Friends In High Places Are Good (For Some)

Having friends in high places is certainly something the wealthy must savour as they continue to hide money in offshore tax havens. Yes, the very same havens the Trudeau government promised to crack down on. And the very same tax havens that, as I recently posted, seem to inspire timidity in our Canada Revenue Agency.

A new report by the CBC/Fifth Estate suggests that timidity is deepening:

The Canada Revenue Agency has once again made a secret out-of-court settlement with wealthy KPMG clients caught using what the CRA itself had alleged was a "grossly negligent" offshore "sham" set up to avoid detection by tax authorities, CBC's The Fifth Estate and Radio-Canada's Enquête have learned.

This, despite the Liberal government's vow to crack down on high net-worth taxpayers who used the now-infamous Isle of Man scheme. The scheme orchestrated by accounting giant KPMG enabled clients to dodge tens of millions of dollars in taxes in Canada by making it look as if multimillionaires had given away their fortunes to anonymous overseas shell companies and get their investment income back as tax-free gifts.

Apparently, who you are and what you are worth entitles you to special privileges, including a totally sealed record of your settlement with the CRA:

... tax court documents obtained by CBC News/Radio-Canada show two members of the Cooper family in Victoria, as well as the estate of the late patriarch Peter Cooper, reached an out-of-court settlement on May 24 over their involvement in the scheme.

Details of the settlement and even minutes of the meetings discussing it are under wraps. A CBC News/Radio-Canada reporter who showed up to one such meeting this spring left after realizing it was closed to the public.

Quite understandably, many are outraged by this:

Toby Sanger, executive director of the advocacy group Canadians for Tax Fairness, says the CRA should never have agreed to settle the case.

"I think it's outrageous," he said. "We've had a lot of tough talk and promises from this minister [National Revenue Minister Diane Lebouthillier] about how they will crack down on tax evasion by the wealthy and corporations, but unfortunately we've seen no evidence of this so far."

The Trudeau government's previous tough talk on the so-called KPMG sham had come after a document leaked to The Fifth Estate/Enquête showed the CRA itself had offered a secret "no penalties" amnesty in May 2015 to many of the other KPMG clients involved in the scheme.

The CRA offered to have them simply pay the back taxes owed — but with the condition they not tell the public about the offer.

Apologists for the Trudeau government will insist that the CRA was acting independently of the government, but that clearly flies in the face of reality, given Trudeau's promises in 2017 to do a "better job of getting tax avoiders and tax frauders."

Like their attempts to influence the course of justice in the SNC-Lavalin affair, this latest report is yet one more arrow indicating where the sympathies and loyalties of our federal government really lie.

Too Good Not To Share

Rabid partisanship being what it is, Twitter user Mike Vlasic offers this perspective:

Reminds me of the old "Niagara Falls" sketch, where the words trigger violent outbursts. Similar to the reaction from LPC partisans when you dare criticize PMJT.https://t.co/MWwFFJk8et

— Mike Vlasic 🛶🎣 (@MikeMcPickles) May 28, 2019

UPDATED: You're A Mean One, Mr. Ford

In a move that will surely swell the tiny hearts beating within the breast of Ford Nation, the Ontario government is eliminating a benefit that helps children of the poor, especially those claiming refugee status:

The cut, buried in April’s provincial budget, will end the Transition Child Benefit which provides up to $230 per month, per child in families on welfare who are not receiving the Ontario and Canada child benefits, such as refugee claimants.

The move, scheduled to take effect Nov. 1, will affect an average of 16,000 children a month province-wide, according to the government.

Those who favour tighter refugee and welfare rules will likely be exuberant over the deprivations they cuts will wreak. Others, with their humanitarian instincts intact, are horrified:

“To me, this is the nastiest cut,” said Toronto Councillor Shelley Carroll, a member of the city’s economic and community development committee, responsible for the local welfare system.

It is part of an estimated $177 million in provincial budget cuts to the city that threaten child care subsidies, school nutrition programs and free dental care for low-income children, among others services.

