By Carl Oliver in Toronto
An unprecedented scandal of the Canadian taxation system has been revealed by the release of the Paradise Papers. The leak dwarfs that of the Panama Papers and amount to a true earthquake hitting some of Canada’s richest individuals, corporations and politicians.
Canadian news outlets such as the Toronto Star and the Canadian Broadcast Corporation, and international papers such the Guardian, have produced detailed reports exposing the intricacies of the tax evasion networks and their operations. They show how more than 3,000 Canadian individuals as well as corporations, such as Loblaw, have links to businesses in offshore tax havens, which is for the most part legal under Canadian taxation laws.
The Liberal Connection
The Liberal Party of Canada has been particularly hard hit by the scandal, with the names of Steve Bronfman, the party’s chief fundraiser of the current prime minister, Justin Trudeau, as well as former prime ministers Jean Chrétien, Paul Martin and Brian Mulroney all appearing in the files of Appleby – one of the world’s most prestigious law firms involved in tax evasion operations.
The Toronto Star has reported that “two generations of Liberal fundraisers — Stephen Bronfman and his godfather, 88-year-old retired senator Leo Kolber — are tied together in a complex offshore structure that amassed $60 million (U.S.) in a tax haven beyond the reach of tax collectors in Canada, Israel and the U.S.”
It is impossible not to believe that Liberal politicians and especially the Trudeaus, who have a long-standing relationship with the Bronfman and Kolber families, are not fully aware and supportive of the tax-evading behavior of their friends. The revelations show how far removed the reality is from Trudeau´s electoral promise of making the rich pay more taxes and his rallying cry that everyone should pay their fair share!
The Israeli connection is a very a curious fact. Just like the Conservatives, the Canadian Liberals have long been some of the world´s staunchest supporters of the repressive Zionist state. The leaked information is a glaring example of how little this support has to with caring for the wellbeing of Jewish people. The reality is much cruder than that. The Canadian ruling class is heavily involved in big economic interests and financial ties with its Israeli counterpart and will go to any despicable extent to defend those interests.
Leading the way in Corruption and Cheating
The leaks are quite shocking as they show not only the scope but also the depth of the problem in Canada. It would not be an exaggeration to say that Canada has been an international leader when it comes to tax evasion.
The CBC has reported on a five-year struggle that went on between parliamentary budget officers and the Canada Revenue Agency (CRA) over the release of data necessary to calculating the gap between taxes due and those collected. The fight was to no avail as the CRA categorically refused to release relevant data claiming that such action would be illegal. As a result, we do not even know how much taxation money is missing from the Canadian coffers, let alone pursuing those guilty!
The release of such data in a standard practice in most western countries, including the USA and Britain, so what is the secretiveness all about? The CRA is certainly not protecting the information of ordinary Canadians but rather of those wealthy individuals and companies hiding their finances, and unpaid taxes, from the public eye.
A particularly scandalous revelation is that, at some point, the firm Appleby was considering setting up operations in Halifax, Nova Scotia to support its operations in Bermuda. The Toronto Star has lamented that a case for Halifax was stronger since such operation would produce “very reasonable operating costs” and “very significant payroll tax rebates.” The Canadian elite and their lawyers are so emboldened by the tolerance and implicit support of the state that they are not only deeply involved in tax havens in far away places but even wanted to bring them right onto Canadian soil!
The Canadian Ruling Class
The Canadian ruling class has had certain success in carefully cultivating its image over the years as peaceful, civilized and ethical as opposed to its violent and vile counterpart to the south of the border. However, events and revelations have been stripping the Canadian elites bare of their pretentions.
The Canadian ruling class is being exposed for what it really is by the continuation of the sever injustice and neglect of aboriginal communities, the destruction of human communities and ruin of environment that Canadian mining corporation are responsible for in South American countries , the sale of weapons to a semi-feudal Saudi Arabian regime representing the darkest of reaction, the unwavering support to Israeli repression of the Palestinians, and now the widespread financial corruption and cheating shown in the Paradise papers.
At bottom what this shows is that there is one capitalist class which is nice and another which is nasty. Capitalism is the same everywhere, whether it is the aggressive in-your-face capitalism of powerful nations like the USA, or the sneaky behind closed doors capitalism or weaker states like Canada, the system is a relentless machine that seeks the enrichment of the handful few regardless of any other considerations.
How to Respond
Following the leak, the Canadian Tories made a cynical attempt to slam the Liberals in parliament, demanding that Justin Trudeau returns the money raised for his campaign by Bronfman. Only a couple days later, it was reported in the media that Duane McMullen, a public servant in the last Tory government of Stephen Harper, had met with lobbyists of offshore businesses to give them advise and encouragement, all the while the prime minister was committing himself to greater transparency on offshore tax heavens!
This shows that representatives of Canadian capitalism are all but the same. The only party that can and should challenge the corruption of the capitalist parties is the NDP, provided that its leadership takes a principled and uncompromising position on the question. Bill C-362 which is being proposed by the NDP to deny tax breaks on the type of banking transactions used in tax avoidance operation is a good start, but even if it passed, it cannot be solely depended open to redress the problem.
The rich and their lawyers are masters of the system and have endless roundabout ways and tricks to bypass the laws. To win this battle, the NDP must be prepared to go all the way in combatting the problem, including expropriations of individual wealth and nationalizations of banks and corporation. Additionally, it is not enough to carry the fight on the field of formal politics. Grassroots organizing by the labor movement is vital. All big companies and financial institutions must open their books for review by committees of elected workers, only then we can be sure that everyone is paying their faire share of taxes!
November 9, 2017
