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

In Praise Of Critical Thinking

Here are five resources that can aid us in what really is a life-long journey:

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.

A Change Of Pace

With all of the tawdry tales of corruption, tax avoidance and tax evasion going on right now thanks to the Paradise Papers, I feel like lightening the mood a bit. I hope you enjoy these, especially if you have ever been fortunate enough to share companionship with a dog:

Behind The Curtain

Ah, Star letter writers rarely disappoint. Truth, rather than political spin, always improves my mood.

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

From Panama to Paradise, we have a tiny glimpse into the realities dictating our lives: aristocrats and power brokers taking aim at record profits while burying the booty in faraway jurisdictions. I remember voting for Prime Minister Justin Trudeau, drinking his Kool-Aid about helping us commoners. Meantime, Trudeau’s friends in high places helped the multi-generational political star with the winning script.

The truth matters not in politics, at least when it comes to speeches. We’re fed lines about a political spectrum, then we are asked to pick a team. The problem is that the rhetoric is irrelevant, it exists only to grease a discourse designed to secure votes. Once power is secured, anything is possible for the people that backed the winners. I’m now of the opinion our prime minister was born into a scheme, his life part of a plan to milk the system.

Mike Johnston, Peterborough, Ont.

The revelations of the Paradise Papers strike deep into the machinations of those corporations and individuals seeking to avoid taxation in Canada. It is estimated that billions per year are lost to the Canadian economy through these tax dodges. The Canadian Revenue Agency (CRA) has to close the loopholes that allow this drain of wealth to happen.

There are so many areas of the Canadian social and economic infrastructure that would benefit from the end of these tax dodges. Now is the time for federal and provincial governments to close the loopholes and bring back Canadian money to Canada.

Don Kossick, Saskatoon, Sask.

First, we had the Panama Papers. Now the Paradise Papers. What we need is the Purgatory Papers: a public list of tax monies recovered and fines levied from persons nefariously using offshore trusts for tax evasion. Otherwise Prime Minister Justin Trudeau’s promise of tax fairness is simply hollow electioneering.

Peter Pinch, Toronto

Paradise Lost

“We don't pay taxes. Only the little people pay taxes.”
-Leona Helmsley

"It is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God.”
- Mark 10:25



This morning's Star gives comprehensive and very comprehensible coverage of the latest peak behind the tax curtain controlled by the ultra wealthy, and it is not a pretty picture, unless you think that greed and tax evasion make for a pleasing tableau.

Distilled to its essence, if I understand the situation correctly, the Bronfman family, through trusted consigliere Leon Kolber, established an offshore trust in the Cayman Islands in Kolber's name. All monies sent were deemed to be 'loans' by the Bronfmans, thereby allowing them to invest in Israeli interests tax free. Kolber's son Charles, now a citizen of Israel, handled things from that end and was rewarded lavishly for those efforts through trust disbursements.

Some will insist, as do the Bronfman lawyers, that there was nothing illegal about this but merely an astute use of extant tax loopholes. However, that explanation doesn't wash because the decisions about the trust (i.e., investment decisions) were made in Canada, not the Caymans, and thus should have been taxed as a Canadian trust.

Why should any of this matter to us? Well, the obvious reason is that our federal coffers were denied much-needed tax revenue, but unfortunately the implications of this scheme, no doubt practised by many of Canada's elite, go well beyond lost tax revenue. What the Paradise Papers essentially show is that the days of the Family Compact are far from over, and that the real levers of power are still being exercised behind closed doors.

To get a sense of that power, one has to go back to the nineties, when Edgar Bronfman was allowed to take $2 billion out of Canada tax free:

...a controversial tax ruling by Revenue Canada in 1991 ... allowed the Bronfmans to move more than $2 billion worth of Seagram Co. stock, held in two family trusts, to the United States without paying capital gains tax. The decision allowed the family to avoid as much as $700 million in taxes.

If you go to the 39-minute mark on last night's National, the disturbing mechanics behind this scandalous ruling are revealed, as Revenue Canada's efforts to block the deal gave way to pressure from the Bronfmans, who threatened to "go over their heads." The stench of political interference and corruption by the Mulroney government of the day is hard to ignore:



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.

I began this post with two quotes. The one by Leona Helmsley encapsulates something far too common amongst the monied: an abject contempt for the larger society within which they prosper, and a complete absence of any sense of obligation toward that society. They really believe that they are our betters.

The second quote, from The Bible, is reflective of the distance that great wealth can create from "the kingdom of God," that kingdom, in my interpretation, being a state of spiritual attunement with our fellow human beings. If we are not aligned with other people and have a sense of shared humanity, we cannot hope to have access to transcendent reality, whatever it ultimately is.

The ultra rich may have great wealth, but in other ways they are deeply and fatally impoverished.