UPDATED:A Love Affair That Hurts All Of Us

 

If you follow such things (i.e., the news) you will know that our current federal government, echoing the passions of previous ones, has an unmitigated and uninterrupted crush on the corporate sector. The only problem with that protracted affair is that the rest of us suffer the consequences.

Examples abound, including the government's failure to achieve any results from the revelations found in both the Panama Papers and the Paradise Papers. But today's post will examine only two recent and egregious demonstrations of our leaders' fealty to their business overlords.

The first is the the holiday disaster widely reported at airports. While undoubtedly much of the chaos is attributable to the weather vagaries imposed by climate change, the corporate contempt for passengers is also there for all to see. And it cannot be more obvious than in the debacle that Sunwing Airlines finds itself in the midst of.

The Canadian government is criticising leisure specialist Sunwing Vacations after an operational meltdown left hundreds of passengers stuck when winter weather disrupted the carrier’s operations earlier this week.

The Toronto-based company, like its US peer Southwest Airlines, has been scrambling to sort through the mess, leaving customers frustrated and angry. Canadian media reports that some of the carrier’s passengers have been waiting to be repatriated from Latin American holiday destinations including Cancun for up to five days.

Hmm, about that government 'criticism'. While I have seen U.S Transportation Secretary Pete Buttigieg at least go on national television to discuss Southwest Airlines' thousands of cancellations, it was only three days ago that our Minister of Transport, Omar Alghabra (or his office) managed these anemic tweets:

Canadians are patient when it comes to weather disruptions but they rightly expect their airlines to keep them informed and to manage these disruptions smoothly. I am very concerned with the current situation with Sunwing Airlines.

 This ongoing situation is unacceptable. Canadians must receive the information they need to return home safely. We expect all airlines to keep their passengers informed when it comes to delivering a service that they were paid to do.

Passengers have rights under the Air Passenger Protection Regulations to ensure robust passenger protection in situations like these, and our government will continue to ensure these rights are protected.

Surely, that will put the fear of God into Sunwing, eh? If you click on the above link, you will see the contempt with which this toothless tweet was met by those who responded to it. 

My second example is the pending merger between Rogers and Shaw, a merger that will obviously result in less competition and higher prices for telecommunication services. At least our Competition Bureau tried to block that merger as against the best interests of Canadians, but that veto was overturned by the Competition Tribunal. As well, it has met the approval of Industry Minister Francois-Phillipe Champagne.

Those opposing it are groups seeking to represent the interests of ordinary Canadians.

Commissioner of Competition, Matthew Boswell, head of the Competition Bureau, said he was “very disappointed” in the decision and is “carefully considering” next steps.

That could include an appeal of the Tribunal’s decision to the Federal Court of Appeal.

 Critics say the Tribunal’s decision was hastily made and follows a troubling pattern in Canada’s failure to foster healthy competition in one the country’s most powerful sectors.

 “Though the decision is disappointing, it is ultimately a product of Canada’s permissive and outdated merger laws,” said Keldon Bester, co-founder of The Canadian Anti-Monopoly Project. “It is … disheartening to see the Tribunal rush such a critical decision for Canadians at the request of the merging parties.”

Matt Hatfield, campaigns director of OpenMedia, said the decision was “the last nail in the coffin of telecom affordability in a dismal 2022.”

The buyout results in higher prices and fewer choices, in an already tight telecom market, he added.

Official 'cover' for the merger is the provisional sale made to Quebecor of Freedom Mobile, an arm of the Shaw empire. It comes with the 'expectation' that it will provide sufficient competition to keep Rogers-Shaw on its toes. We'll soon see how that one works out, but the auguries are not good, especially given that Globealive, a telecommunication entity with many companies, had wanted to buy Freedom Mobile for $3.75 billion, substantially more than the $2.85 billion Quebecor has paid for it. Speculation is that that deal wasn't accepted because it would have meant real competition for the Rogers-Shaw behemoth.

So there you have it. As usual, Canadians are being sacrificed on the altar of big business, the only true god worshipped by our government. One can only hope that Canadians ruefully remember their place in the pews the next time they go to the polls.

