The Paradise Papers

The prospect of real tax reform in Canada just got a lot dimmer. Today's release of the Paradise Papers suggests why.

CBC News is reporting this about Justin Trudeau's chief fundraiser, Stephen Bronfman:

In the early summer of 2015, Justin Trudeau was the star attraction at a private fundraiser in Montreal hosted by philanthropist and financier Stephen Bronfman.

Bronfman, an heir to the Seagram family fortune and a close Trudeau family friend, was revenue chair of the Liberal Party. That day, according to news reports, the two men raised $250,000 in under two hours.

Within weeks, the Liberals would launch their federal election campaign, sweeping to power on a "Real Change" platform that focused on the middle class and a promise to tax the rich.

"Our government has long known — indeed, we got elected — on a promise to make sure that people were paying their fair share of taxes," Trudeau said shortly after his election victory. "Tax avoidance, tax evasion is something we take very seriously."

But an investigation by the CBC, Radio-Canada and the Toronto Star has found that Bronfman and his Montreal-based investment company, Claridge Inc., were key players linked to a $60-million US offshore trust in the Cayman Islands that may have cost Canadians millions in unpaid taxes.

It's a 24-year paper trail of confidential memos and private records involving two prominent families with Liberal Party ties that experts say appear to show exploitation of legal tax loopholes, disguised payments and possible "sham" transactions.

You can read much more at the above links.

A Governor General To Be Proud Of

While the traditional role of the Governor General is to play the mute on any issues that may upset some, smile engagingly at state functions and mouth sanctimonious platitudes upon demand, Julie Payette has a different take on her function. I applaud her for it.

It is difficult to understand how, in the 21st century, we are supposed to acknowledge the importance of science, yet refrain from any scientific references that may offend those who are doctrinally obstinate, adhere to junk science, or demand that religious tenets be taken literally. Truths may be unpalatable to some, but they are still truths.

For that reason I am having a hard time understanding the outrage that Julie Payette's comments in the above video have provoked.

In a CBC essay, opinion columnist Robyn Urback, while agreeing with the truths Payette uttered, finds them wholly inappropriate:

This is a column, rather, on whether the Queen's representative in Canada — someone who is supposed to be uncontroversial and apolitical in her role as steward of the functioning of the government of Canada — should be deriding people for their beliefs on issues like climate change, religion and alternative medicine.

Urback's justification for polite silence goes beyond the impartial role the Governor General has historically played:

The role of the Governor General is apolitical by design; as a representative of the Crown, she is expected to use her executive powers in the interest of Canada, and not a single party, or group or administration. The integrity of the role falls apart if the governor general is perceived to be of one camp or another.

For that reason, some will argue that the Governor General should never weigh in on topics that are even remotely political. They argue that while some people have decided that, for example, the science is settled on climate change, the very fact that debate still exists on the topic should preclude the Governor General from inserting herself in the conversation, lest she appear to be of a certain allegiance.

The fact that Payette's comments can in any way be construed as political says perhaps more than we would like to admit about the state of discourse today. Have we now descended to being influenced by the lowest denominator, the schoolboy bully or the one who threatens to inform on us to the teacher? Those afflicted with benighted thinking may be offended; but that possibility must surely not be the determinant of what is considered fit for public consumption.

A race to the bottom is an easy one to win. Coming in last takes real effort, courage and integrity.

The Sickness Unto Death

Cognitive dissonance might be one way to describe how we conduct our lives in the face of climate change and environmental degradation. Willful ignorance might be another. Or, perhaps most damning of all, willful self-indulgence, in which we exult our passion for convenience and comfort over their cost to the larger society, and the world, around us.

Any way you define it, the picture is grim.

It is clear why our governments make only token gestures to mitigate the damage we are doing to the world. Real action would require sacrifice, a virtue that seems to have largely disappeared from our modern age. Any politician who tries to do what must be done would pay a very heavy price indeed. And despite new reports about the dire health impacts already underway due to climate change, dealt with in today's Star and in a post by The Mound the other day, I think we all know that there will be no restorative measures pursued by our 'leaders.'

That inaction provides for all of us a convenient shield from an inconvenient and very unpalatable truth: our collective refusal to act as individuals (I hope that's not an oxymoron) to slow the pace of our rapidly deteriorating world. I know that sounds like a massive over generalization, and that in fact many individuals and groups are dedicated to doing what they can in the face of the existential crisis we have created. But their efforts, as noble as they are, seem to fork little lightning among the general populace, who seem hellbent on continuing their wasteful and destructive ways.