In Toronto, the loss of the Transition Child Benefit will mostly hurt kids in families making refugee claims, said City Manager Chris Murray in a memo to councillors earlier this month.

One such victim will be Eritrean refugee claimant Samu Abdel, 37,

who has three young sons, including one with spina bifida, the benefit has been critical to her ability to support her children.

“I don’t know what I would do without it,” says the single mother who fled her war-torn homeland in 2017. “I have a disabled son. I can’t work. I need this money to buy food and diapers.”

But such concerns seem to matter not to those wielding ever-sharper hatchets as they seek to cut the deficit, insisting that they are actually improving the system:

“We are replacing parts of the social assistance system that provide complicated and unequal support to those in need, with simpler rate structures for everyone,” said Derek Rowland [spokesperson for the provincial ministry of children].

“The government believes that all Ontarians should have equal access to children’s benefits, regardless of whether they are or are not receiving social assistance.”

Increasingly, Ontarians are seeing through the facade that the Ford regime has tried to erect. The question that remains, however, is whether, this early in their mandate, anyone in the Ford government is paying attention.

UPDATE: Hmm, it appears someone in the Ford administration has been listening.

Piercing The Propaganda

It is indeed heartening to see so many young activists now regularly protesting the inertia that our political masters are mired in when it comes to climate change mitigation. If anyone has a right to feel outraged, it is the younger generation that will find life on our planet far less hospitable than the one their elders knew growing up.

Equally heartening however, is the growing realization of the economic consequences of the widespread costs being incurred in these still early-days of global warming:

...the Bank of Canada... has just announced that it will incorporate climate change and its effects on business and the economy into its ongoing assessments of financial stability, growth and inflation.

In its report on financial stability last week, the central bank has finally recognized that even though environmental concerns are a bit outside of its wheelhouse, the risks are too consequential to be ignored. Extreme weather hurts infrastructure and the daily functioning of the economy, but it can also affect the stability of banks, pension plans, insurance companies and other financial institutions.

More broadly, however, because the world is moving to a low-carbon economy, Canadian companies that don’t measure their exposure to carbon and figure out how to handle the shift could suffer deeply, the bank points out.

This, of course, begins to pierce the propaganda promulgated by many of the economic consequences of a rapid move to a low-carbon economy.

And speaking of the low-carbon economy, Don Pittis offers some interesting insights as he cites a report called Missing The Bigger Picture: Tracking the Energy Revolution 2019.

Not only is Canada’s clean energy sector growing faster than the rest of the country’s economy (4.8% versus 3.6% annually between 2010 and 2017), it’s also attracting tens of billions of dollars in investment every year.

And perhaps most importantly for the average Canadian, it’s a huge, and growing, employer. In 2017, clean energy accounted for 298,000 jobs in Canada—roughly equal to direct employment in the real estate sector.

The fact that the role clean energy is playing an increasingly important role in our economy is hidden from most Canadians, largely because it is

not even classified in most statistics as a sector at all.

As the executive director of Clean Energy Canada, Merran Smith says in her introduction to the report, "Put simply, it's made up of companies and jobs that help to reduce carbon pollution — whether by creating clean energy, helping move it, reducing energy consumption, or making low-carbon technologies."

... the concern of Smith and her group, and the reason for assembling today's report, is the blinkered view of many Canadians that the energy industry and the economy are somehow in conflict with green principles.

But nothing could be further from the truth:

Economic research has shown that making the world more energy efficient is exactly what successful businesses have done throughout history, because energy is a cost, and cutting costs is what thriving businesses do.

"The clean energy sector isn't just about fighting climate change — it's also about using Canadian innovation to create better and cheaper solutions for everyday life," said Smith.

And there is real economic heft to be found in that sector:

Studying the period from 2010 to 2017, not only did the sector outgrow the entire economy by more than one full percentage point, but jobs in that component of the economy increased by 2.2 per cent a year, compared to an annual increase of 1.4 per cent in jobs overall.

No doubt, the old canard about climate-change mitigation measures being inimical to economic imperatives will persist for some time. However, the louder young people scream, and the more economic data that becomes available to us, one hopes that blinkered and inaccurate mindset will weaken and ultimately disappear.