UPDATE: Oh, perhaps we can all rest easy now that Industry Minister Francois-Phillipe Champagne has articulated his expectations for Quebecor for its purchase of Freedom Mobile to be allowed:

Videotron would have to agree to keep Freedom’s wireless licences for at least 10 years and the minister would “expect to see’’ wireless prices in Ontario and Western Canada lowered in line with the company’s Quebec offerings.

“What remains before me is the separate request to transfer spectrum licences from Shaw to Quebecor. Promoting competition and affordability in the telecom sector is one of my top priorities. That position has not changed,” Champagne said.

However, there is no word as to why he has not investigated the refusal to sell Freedom Mobile to  Globealive, despite the company offering almost $1 billion more than did Quebecor. (See above discussion.)

But Champagne's statement makes for nice window dressing, doesn't it?

An Ideological And Horticultural Taint

Although I am not a user of medical cannabis, the current scandal (and it can only be termed a scandal) regarding dangerous and forbidden pesticide use by companies with the Health Canada seal of approval is instructive.

First, a recap of the situation is in order:

After a string of recent recalls by Mettrum Ltd., OrganiGram Inc. and Aurora Cannabis Inc. because of the presence of myclobutanil – a banned pesticide that produces hydrogen cyanide when heated – a number of patients told The Globe and Mail they don’t see how Health Canada can assure them the product can be trusted. Revelations that the government isn’t testing regularly to prove all companies aren’t using harmful chemicals have left consumers concerned for their health.

The real villain of the piece is our current 'new and improved' government, which seems quite content to follow the same practices set out by the former, much-despised neoliberal Harper government.

In a background briefing with The Globe and Mail, a senior Health Canada official acknowledged that even though the government prohibits the use of potentially harmful chemicals such as myclobutanil, – which is known to emit hydrogen cyanide when heated –the department has not been testing cannabis growers to ensure the 38 federally licensed companies were, in fact, not using it.

Instead, the regulator has been leaving it up to the growers to police themselves on the use of potentially harmful chemicals.[emhpasis added]

The rather naive justification for this betrayal of the people using pot for therapeutic reasons is unconvincing:

... we have not required licensed producers [LPs] to test for any unauthorized pesticides, nor have we been testing all LPs, and it is because we expect their companies to be pro-actively watching and taking the appropriate measures to ensure non-authorized products aren’t used.

Perhaps the most damning aspect of all of this is that when a recall of tainted product took place in December, Health Canada refused to reveal the reason: the discovery of myclobutanil.

We will soon be a year-and-a-half into our 'new' government's tenure, more than sufficient time to set new directions for all government bodies, but just as Revenue Canada has shown no particular appetite for chasing down offshore tax evaders, despite the revelations of The Panama Papers, Health Canada and undoubtedly many federal regulators are still hewing to the much-vaunted neoliberal tenet of belief: industry self-regulation.

A damning indictment, to be sure, both of the medical marijuana industry and the Trudeau government, which clearly has not yet met a free-market policy it doesn't like.

Enemies Of The People

I hardly think that is too harsh a description of both those who park their money offshore to avoid taxes and those who facilitate such evasions. Indeed, an open letter signed by some of the world's leading economists makes the cost of such selfish and criminal behaviour eminently clear:

As the Panama Papers and other recent exposés have revealed, the secrecy provided by tax havens fuels corruption and undermines countries’ ability to collect their fair share of taxes. While all countries are hit by tax dodging, poor countries are proportionately the biggest losers, missing out on at least $170bn of taxes annually as a result.

... we are agreed that territories allowing assets to be hidden in shell companies or which encourage profits to be booked by companies that do no business there, are distorting the working of the global economy. By hiding illicit activities and allowing rich individuals and multinational corporations to operate by different rules, they also threaten the rule of law that is a vital ingredient for economic success.

To lift the veil of secrecy surrounding tax havens we need new global agreements on issues such as public country by country reporting, including for tax havens. Governments must also put their own houses in order by ensuring that all the territories, for which they are responsible, make publicly available information about the real “beneficial” owners of company and trusts.

