Roundup: Paradise Papers problems

Big explosive revelations yesterday as the Paradise Papers were released – a major document dump on more offshore tax havens and those who use it. Canadian connections include the head of fundraising for the Liberal Party, Stephen Bronfman, whose family trust holds assets there, the family of a former senator, while three former prime ministers – Brian Mulroney, Jean Chrétien and Paul Martin have tangential connections to accounts there, as does the Queen. And while headlines may describe Bronfman as a “close advisor,” the party is disputing that label.

The bigger concern seems to be that Bronfman’s long-time law firm lobbied successive governments against going after more offshore tax havens. (Funnily enough, it was the Conservatives who cut funding for CRA to do this kind of investigative work, while the Liberals reinvested in it). The question for the CRA in all of these revelations is whether these funds were managed in Canada – which would break the rules – or whether they were managed from their offshore locations. CRA, incidentally, says it won’t hesitate to investigate these new revelations, which is consistent with the messages we’ve been hearing from them since they got more money for this kind of work.

As for the Queen’s indirect involvement in this, investments made by her Duchy of Lancaster holdings have an indirect stake in a rent-to-own company accused of exploiting the poor by way of these offshore funds.

And now the political reaction. While the NDP will piously shout a chorus of “we told you that you should be going after offshore tax havens!” the Conservatives have already put out press releases describing this as having to do with cozy friends of the Liberals and that this is somehow hypocritical of their fighting for the middle class – never mind that I didn’t think that Mulroney was a Liberal, or the fact that most of these connections are fairly tangential and that there is no evidence of any wrongdoing. But hey, this is about “Liberal aristocracy” and not the “little guy” that they now profess to fight for. (Remember the days when the Conservatives were the party of Bay Street? Me neither).

And Question Period today? I can pretty much guarantee you that after Andrew Scheer makes his dig about Trudeau not standing up for people of faith after the Governor General’s speech the other night (and four days later, the pundits still haven’t gotten up off of their fainting couches from it), it will be endless rounds of questions about these “Liberal insiders” hiding money offshore, tying Bill Morneau to this by way of the Morneau Sheppel/Barbados conspiracy theory, and Diane Lebouthillier will be up constantly to say that this government is going after tax evaders where the previous government cut funding, and that “the net is closing.”

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Roundup: Not headed for a debt bomb

In light of the fall economic update, and the myriad of concerns about the level of the deficit and lack of a plan to get to balance in the near term, economist Kevin Milligan took us all to school over Twitter yesterday. The main message – that it’s not 1995, and we can’t keep talking about the deficit as though it were.

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Later on, Milligan took exception to the notion that the government has backtracked on their tax reform promises and made the situation worse. Not so, he tells us.

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So there you have it. Armchair punditry on deficits or tax changes (even from some economists) doesn’t necessarily stack up.

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Roundup: An involuntary nomination

The outcome at the Status of Women committee was not unexpected, had as much sulking and grousing as was to be expected. In a public and not secret vote, the Liberals and NDP members of the committee rejected the Conservatives’ choice of Rachael Harder to chair the committee, and when the Liberals nominated Karen Vecchio in her place, Vecchio tried to back out but was overruled, and those same Liberal and Conservative members voted her in.

And then the bellyaching began. A sour press release was issued about how this was somehow about “bullying and intimidation” of some poor young woman (which is a ridiculous characterisation), but that they would accept the democratic will of the committee. And the pundit class took to Twitter to decry how bizarre it was that a woman was being forced to take the chair of a committee that she didn’t want. I’m not exactly sympathetic to these cries, because this is what happens when you try to pull a stunt for the sake of being a provocateur, as Scheer is trying to do, but you don’t have the votes to back it up. Oh, and then they tried to wedge this into the frame of it being a distraction from the tax proposals, when it shouldn’t need to be said that this was a distraction of the Conservatives’ own making, owing to their particular tactical ineptitude.