If you want an illustration of this, you need look no further than the massive popularity that coffee pods, and to a lesser extent, tea pods, enjoy. An extremely wasteful and expensive technology unless you live on your own and drink one cup a day, the majority of these pods are not even compostable, something Ontario PC MPP Norm Miller is trying to do something about via a private member's bill:

He’s pushing for all parties at Queens’ Park to support a law requiring every single-use coffee pods sold in Ontario to be compostable within four years so they can be tossed into the green bin as soon as the cup of Joe is brewed.

The goal is to keep more of the 1.5 billion pods used annually in Canada out of garbage dumps.

“Ontario has a waste problem,” said Miller (Parry Sound-Muskoka) Wednesday before presenting his private members’ bill. He cited a recent warning from the province’s environmental commissioner.

While some companies, including Loblaw, McDonald’s and Muskoka Roastery Coffee Co., sell java in compostable Keurig-style pods, the majority of pods sold in Ontario are made elsewhere and are not recyclable or compostable, Miller said.

However, there is that pesky problem of the consumer's addiction to convenience, which limits even recycling of the pods:

Recyclable pods are “finicky” to deal with because the cap must be torn off and the coffee grounds rinsed out and the plastic cup thrown in the blue bin, Miller said.

Precisely the reason I suspect that Miller's initiative is doomed to failure. Imagine the 'extra' effort putting compostable pods into a green bin would entail for the harried and selfish consumer.

What is my point here? Clearly, non-compostable coffee pods are not the worst environmental problem we face today. Their massive popularity, however, is a symptom of the larger problem fueling our increasingly debased planet. As Walt Kelly in his famous comic strip Pogo wrote:

“WE HAVE MET THE ENEMY AND HE IS US.”

Dear Justin

Stand.earth, formerly Forest Ethics, has this message for Justin Trudeau. You can help spread the message by clicking here.

Guest Post: A Response To Flying Blind

Yesterday's post dealt with the announcement that a degree of self-regulation is to be conferred on the airline industry by the Trudeau government. Given the fraught history of self-regulation in this country, it is alarming news. BM, a frequent commentator, offered an analysis of the situation as well as an interesting perspective on what is driving that change. I am taking the liberty of featuring his insights as a guest post:

Well, it would certainly argue against flying Air Canada to San Fran, where the existing pilots seem to be having a tough job as it is. That second incident where the pilot ignored 6 request/orders to go around and couldn't see the flashing red light either was a doozy. The short interview I heard with the pilot, equipped with a plummy British accent, was revealing. Radio trouble. Oh yes? With at least three radios available, according to other pilots in various pilots' online forums. Not mentioned - blindness to flashing red lights from the control tower.

In a proper quality assurance system, amply documented and thus verifiable to process under an outside audit, where procedures are detailed to a very fine degree, letting the industry "run" itself is just fine. Electricity and Gas meters are inspected under this regime in Canada - I was involved in setting such a system up. In the 1990s, not now. It does require that company executives be part of the system as well, and part of the audit. Everyone has procedures they must know inside out, no excuses. There are avenues for considering improvements, and documentation of everyone's training and ability to follow the system. In other words, some shop foreman in a lousy mood cannot come in one morning and change what everyone does, just because HE/SHE feels like it, or there is a recorded miscompliance report which anyone can make without fear of retribution. Keeps 'em all sane.

When it comes to meatcutting or piloting, you are dealing with situations that are not boringly standard, like instrument testing. Turnover of personnel is highly likely in the meat business, and low wages with perhaps poor English skills only exacerbate problems with written procedures. Oversight is necessary. And pilots, well they all believe they know what's best and which SOPs they can disregard. You just have to go to the TSB's website and read accident analyses to see that.

The driving force for self-regulation in industry is no doubt driven by the same Public Service pointy-heads who cannot see the difference between an ordered industrial process and situations where the humans require continual oversight. The politicians are merely attracted by the promise of saving money given them by their public service advisers, so I cannot blame either Liberals or Conservatives myself. Politicians sometimes have trouble tieing their own shoelaces, let alone understanding anything complicated. And the average person hasn't a clue about the difference between quality inspection and quality assurance, the latter being the self-regulation system, the first where outsiders check every bit. You don't need to inspect every single widget if the process is under control. That's the way cars are made these days, with the possible exception of FCA.

Lack of commonsense is the problem. One process is not the same as another and may not be amenable to auditable self-regulation.

Flying Blind

Many will recall that during the Harper era, our country moved toward greater self-regulation in various industries, often with disastrous results. From tainted meat to railway disasters, the lesson is clear: leaving safety up to the corporate sector, whose prime directive is to maximize profit for their shareholders, is a dangerous gamble with the health and lives of Canadians.

Now the neoliberal Trudeau government is taking a page out of the Harper agenda, a move that will put those who fly at greater risk.