The impact of such behaviour is felt everywhere, but never more than in developing countries:

... while estimates put the cost to Canadian tax coffers at between $6- and $7.8-billion per year, the effects on developing countries is far greater, said Haroon Akram-Lodhi an economist and professor of international development at Trent University.

“The amount of capital flight from sub-Saharan Africa is absolutely huge and it’s all going into these tax havens,” said Akram-Lodhi, one of the signatories of the letter. “This is reducing the ability to fight poverty on a global scale.”

Will governments merely go through the motions of doing something, and then go back to the old ways once the fierce glare of the public subsides? I don't know, but I am somewhat dubious of any substantive changes, since the rich and powerful are, well, rich and powerful.

Now that a searchable database is online, this interview with The Star's Marco Chown Oved sheds some light on what can be found there:



One hopes against hope that real change is in the offing.

Wash And Dry?

As I have written in the past on this blog, I have long suspected that Canada is soft on white-collar crime, including money laundering. The fact that the Panama Papers has yielded almost no recovery by the CRA of hidden tax money speaks volumes.

It would appear that laissez-faire attitude is now working its way through other federal bodies. Marco Chown Oved writes:

Despite multiple recent reports that identified Toronto’s vulnerability to money laundering, the RCMP has decided to disband its Ontario financial crimes unit, the Star has learned.

Announced internally on December 10 in a series of meetings held in detachments across the province, the decision will see 129 officers and eight civilian staff re-assigned to other units, including organized crime, anti-terrorism and drugs, according to an internal email obtained by the Star.

Breaking up a stand-alone unit devoted to investigating complex and difficult cases has financial crime experts worrying that fraud and money laundering activity will increase.

The many people currently working in the division will be redeployed to others dealing with terrorism, drugs and organized crime - a very bad idea:

“It just won’t work,” said Garry Clement, former director of the RCMP proceeds of crime unit. “The RCMP, in my view, has sort of lost sight of the fact that taking on financial crime requires a very high degree of expertise.”

A similar reorganization happened in B.C. several years ago, said Clement, where there has since been an explosion of money laundering in casinos, real estate and luxury cars.

“It amazes me that they tried this approach of dissolving the (financial crime) units and putting them together with other units and we know the results,” he said.

Says former deputy commissioner of the RCMP, Peter German,

“Eliminating economic crime as a national priority for the RCMP is a mistake. It was recognized years ago that protection of our economy is a critical issue for the national police. Furthermore, following the money trail is accepted around the world as likely the most effective way to attack organized crime where it hurts most,” German said.

It is difficult to draw any positive inferences from this egregiously bone-headed move, a reminder once more that when one scratches beneath the surface, all sorts of unpleasant implications are exposed.

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

Just Who Is Protecting Who?

If you have never seen it, I highly recommend the Netflix documentary series Dirty Money. Of particular interest is the one detailing the massive fraud perpetrated by Volkswagen, in which the auto giant employed a diesel 'defeat device' allowing their cars to bypass environmental controls and thereby emit massive amounts of greenhouse gases into the atmosphere while claiming environmental rectitude. It was nothing less than a crime against humanity.

And they have paid a heavy price for their criminal fraud, except in Canada:

In the three years since the Volkswagen emissions-cheating scandal was uncovered, governments in the U.S., Germany and elsewhere have fined the company billions of dollars and sent some of its top executives to jail for breaking environmental laws — but not in Canada.

“There has been nothing done,” said David Boyd, the United Nations’ newly appointed human rights and environment watchdog.

Given Canada's less-than-aggressive pursuit of offshore tax evaders who were exposed in the Panama Papers, this does not surprise me, but I am nonetheless appalled by my government's timidity in going after major criminals.

While the company said in a statement it settled a $2.1-billion class action lawsuit in 2017 with customers who purchased one of roughly 125,000 affected diesel vehicles sold in Canada — as it did elsewhere in the world — Volkswagen hasn’t faced any charges under the Canadian Environmental Protection Act so far.

There is concern among some observers that the federal government may not act, continuing what Boyd said is a longtime trend of leniency.

“Three years have gone by and Canada has a track record of not enforcing environmental laws,” he said.