Meanwhile, Liberals took to tweeting about how this would have made Harder Andrew Scheer’s “spokesperson” on the committee, which is bizarre and wrong – the chair is the committee’s spokesperson. It’s baffling that they would try to spin it in this fashion. Then again, one shouldn’t be surpised given how badly this whole affair has been for people describing how things work in Parliament. And it shouldn’t surprise me, and yet here we are, that not one journalist writing about this story, nor any pundit commenting on it, remarked about the fact that it makes no sense to put your critic forward as committee chair. None. The chair’s role is to be neutral, to run the meeting, arbitrate rules disputes and to ensure that witnesses and questioners stay within their timelines. They’re not supposed to vote unless it’s to break a tie, which shouldn’t happen very often given the numbers at play. Why would you want your critic – your point person in holding the government and in particular that associated minister, to account – to be hobbled in this way on committee, is baffling. It’s utterly incomprehensible if you follow the basics of how parliament is supposed to work. And yet nobody saw fit to call Scheer out on this fact. These details matter.

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QP: Statements for Edmonton and Vegas

In the wake of the installation ceremony for Her Excellency, the Right Honourable Julie Payette, Justin Trudeau was not in the Commons for QP, leaving only Andrew Scheer as the leader of note present. Scheer led off, mini-lectern on desk, reading about shock and sadness for the terrorist act in Edmonton over the weekend, and asked for a minister to update the House on the situation. Ralph Goodale read a statement of condemnation for the action and congratulations to the Edmonton Police Service for their actions, and updated on the injured. Scheer then read similar sentiments for the shooting in Las Vegas — minus the part about condemning global terror — and Chrystia Freeland responded with condolences and notes that one Canadian was confirmed killed and consular services were working to help victims and their families. (A second Canadian was later confirmed as having been killed). Scheer then moved onto the proposed tax changes, and Bill Morneau assured him that they were listening and would make changes to the proposals. Maxime Bernier was up next, saying that Morneau was not listening, and then raised the Morneau-Shepell conspiracy theory, and Morneau insisted that they were listening, which was why they engaged in consultations. After another round of the same in French, Alexandre Boulerice railed about the situation in Catalonia, but rather than answer, Bardish Chagger got up to read a statement of congratulations about Jagmeet Singh’s leadership victory. Boulerice asked again, and this time Chrystia Freeland said that Canada was hoping that Spain would act in a democratic manner. Pierre Nantel was up next, railing about the Netflix deal as selling out Canadian culture amidst a rate hike, and Mélanie Joly insisted that it was a good deal and was the first stage in modernising our cultural policies. Nantel and Joly went another round in English, not that the question or answer changed.

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Roundup: All abuzz about Netflix

It’s probably not a big surprise that the story for which the most ink (physical or digital, take your pick) was spilled yesterday were the culture policy changes that Mélanie Joly announced, punctuated by the grand announcement that Netflix had committed to spending half a billion dollars over five years on Canadian productions. But in there was also news that there would be no big bailout for the news media in this country, and there would be some funding boosts for the Canada Media Fund, the Canada Music Fund and the Canada Book Fund, and a creative export strategy, along with previously announced reforms of the Copyright Board.

Suffice to say, there’s a fair amount of grumbling from traditional broadcasters that Neflix is essentially getting away with murder, not bound by the same CanCon obligations of traditional broadcasters, nor are other Internet giants like Google and Facebook being asked to contribute to the same content creation funds that traditional media are. And there is some pretty legitimate concerns about this announced Netflix deal because it’s pretty opaque – Netflix will continue to be able to operate as a black box when it comes to their subscriber data, and while Sean Casey went on Power & Politics to insist that the $500 million was new money (given that Netflix had previously told Parliament that they were already spending “hundreds of millions of dollars” in Canada), it really doesn’t seem like that’s anything new given that previous statement. Netflix also says that the money isn’t coming from the recent rate-hike in Canada, but that’s not washing with a number of people. The Financial Post has a fairly comprehensive look at the announcement here, including the fact that the announcement seems to leave a lot of the heavy lifting into the future, which probably shouldn’t be a surprise.

I do think it should be incumbent upon us to remember that Netflix has not been a net benefit to the cultural sector in Canada. The late Denis McGrath used to refer to them as a “parasite” on the Canadian broadcast sector because they put no money into the production of shows that they streamed, encouraging the cord-cutting that starved the very platforms who produced those shows that they later streamed of funding. It’s a complex problem, and a handful of Netflix originals aren’t going to be the panacea for the Canadian film and television industry. If anything, it may hasten the decline.