Transport Canada is planning to stop evaluating pilots who perform checks on their counterparts at the country’s largest airlines and will instead give the responsibility to the operators, a change critics say erodes oversight and public safety.

The current practice of having Transport Canada evaluate those pilots who evaluate other pilots in the airline industry will stop as of April 1 for airlines with planes that fly more than 50 passengers. This, as reported today, is a drastic departure from accepted practices in other countries, which stipulates that pilots be evaluated twice a year.

Greg McConnell, chairman of the pilots association, said the changes are pushing Canada’s aviation safety system onto the industry itself.

“I think it’s very, very important that people understand we are getting closer to self-regulation all the time.” he said in an interview. “It’s just more cutting, more dismantling of the safety net.”

The safety compromise inherent in this decision is not going unnoticed:

New Democrat MP Robert Aubin, the committee’s other vice-chair, said the decision was “curious” because Transport Canada said it was doing more oversight, not less.

“I have concerns if the pilots who evaluate their pilots are not evaluated by Transport Canada. We have to have the same standards,” he said in an interview. “We have to increase the resources at Transport Canada to make sure we can do that job.”

For the Star article carrying this story, no Liberals were available for comment, hardly a surprise given the shameful nature of their decision here.

The fear of progressive taxation that the current government has shown seems to working its way through the system. It cannot be a comforting thought for those planning their next trip by air.

Not A Dirty Word

In his column the other day, Rick Salutin wrote a stout defence of taxes, making it very clear that for him and many others, the word and the concept are hardly obscenities.

Public programs need to be adequately funded and expanded, the opposite of the American mentality:

Take tax reform. To U.S. Republicans, it means one thing: cuts. It’s their ultimate “reason for existing” (Financial Times). They staggered into the light this week to say (again) that Americans should keep their hard-earned money to pay their medical and university bills. Ha ha ha. There’s no way tax cuts will cover most such costs, though you might be able to repave your carport. What would help? More taxes. That could fund national “free” health care or tuition. But it would mean bigger government, levying higher taxes.

Here in Canada, the need for an expansion, not a contraction, of government intervention in people's lives is becoming increasingly obvious. Salutin cites the sad situation of dismissed Sears workers who are facing loss of severance and reduced pensions as a result of the chain's bankruptcy. This dire situation is mirrored in larger society by the growth of precarious work and the fact that company pensions are fast becoming relics of an earlier era. Echoing a sentiment recently expressed by his colleague, Thomas Walkom, he offers this:

The obvious solution is the health-care model: public programs like CPP not to supplement private pensions but to replace and amplify them — i.e., bigger government.

The mystery is why anyone ever thought private companies were the way to cover huge costs like health or pensions. It’s costly and patchwork; public programs make far more sense. They’re stabler, better funded and include some democratic oversight.

The rub in all of this is that such transformation requires something far too many have become allergic to: increased taxation.

Public programs, however, mean you need revenues to fund them. And presto, you’re back to taxes...to run national programs, taxes must be accumulated, not just endlessly cut.

It’s a simple picture and it’s amazing how Finance Minister Bill Morneau managed not to paint it with his summer tax “reform” rollout: get more tax revenues from the rich, who can afford it, to fund big programs; and give cuts to those who’ll spend to stimulate the economy, generating more revenues.

Salutin ends his piece by a personal testament to the need for properly-funded programs:

In recent weeks I’ve had (public sector) fire trucks at the house twice — for a fallen branch on power lines, then two false CO alarms in two days. They came swiftly, cheerily and competently, unlike my private gas provider, who effectively said, from wherever on the globe, that they didn’t give a flying leap.

I will close with a letter from today's Star that echoes Salutin's sentiments:

The big government era isn’t over. It may just be getting started, Salutin, Oct. 27

For the love of our aging and long-lived demographic, Rick Salutin has nailed it. We need to reframe the tax conversation. I don’t know where we’ve lost our way about this as a country or even as a society, but I remain confused when people say such things as, “but taxes will increase,” like a venomous accusation, rather than recognizing what it means to enjoy things such as clean drinking water and not having to build in a $50,000 rainy-day fund just in case we slip and break our hip (in the middle of the forest, no less, with no one to sue).

It scares me to think that if Canada had tried to socialize health care in this day and age, society is at a point where we would have said no and cried out for “lower taxes, not my money” instead.

If all we ever hear about is scandals and corruption, it’s little wonder why no one trusts government to handle the public purse anymore. I say keep at it, let’s talk about the privileges our society gets to enjoy for the value of its tax money and how much we’re going to need it in the decades to come.

Jennifer Ng, Richmond Hill