Historical Factors that Led to The Current Opioid Crisis - A Guest Post By Patrick Bailey*

The opioid crisis has captured the attention of policymakers and the public. It is becoming increasingly apparent that this is a multidimensional societal challenge that requires a new approach. Such an approach should include patient and community level intervention. Access to care for mental health conditions, private alcohol rehab and substance abuse treatment is also important if we are to curb overdose deaths.

The history and events that led to the opioid crisis are explored in this article.

History of Opioid Abuse

As early as 1980 Carter’s White House had identified prescription opioid medication to be responsible for “as many as seven out of ten drug-related injury or death”. Yet the issue of the opioid prescription medication crisis was not brought to the limelight until two decades later. More and more people were looking to join private alcohol rehab and addiction recovery centers or were struggling with health complications.

In the 80s, before policymakers and the public understood the full adverse effects of this medication, there were virtually no regulations to stop opioid prescriptions. Propoxyphene was one of the most prescribed drugs in the 80s.

Propoxyphene was initially considered to be a weak opioid that could be used as an analgesic. It was later pulled out of the market after it was discovered that it could cause irregular heartbeats. By 2011, it was banned in the US and Canada.

Despite the obvious dangers of opioid medication and the impact they have in the community, opioid-related deaths continue to rise. The CDC reports that opioid overdose deaths have increased fivefold since 1980.

Overdose deaths are caused by drug abuse and misuse of prescription medication. In recent years, the CDC report points out that overdose deaths caused by prescription medication outnumber those from illicit drugs. The factors behind overdose deaths from prescription medication include:

● Insurance and Pharmacy benefit Policies

● Lack of oversight in the prescription of opioids

● Problems with provider clinical practices

The impact of prescription medication dependency is significant and far-reaching. It has complicated chronic conditions further, leads to addiction and financial loss. The impact was slowly starting to become apparent. But many in the health industry felt that new policies shouldn’t be so restrictive that they prevent patients in pain from accessing care.

But what happened between the 90s when cases of opioid adverse effects were being highlighted and the present day when it has become an epidemic? A series of events paints a picture of medical practitioners who were unwittingly giving way to profiteering pharmaceuticals.

Profit over People

When Insurance companies started to withdraw cover for opioid medication, pharmaceutical companies came up with ways to go round it. This included extended-release formulas, transdermal patches, and pain modulating implants. Many non-opioid pain medications were being questioned for their potential cardiovascular risk. At this point, pharmaceutical companies would start pushing back opioid pain medication much more ruthlessly.

In 2016, seven employees of Insys Therapeutics, Inc, including its former CEO, were arrested for running a scheme to defraud medical practices and practitioners. The department of justice claims that the former executives conspired to push a fentanyl-based drug to health care providers.

The executives went ahead to develop a scheme that involved many conspiring practitioners. They would give kickbacks to professionals in the healthcare industry to push their fentanyl-based drugs to non-cancer patients. The report alleges that some practitioners were bribed to change the patient’s diagnosis.

Fentanyl is a powerful analgesic that can be used to help people cope with chronic pain. But it is 50 times more powerful than heroin. If not properly prescribed, it can lead to serious complications and often death. This drug alone handles "nearly half of all overdose deaths".

Disease of Despair

However, even as opioid pain prescriptions decreased by 13% between 2011 and 2016, overdose deaths continued to rise. This may be attributed to the entry of drugs such as fentanyl which are less bulky and easier to distribute.

However, some researchers feel that the focus on drug distribution and incarceration also contributes to overdose deaths. This single focus reduces response to prescription opioid overdose and complications. Understanding how addiction to opioid prescription medication starts is limited.

Another issue is access to treatment. Treatment requires an understanding of what addiction is and why it happens. Factors such as underlying mental conditions, physical health, lack of employment, are some of the factors that ought to be considered.

Access to mental health treatment, substance abuse, and private alcohol rehab is critical for addressing the issue conclusively. Patients require access to alternative pain medication that is effective. One of the nonopioid drugs that has been proposed is Buprenorphine.