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QP: What about Morneau-Shapell?

With it being Wednesday and with the PM out to town, there were a few more empty desks in the Commons, but QP rolled along regardless. Andrew Scheer led off, returning again to the proposed tax changes as an attack on “local businesses.” Jim Carr stood up to instead note that the opposition has been so concerned with women entrepreneurs, then how could they contenance the statements by Gerry Ritz in calling the environment minister “Climate Barbie.” Andrew Scheer didn’t respond, and stuck to his script, and so Carr stood up again, to again demand that the comments be denounced. Scheer again hewed to his script on “local businesses,” and Carr again expressed his disappointment and his expectation of a retraction. Onto Alain Rayes, who read the “local businesses” scripts in French, and this time, Bill Morneau stood up to reiterate that they were trying to make the system fairer for the middle class. They went another round of the same, before Thomas Mulcair rose for the NDP, railing that the PM left the door open to ballistic missile defence. Harjit Sajjan said that they were working actively with the US on NORAD modernisation, but the policy had not changed. Mulcair asked again in French, and Marc Garneau took this one, offering much the same response. Nathan Cullen was up next to rail about tax loopholes, and Diane Lebouthillier assured him they were going after tax avoidance. Alexandre Boulerice asked the same in French, and Bill Morneau gave his pat response on tax fairness.

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Roundup: Arnold Chan and his parliamentary legacy

News was delivered yesterday morning that Liberal MP Arnold Chan has succumbed to cancer and passed away earlier that morning. The news is a blow for Parliament, as Chan was a very decent and well-liked MP who was serious about the dignity of the institution. Back in June, he delivered a speech in Parliament that was viewed at the time as a bit of a farewell (which he insisted that it wasn’t), in which he implored that his fellow MPs not only demonstrate their love of Parliament, but that they demonstrate it by doing things like ending the reliance on talking points.

At the time that Chan made the speech, I wrote a column about its importance, and why more MPs should heed his words. Scripts and talking points have been suffocating our parliament and our very democracy, and it gets worse as time goes on. That Chan could see their inherent problems and try to break the cycle is encouraging, because it hopefully means that other MPs will too. It’s one of the reasons why I hope that as part of honouring Chan’s legacy, MPs will work to do away with the rules in the Commons that have led to the rise of canned speeches, and that we can get to a place where debate is no longer a series of speeches read into the record without actual exchanges, and where MPs actually become engaged in the material rather than just reading the points that their leaders’ offices handed their assistants to write up for them. Parliament should be more than that, and let’s hope that others follow Chan’s lead.

Here are some more remembrances of Chan by his colleagues.

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Roundup: Mike Duffy, white knight

Oh, Senator Mike Duffy. For his suffering, he has decided to launch a $7.8 million lawsuit against the RCMP, the Government of Canada, and the Senate itself. It’s not just about the two years of suspension without pay, or the reimbursement or legal fees, or indeed about the further clawbacks of his salary that the Senate undertook for his abuse of expense claims, or about the lost income from speaking fees that he could have claimed had he not been dragged through the process. No, Duffy is so concerned about the lack of Charter rights for those who work on the Hill that he’s willing to take on this multi-million-dollar lawsuit for the principle of the matter.

Such a hero.

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Now, I will be the first to admit that yes, the way in which Duffy’s suspension handled was hugely problematic, and that his rights to due process were trampled on because of political expediency, it cannot be argued that the Senate was illegitimate in the way it acted because as a self-governing parliamentary body, the Senate not only has the ability to police its own, it is in fact the only body that can police its members because of parliamentary privilege and institutional independence.

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While Duffy’s lawyer was effusive in his characterisation of Duffy’s acquittal, I’m not sure that it completely passes the smell test – Duffy was found not to have met the criminal test for fraud and breach of trust, but you cannot say that no rules were broken. The Senate has pointed to numerous examples where this was the case and fined him appropriately, and while he claims that the rules were too loose and vague, that is certainly not the case with all of his rejected claims. And it will raise questions if this suit goes ahead because the judge’s ruling was indeed problematic (and I know for a fact that there are other judges on that same bench who were not keen on it), and without an appeal being raised, that could raise more questions with this trial – if it goes to trial.

