What Paradise Papers highlight is Liberal arrogance.
THE PARADISE PAPERS AREN’T A SCANDAL. LIBERAL HYPOCRISY IS.
Every once in a while the big grocery store near me holds a “no-tax” sale: shop all day Saturday and Sunday and don’t pay the HST!
It generally attracts a respectable crowd, which is understandable. Everyone likes to avoid taxes. Perhaps that’s why I haven’t yet managed to figure out why the “Paradise Papers” is being treated as a shocking revelation. It’s a snappy name, admittedly — way better than “a pile of legal papers pilfered from a law firm in Bermuda” — but the major discovery, as far as I can tell, is that the world contains a number of locations that offer tax advantages to those able to use them. They’re called “tax havens.” Sorry to disappoint anyone, but that’s about as shocking as the discovery that there’s a hill in Ottawa with a building on it called “Parliament.” You could have Googled “tax havens” at any time since Google was invented, and saved yourself the trouble.
If Canadians were doing illegal things at these tax havens, it might indeed be a story worthy of attention. But so far the news reports, despite alarming headlines, have been careful to mention that no one has been caught breaking any laws.
So what’s the deal? Reports in U.S. publications suggest there may have been some slippery operations going on under cover of offshore accounts — a big investor in Twitter, for instance, seems to have links to a bank controlled by Moscow, which would add further titillation to the inquiry into Russia’s social media operations; and Saint Bono, for all his preaching, seems well acquainted with protecting his money from inquiring eyes — but few of the other news flashes are all that shocking. Turns out Apple likes to shift money around to minimize its taxes, which is such a big secret that Congress has been jawing about it since at least 2013. The European Union has been after both Apple and Amazon to pay billions it claims are owed in back taxes.
The best anyone has come up with involving Canada is the news that a rich friend of Justin Trudeau loaned some money a long time ago to another rich Trudeau friend, and some of it may have found its way to the Cayman Islands. The rich lender, Stephen Bronfman, says he is a “proud Canadian” who “has always fully complied with all legal requirements, including with respect to taxes,” that he “has never funded nor used offshore trusts,” and any Canadian trusts he holds “have paid all taxes on all their income to the Canadian government.”
If there is cause to disbelieve this, I’m not aware of it. The only discernible reason it’s been turned into headlines is that Bronfman is a member of a well-known family, he’s rich, he’s a pal of Trudeau and he’s a big fundraiser for the Liberal party. If any of those are criminal offences, there are a bunch of other wealthy Liberals I could point out for the RCMP.
Unless some new development arises, the Paradise Papers are in no way a Canadian scandal. What they are is an embarrassment, as they further undermine the fairy tale that our prime minister is at heart an ordinary guy who shares the same sort of everyday-guy hopes, experiences and aspirations as the bulk of Canadians. The prime minister’s image has been carefully nurtured by his team of professionals, with great success. But it’s always been false, and observably so. How many other Canadians have been born at 24 Sussex, grew up with a trust fund, and earned their biggest paydays by giving pricey speeches trading on their last name? Name one other person you know who helicopters to the Aga Khan’s private island to spend a few days at Christmas, and can legitimately profess he was just visiting an old family friend.
There’s nothing illegal or unethical about being rich, or having wealthy friends, just as there’s nothing illegitimate about doing business with banks that don’t happen to be located in Canada. The obloquy comes from turning the mere possession of wealth into a target for envy and resentment, as if anyone who accumulates more than the normal amount of assets deserves to be denounced, ridiculed and publicly degraded. This is precisely the trap the Liberals fell into with Finance Minister Bill Morneau’s ill-fated tax reform effort, which was framed as an attack on greedy rich people using fancy accounting tricks to avoid paying their “fair share.” In reality, it was nothing more than an attempt to limit a provision that was being increasingly used in a way the government hadn’t intended. But, having demonized a large body of ordinary people for political purposes, the Liberals left themselves vulnerable when it emerged that Morneau himself was an enthusiastic patron of accountants and their fancy schemes.
Now Trudeau has been caught again, this time by association with a member of the Bronfman clan. If he considers all rich people suspect, what’s he doing hanging out with one of the country’s richest, innocent as Bronfman may be? When you curry resentment in others, it shouldn’t come as a surprise when you find yourself held to the same standards. Opposition members have enjoyed making this point, as they enthusiastically grill the prime minister and his finance minister in question period about this latest example of the government’s double standard.
It hasn’t been pleasant for the Liberals. They’ve been squirming uncomfortably. Morneau is considered so tainted the Toronto Star devoted 4,000 words on the weekend to trying to rehabilitate his image.
Unfortunately, there’s no evidence that they’ve learned anything from it. One of the hallmarks of arrogance is a refusal to backtrack from a glaring mistake.
Stephen Bronfman, left, with Justin Trudeau at a barn party in Prince Edward Island in 2013.