Unfortunately, the drug can also cause dependency. It demands due to caution when prescribing to those with opioid addiction. Congress is yet to approve the drug for addiction to prescription medication.

Meanwhile, the opioid crisis continues to affect the poor disproportionately. Lack of access to professional care can increase the risk of opioid-related complications. The environment where many of the poor live, makes them more susceptible to mental health conditions.

The rate of death is the same in both urban and rural counties. But the report shows a clear difference in poor counties and counties with high rates of divorce and separation. Addiction is a social and psychological illness that needs more than tough laws to curb.

The opioid problem has grown exponentially over the last decade. Partly because of the lack of effective oversight on pharmaceutical companies, and partly because of an economy that puts profit over people. The main problem is that we have failed to acknowledge the multifaceted nature of the problem.

* Author Bio: Patrick Bailey is a professional writer mainly in the fields of mental health, addiction, and living in recovery. He attempts to stay on top of the latest news in the addiction and the mental health world and enjoys writing about these topics to break the stigma associated with them.

Patirck can be reached at the following address: baileypatrick780@gmail.com

The Kindest Cut Of All?

Given the butcher's blade Doug Ford and his trained seals are taking to crucial services and programs in Ontario, perhaps the following best reflects the widespread disenchantment people are expressing with the government they helped elect.

Our Timid Canadian Revenue Agency

Over a year ago I posted about the sad record of the CRA in pursuing offshore tax cheats as revealed by the Panama Papers. It seems that little has changed since then.

In a Policy Options article, Senator Percy Down asks, Why can’t the Canada Revenue Agency catch tax cheats?

Recently, on the third anniversary of the release of the Panama Papers, we learned that other countries have recovered more than $1.2 billion in fines and back taxes:

Australia has recouped $92 million.
-Spain is counting $164 million in its coffers.
-The United Kingdom has recovered $252 million.
-Even Iceland, with a population of roughly 350,000 people, was able to recover $25.5 million.

Of the 894 Canadians (individuals, corporations and trusts) revealed by the Panama Papers to have accounts, the Canada Revenue Agency hasn’t recovered a dollar.

While the CRA talks a good game, its results tell a different story:

The agency talks tough every time there is a public leak of information from some bank or law firm operating in a tax haven. Nevertheless, not one person has been charged with overseas tax evasion, much less convicted, fined or sentenced since the 2006 information leak we know the most about, from a bank in Liechtenstein, where 106 Canadian-held accounts were found to contain more than $100 million.

In fact, as reported by the Auditor General, the CRA “waived referrals for potential criminal investigation to gather information.” In other words, the agency promised not to charge the people involved in that tax scheme in exchange for them explaining to the CRA how it actually worked and agreeing to pay what they owed.

This strange acquiescence to tax evasion is contrasted by other jurisdictions that have worked hard to discourage such criminality:

Compare this to Australia, for example, where not only are back taxes and penalties paid, but individuals are charged with committing a crime and in many cases convicted, fined and jailed, and the country uses those convictions to warn citizens that it is serious about tax evasion.

“As a result of Project Wickenby’s focus on preventing the abusive use of secrecy havens,” a 2012 audit of an Aussie anti-tax evasion task force noted, “Australia is presently less attractive for international tax fraud and evasion than it otherwise would have been. After a slow start, the project has achieved substantial results from its activities, which contribute to protecting Australia’s revenue base.”

And make no mistake. We are all paying for the Canada Revenue Agency's laxity:

Because Canada has not recovered any money, three things have happened. One, we don’t have that money to fund our priorities without incurring a deficit; two, the rest of us have to make up the shortfall by paying more taxes; and three, Canadians are wondering why we have a two-tier justice system for tax evasion. Try to cheat on your domestic taxes, and the CRA will likely find you, charge you, convict you and force your repayment. Hide your money overseas, and you likely will never be charged or convicted. The odds are good you will get away with it, and your federal government allows this double standard to continue.

Like the Harper government before it, the Trudeau administration seems to be using the CRA for its own purposes. Is it too much of a leap to conclude that one of those purposes is to protect its friends in high places?