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Of course, we can’t deny that perhaps Duffy is looking for a settlement of a couple of million dollars, but I’m not sure that of the parties involved, the Senate would bite and go for it. They are still pretty sore about the whole thing and are keen to continue to prove that they are taking a hard line to those who abuse it. I would wager that they are more likely to fight this to the bitter end on principle, come what may.

Meanwhile, Susan Delacourt sees an odd parallel between Duffy and Omar Khadr in that their rights were violated (which is a bit of a stretch, legally speaking), while Christie Blatchford suggests that perhaps Duffy is indeed owed something because his rights to due process were robbed.

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Roundup: Preferential tax treatment warranted?

The hits keep on coming when it comes to the rhetoric about the proposed small business tax changes. If you listened to doctors, you would think that the government was outlawing self-incorporation. They’re not. If you listen to the Conservatives, it’s a “massive tax hike” and “hugely complex changes” which also doesn’t quite scan – yes, there is some complexity in how they plan to enforce the changes, but that’s not the same thing.

People also keep insisting that these changes won’t allow them to use their incorporation for savings purposes (whether for a buffer or for a maternity leave), which again, is not the case as the new rules have been outlined.

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Of course, when these facts meet their rhetoric, we have been assaulted with yet more wailing and gnashing of teeth that these preferential tax treatments are a “reward” for the risks that these entrepreneurs take. Which again, doesn’t actually fly with the research. (See Kevin Milligan’s thread starting here, which I won’t reproduce in its entirety).

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In fact, you can make a number of arguments about whether the government should be subsidising the risk of entrepreneurs. Also, the it should be restated that preferential tax rates are not the reward for becoming an entrepreneur – there are other rewards inherent in the role.

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Instead, we come back to the government’s argument about tax fairness, and why those who choose to self-incorporate and have families to split/sprinkle their income with should be the only ones to enjoys such privileges. Nobody seems to be able to answer that question. Funnily enough. Instead, it’s more disingenuous rhetoric and outright falsehoods about what’s being proposed here, that benefits only the very wealthy few for whom this kind of tax “planning” makes sense.

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Meanwhile, Andrew Coyne takes on the notion that small businesses should get preferential tax rates for risk-taking, while taking down the critics of his arguments, who similarly are building cases on false premises.

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Roundup: Normalizing the system’s problems

On Monday night, I got into a bit of a Twitter argument over the issue of Manitoba MLA Steven Fletcher (former of the federal Conservatives) and his ouster from provincial Progressive Conservative caucus because he was *gasp!* doing the actual job of a backbencher and trying to hold the government to account, never mind that he’s a member of the governing party. It’s what he’s supposed to do, and he got punished for it. Why I gave the first punch in said Twitter fight was because of the notion that Fletcher should have shut up and been a good team player, because politics.

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This devolved into a bit of tit-for-tat about which legislatures this occurs in, and despite providing Canadian examples, never mind the fact that this is actually the norm in the UK – the mother of our parliament – my dear opponent insisted that this is not the way things work in Canada.

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And this irritates me. A lot. Because it’s washing our hands of the problems that have slowly crept into our country’s parliament and legislatures, and normalizes the bastardisations that have occurred over the years, usually under the rubric of “modernisation,” or “making things more democratic.” And the laws of unintended consequences being what they are, things get worse instead of better, and we now have very powerful party leaders in this country that have no accountability – something that should be anathema to a Westminster system.

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Why should we be defending the current norms of party and leader-centred politics when it’s not the way our system is supposed to work, and in fact makes our system worse?

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We are in an age where message control and leader-centred politics has reduced elected members to drones. We have very nearly reached the point where we could just replace our MPs with battle droids who could do just as effective a job of reading canned speeches into the record and voting the way the whip orders. Is this really the system that we want to normalise and defend? Or would we rather have elected officials who can think for themselves and do the proper job of accountability that the Westminster system is built on. I know which one I’d prefer.

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