: I am aware that they have spoken to their members and they do their regular type of analysis that you’d expect them to do. I mean, when you invest over half a billion dollars, there’s a macro-economic impact and we’re very comfortable there’ll be significant job creation.

NDP MP Nathan Cullen, part of the brigade attempting to derail Oliver's crusade, offered an observation that we can only hope deflected harmlessly off of the finance minister's protective shield. He said

that the minister’s comment shows the government is making major decisions based on ideology rather than evidence.

“They’re outsourcing policy to business lobby groups,” said Mr. Cullen. “Would they outsource policy to the Canadian Federation of Students? Would they outsource it to the national unions? They are now just allowing other people to write policy and spend employment insurance money.”

Fighting for one's faith can be a lonely endeavour, but if anyone can gird his loins and carry on, it is Uncle Joe.

Will The Harper Promise Of Tax Breaks Continue To Seduce Canadians?

Recently, Ontario Premier Kathleen Wynne called upon the Harper regime to commit $12 billion annually in infrastructure funding. This request takes on even greater urgency in light of the challenges we are and will be facing as we reap the consequences of climate change.

Fiance Minister Joe Oliver's response:

Wynne’s request is “divorced from fiscal reality.”

“We are not going to engage in a wild spending spree, which will create massive deficits and increase the debt. . . . We will also not jeopardize our top credit rating and we will not add to the intergenerational burden,” he said.

At the same time Herr Harper's henchman is preaching the virtues of fiscal discipline and ignoring the increasing costs of doing nothing in light of the above-stated peril, he is also pandering to our basest and most selfish instincts.

Yesterday, in a preview of the 2015 budget that will be designed to ensure the regime's re-election, 'Uncle Joe' offered this tease:

“I’m talking about reducing taxes for Canadian families and individuals”.

The words 'false economy' never escaped him ample lips.

In reference to a study done by the regime's ideological allies, The Fraser Institute, which just released a 'study' claiming we are grossly overtaxed and not getting good value in return, the finance minister had this to say:

Ottawa has reduced the federal tax burden and has urged other levels of government to reduce expenses and taxes.

It’s healthy for Canadians to understand the facts when it comes to taxes so the public can decide what’s fair and necessary.

So the Institute is just providing a public educational service, eh?

In that case, be sure to check out this piece, which points out some flaws in both the study's methodology and ideology.

After all, apparently Uncle Joe wants Canadians to be fully informed to decide 'what's fair and necessary.'

The final choice is up to us in 2015. Will we embrace the Harper ideology of selfishness and insularity and re-elect a corrupt and undemocratic government? Or will we rediscover our collectivist traditions and remember that our obligations are not only to ourselves but to each other?

TruthDig For A Different Kind Of Truth

I recently wrote a couple of blog posts on Warren Buffett and the need for higher taxation of the very wealthy, an idea that is gaining currency in a number of countries, including France and Spain, the latter actually recently imposing a new tax on the wealthy. While conventional news formats are reluctant to pursue the issue in any depth, alternative sites for news and opinions like our own rabble.ca and Truthdig, an American-based site, are not shying away from this contentious topic.

A Truthdig article entitled Why They Hate Warren Buffett examines the backlash from the right provoked by Buffett's plea for higher taxation of people like him, and is well worth perusal.

Fair Taxation

Democratic Senate hopeful Elizabeth Warren speaks on the topic of fair taxation:

Increased Taxation Of The Rich In Spain

Having written previously on the logic and desirability of increasing taxation on the wealthy, I was heartened to learn that Spain recently increased its rate for those with real estate assets (excluding their principal residences), stocks and bank holding of more than 700,000 Euros annually. It is expected to raise revenues of about €1.08 billion if applied uniformly.

While including real estate holdings in the calculation may strike some as excessive, the measure at least cuts through the deafening silence with which the suggestion to increase taxation levels is met by all three of Canada's major political parties, not to mention the scorn that was heaped on Warren Buffet by the American right-wing for advocating such measures.

The Timidity Of The Ontario NDP

I wrote earlier this month about the growing call from certain monied sectors for an increase in their personal taxation rates, arguing that they are not paying their fair share to support the country in which they grew and prospered. That plea, as noted earlier, is being egregiously ignored by all political parties, including Ontario's NDP, led by Andrea Horwath, a politician who is becoming increasing difficult to distinguish from the leaders of the other parties.

My observation, and I don't think it is a particularly startling or perceptive one, is that slowly and inevitably, the party, both at the federal and provincial levels, is becoming very 'mainstream' as the prospects for increasing their electoral success improve.

Take, for example, Ms. Horwath's position on corporate taxation. As reported last May in The Toronto Star, the NDP would raise corporate taxes by a mere 2%, to 14% from the current 12%. As well, as reported in today's Star, the party would cancel the entertainment tax breaks enjoyed by corporations, such as being able to write off some of the costs of a corporate box at the Air Canada Centre.

While I do not dispute that these would be useful measures that would hardly send corporations fleeing to other jurisdictions, they also strike me as extraordinarily timid, a kind of nipping around the edges of fiscal policy. I do realize there is an argument to be made for proceeding slowly in a compromised economy, but I worry that the stated policy direction suggests that should they ever regain power, the NDP would once again make the same kinds of mistakes that were made during the disastrous Bob Rae years, when the now interim federal Liberal Leader bent over backwards to placate business at the expense of party policy and principles.

Until I hear someone talk about raising the personal income tax rate on the ultra-wealthy, I shall remain dubious of the integrity of NDP principles.

Please sign this petition urging Prime Minister Harper to stop threatening Michaela Keyserlingk and to stop exporting asbestos.