To put government timidity into perspective, consider the following:

In 2004, Petro-Canada was fined $290,000 for the spill that saw 1,000 barrels of oil flow into the Atlantic Ocean from the Terra Nova offshore production vessel. By comparison, Brazil’s petroleum regulator fined Chevron $17.3 million (U.S.) for a 3,600-barrel oil spill in 2011, and the company also agreed to pay $150 million to settle civil lawsuits related to the case, according to Reuters.

Or how about this?

Boyd said Canada levied $2.47 million (Canadian) in fines for environmental infractions under the Canadian Environmental Protection Act between 1988 and 2010 — less than the $3.65 million the Toronto Public Library collected in overdue book fines in 2012.

In contrast, the U.S. — where Boyd said enforcement of environmental laws has been “much more aggressive” — the Environment Protection Agency levied $204 million (U.S.) in civil fines and won court cases securing another $44 million in criminal fines from environmental lawbreakers in 2012 alone.

While Canada continues to investigate Volkswagen, the company has paid very substantial penalties in other jurisdictions.

Volkswagen paid the equivalent of $1.5 billion (Canadian) in fines in Germany and $12 billion in the U.S., according to an analysis by Environmental Defence, which is launching a public campaign this month to pressure Ottawa to take action against the company.

In the U.S. case, Volkswagen also agreed not to contradict anything outlined in the plea agreement or statement of facts in other jurisdictions.

This sorry dilatory approach to criminal enforcement should offend every Canadian, given that it conveys a wholly inappropriate message of weakness to the corporate criminals of the world, one best summed up by David Boyd:

“It’s just indicative of how absolutely scandalous Canada’s failure to enforce environmental laws has been over the past 25 years”.

Clearly, this is not the kind of business Canada should be open for.

Democracy Is Fine, Until It Isn't

 

I don't post on a daily basis anymore, partly because I have other things keeping me busy and partly because I do wonder if anything good can come from a frequent barrage of my deep-seated cynicism. I see little to inspire hope in the world, so why simply drive home the point again and again?

There are times, however, when what is being reported calls for denunciation, and my anger today emanates from the hypocrisy with which democracy is presented to us. On the one hand we are told that it is sacred, but on the other hand, when it results in things some don't like, they find their own ways of undermining and denouncing it, but in terms that are not so obvious.

Recent episodes come readily to mind.

In an effort to promote more moderate drinking, Ireland has passed legislation that will mandate cancer warnings be placed on all alcohol products sold in the Emerald Isle. While I have doubts about the efficacy of such labelling, I don't dispute the democratic right of a state to make and enforce health policy.

Not everyone agrees.

The United States and other countries have expressed concerns over Ireland’s plans for labels on alcoholic products that would warn of a link to cancer at a World Trade Organisation meeting on Wednesday, officials say.

The item was on the agenda of the Technical Barriers to Trade Committee of the WTO when it met in Geneva, a forum for the organisation’s 164 members to discuss and mediate potential disputes over regulations.

The US, Mexico, and the Dominican Republic raised concerns that Ireland’s new alcohol labelling requirements signed into law in May could present a barrier to trade at the meeting, according to a Geneva-based trade official.

Additional countries also spoke up in the meeting about the issue, some supporting the complaints made by others, including Japan, Colombia, Canada, Chile, Argentina, New Zealand, Cuba, Australia and Guatemala.

Now, on the surface this looks like a trade irritant. But if any thinking person peeks behinde the curtain, they may come to the conclusion that it is the affected corporations that are really calling the shots, and the state is essentially their 'beard'. In other words, the nation-state, as it often has, is doing the bidding of its corporate masters. This will not be a revelation to many, but that it is a fact should outrage all of us.

The Irish situation is reminiscent of something that occurred several years ago pertaining to the WHO's efforts to reduce global use of tobacco. The tobacco company Philip Morris lobbied intensively and extensively to weaken measures aimed at reducing the consumption of their very lucrative product. You can read all about their sordid tactics in the link, but this excerpt might provide a little flavour of what they were up to:

a goal of Philip Morris is to increase the number of delegates at the treaty conventions who are not from health ministries or involved in public health. That’s happening: A Reuters analysis of delegates to the FCTC’s biennial conference shows a rise since the first convention in 2006 in the number of officials from ministries like trade, finance and agriculture for whom tobacco revenues can be a higher priority than health concerns.

A WHO treaty to discourage smoking was successfully implemented, but, at the time of the report,  while the U.S, signed the treaty, it did not ratify it. So much for the freedom to enact democratic and life-saving policies, eh?

We can look closer to home for further illustrations of whose interests are served in our democracy. The Rogers-Shaw merger, despite the protracted political theatre and government hand-wringing over competition in the wireless industry, was, as I knew it would be, endorsed. Who benefits? I think you know the answer. Who suffers? The citizens, of course.

Then there is the federal government's apparent inability to recover billions of dollars in evaded taxes. Despite the revelations of both the Paradise and Panama Papers, the CRA seems strangely reluctant to go after the titans who hold those accounts, Much easier it is to go after small businesses, as evidenced by the fishing expedition the tax agency is going on for Shopify records.

Even closer to home is the absolute contempt Doug Ford and John Tory evinced in the mayoral race which Olivia Chow just won. Both men had vowed to stay out of the election, but neither did, the most egregious violation by Ford, who pronounced absolute catastrophe for the City of Toronto should a "leftie" like Chow be elected. But what else can one expect from someone whose loins are set atingle whenever a privatization plan is mentioned?

"The people are never wrong," goes the cry about democracy. True, unless they want something the people behind the curtain don't. 

So much for the voice of the people.

We Are All Capuchin Monkeys

Or at least I suspect we will feel like the one on the left in the following video, once the Panama papers releases its database of tax cheats and avoiders this afternoon.

Some Habits Die Hard

In some ways, it is hard to believe that the old Liberal propensity for corrupt coziness with corporate chums has reasserted itself so quickly, barely three years into Mr. Trudeau's tenure. In other ways, it is not hard to believe at all. After all, old habits die hard.

Th latest allegation is that Trudeau tried to influence former justice minister Jody Wilson-Raybould to help SNC-Lavalin avoid a criminal prosecution for bribery of Libyan officials in order to secure business contracts. It is an allegation the Prime Minister stoutly denies, but the fact is that Wilson-Raybould was recently demoted to Veterans Affairs.

Cause and effect? The smell of a smoking gun is in the air.

First, there is what has been described as Trudeau's legalistic denial in response to reporters' and House of Commons' questions:

“The allegations in the Globe story this morning are false,” Trudeau told reporters Thursday in Vaughan. “Neither the current nor the previous attorney-general was directed by me or anyone in my office to take a decision in this matter.”

The new justice minister, David Lametti, repeated Trudeau's words in answering the charge of interference in the House.

So, are we simply jumping to judgement, based on little or no evidence? The Toronto Star doesn't think so.

And what communications, if any, did members of Trudeau’s office have with Wilson-Raybould and her office on this issue? These are questions that can’t simply be waved away with a carefully worded blanket denial. The Globe reported that the company lobbied federal officials more than 50 times since 2017 on “justice” and “law enforcement” issues, including 14 times with Trudeau’s closest advisers in the PMO.

What exactly did they discuss? Did it include the possibility of SNC-Lavalin benefitting from a so-called remediation agreement that would allow the company to avoid a criminal trial on serious fraud and corruption charges (and therefore remain eligible for lucrative government contracts)?

And what communications, if any, did members of Trudeau’s office have with Wilson-Raybould and her office on this issue?

These are questions that can’t simply be waved away with a carefully worded blanket denial.

Susan Delacourt finds Wilson-Raybould's silence on the matter quite telling:

... she didn’t have a thing to say in the wake of the Globe and Mail’s explosive story of how the former justice minister reportedly stood in the way of a deal to let SNC-Lavalin detour around prosecutions that could have blocked it from receiving government contracts for years to come.

“That is between me and the government as the government’s previous lawyer,” Wilson-Raybould was quoted as saying in the Globe’s scoop, as well as a cryptic, “I don’t have a comment on that,” in reply to more pointed questions about how she handled the SNC-Lavalin case.

Pro tip: “No comment” only works as a clever misdirection in fictionalized political journalism. In real life, it is often regarded as confirmation.

Did she speak truth to power?

Delacourt attended a Robbie Burns dinner last week in which Liberal MP Celina Caesar-Chavannes took jabs at her own government:

One of those jabs was aimed squarely at the ouster of Wilson-Raybould from the justice job, and a joke about how an Indigenous woman lost her post for doing it well and unsettling the “white man.”

None of which 'proves' these allegations. However, it is worth noting that SNC-Lavalin, a Quebec company, has had a long relationship with the Liberal Party of Canada, even when it was out of power:

SNC-Lavalin, many were reminding us on Thursday, was the same firm that was detouring around election laws for much of that decade to put roughly $110,000 in the party’s pocket in those lean years.

And so, an old pattern re-emerges. Coupled with Trudeau's stout defence and dismissal of allegations regarding his good friend and fundraiser Stephen Bronfman over what was revealed about offshore accounts in the Panama Papers, as well as the CRA foot-dragging in going after the big corporate cheats who operate such accounts, one can justifiably wonder whose interests the Prime Minister really is protecting.

This may rankle those who believe a Liberal government should never be criticized, given the poor alternatives, but to take such a position is to be willfully and woefully ignorant.

Lord knows we have enough of that already today.

If This Doesn't Enrage You

... check for a pulse.



Most people, I think, understand that proper taxation is essential to a viable society. All they ask is that the burden be shared equitably.

However, the CRA does not appear to share that philosophy of fairness, if the following is any indication:

Sometime in the first six months of 2018, the agency wrote off more than $133 million in taxes owed by one taxpayer. It's not clear whether the recipient of the writeoff was a person or a corporation.

The amount was for unspecified excise taxes or excise duties; the CRA has offered no further details.

The massive writeoff is cited in a Sept. 14, 2018 internal CRA memo to explain a big jump in the total tax dollars declared uncollectible, compared with the total for the same period a year previous.

"The above total amount submitted for writeoff represents an increase of $209M in comparison to the first submission of the 2017-2018 fiscal year," says the memo, obtained by CBC News under the Access to Information Act.

"The increase is attributable to a few large writeoffs, including one for $133M."

The federal government applies excise taxes on fuel-inefficient vehicles, automobile air conditioners and some petroleum products.

Despite the fact that this writeoff is tantamount to a subsidy the rest of us must bear, the CRA will not identify the offending entity, citing confidentiality provisions under the law. Apparently, however, this is not an isolated incident.

The Canada Revenue Agency in 2017-18 wrote off $2.7 billion in taxes owed. That's the largest single-year sum written off by the CRA since the $2.8 billion it abandoned in both 2014-15 and 2013-14.

The agency says that writing off a tax debt does not relieve a taxpayer of the obligation to pay — but it does mean no legal action will be taken unless the taxpayer's situation improves.

Only the very naive would believe that the CRA operates independently of government direction. One has only to recall how Stephen Harper sicced the agency on non-profits whose activities challenged his policies.

Now, all of Justin Trudeau's stout defenders need to start asking some hard questions about their man. His sympathies clearly lie with the corporate agenda, and he has a habit of going to extraordinary measures, both covertly and overtly, to meet his masters' needs. One need only look to the SNC-Lavalin affair to appreciate that sad fact.

For further evidence, consider that since the release of the Panama Papers, $1.2 billion in fines and unpaid taxes have been collected worldwide, while the CRA has revealed it should recoup more than $11 million in federal taxes and fines from 116 audits. In other words, a mere pittance compared to countries like the United Kingdom (more than $252 million), France ($136 million), and Australia (more than $92 million). Even tiny Belgium puts Canada to shame (over $18 million).

The critical thinker must ask why Canada lags so egregiously behind. Some of those thinkers may very well see a pattern of our government running interference for some very powerful interests, as Trudeau apparently did in accepting the word of Edgar Bronfman, a Liberal fundraiser, when the latter stated he never funded nor used offshore trusts. This, despite the fact that an investigation linked him to a $60-million US offshore trust in the Cayman Islands that may have cost Canadians millions in unpaid taxes.



I could go on, but I trust I have provided enough food for thought here.

The play Hamlet states that something is rotten in the state of Denmark. It would seem that Scandinavian country now has ample company in Canada.

Panama Papers Aftermath

While the revelations thus far about offshore holdings for the purpose of tax avoidance or evasion have provided us with a glimpse into the lives of those well beyond our pay grade, whether or not they have any lasting effect depends largely, not on the reactions of you and me, but rather those of the world's governments. And while public outrage may be high right now, whether those governments will simply ride out that outrage with sanctimonious promises to "go after the tax cheats" and do little, or enact substantive measures to curb this most foul and unpatriotic practice, remains to be seen.

Canada seems to be promising action, with National Revenue Minister Diane Lebouthillier promising substantial resources to go after those who put their own extreme personal wealth above the common good:

With an extra $444 million promised in the March budget, the CRA plans to hire additional staff to target what it dubs “high-risk” taxpayers and corporations. In return, the agency expects to collect an additional $2.6 billion in tax revenues over the next five years.

It also plans to boost its information technology capabilities to better sort the overseas financial transactions to detect tax fraud. The agency already tracks all financial transactions worth more than $10,000 — about a million a month.

Now it plans to focus its attention on all transactions involving individual jurisdictions known to be tax shelters — starting with the Isle of Man, off the west coast of England. Three other jurisdictions will also be targeted this year but agency officials refused to say which ones.

While all of this appears to be a good start, a couple of things puzzle me. It is estimated that between $6 and 7.8 billion is lost to our treasury annually through undeclared offshore holding. Yet, our government is promising only that the initiatives announced will collect an additional $2.6 billion in tax revenues over the next five years. Huh?

Secondly, our government has announced which offshore haven it will be examining first, the Isle of Man:

The first is the Isle of Man, which past transactions involving some KPMG clients have already been flagged by the agency. Quebec Liberal MP François-Philippe Champagne said $860 million in funds were transferred there in the last year along. Sixty audits already underway in relation to investments held in the Isle of Man. The CRA intends to contact another 800 taxpayers and corporations to obtain more information about their holdings.

Now, I know nothing about the arcane world of tax evasion and avoidance, but is it possible that by signaling its intent, the government is also giving the fiscal malefactors an opportunity to move their lucre to other havens not currently under the CRA's scrutiny?

I think these are legitimate questions to ask, given the fact that the CRA has previously treated tax scofflaws with great consideration. A Star editorial provides reasons we should be a bit cynical:

...while agencies such as the CRA and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) are happy to name the small fish they catch breaking the laws and regulations, that hasn’t always been the case with bigger fish.

Just last week FINTRAC, which tracks money laundering and terrorist financing among other things, announced it had levied a stiff $1.1-million penalty on a Canadian bank for failing to report a suspicious transaction and various money transfers. But it declined to name the institution involved. Meanwhile it is busy naming players who have been slapped with fines of $15,000 or less.

And CRA has drawn criticism for quietly offering an amnesty deal to unnamed multi-millionaire clients of the KPMG accounting firm who were allegedly involved in tax avoidance on the Isle of Man. The Canadian Broadcasting Corp. reported that the group was required by CRA only to pay back the taxes they owed, plus interest. Yet the CRA routinely prosecutes and names people who fail to file tax returns or otherwise run afoul of the law.

For more details about how the CRA has one approach for most of us and another for the monied class, click here; you may also want to watch the following video:



To close, I'll leave you with this excerpt from the Star editorial that likely sums up how so many of us feel:

If the government hopes to “give Canadians greater confidence that the tax system is fair to everyone,” its agencies should be prepared to publicly name offenders. Cutting deals to spare Ottawa the trouble of prosecuting, or to preserve the “good name” of financial institutions and their wealthy clients, isn’t going to reassure anyone other than the scofflaws themselves.

Ottawa shouldn’t be in the business of shielding those who have gone to extraordinary lengths to insulate themselves and their assets from public scrutiny.