Sucks to be You: It's not My Tax Haven

A rather rich controversy has struck the Conservative party leadership race, or perhaps to be more specific, a controversy that could only arise for the rich.

The Conservatives have released an ad campaign that attacks Paul Martin for Canadian Steamship Lines' use of off-shore tax havens. Leadership hopeful Belinda Stronach has denied any connection to those ads, undoubtedly in part because her father makes liberal use of tax havens to avoid Canadian taxes.

Stronach defended herself by claiming that she personally does not make use of tax havens, and she distanced herself from her father by saying that he is not a candidate for the leadership. All true, but Ms. Stronach has regularly brought up the success of her father during her leadership bid for the Conservative Party. To bring up a variation of an old cliche, I guess she wants to eat her cake and have it too.

I think it's very important to focus attention on the fact that the wealthy, and only the wealthy, are able to profit considerably by setting up tax shelters in tax havens such as Bermuda, or Switzerland. The money needed to set up such an off-shore tax shelter is considerable. It requires the services of both lawyers and accountants, and it is only profitable when large sums of money are involved. It is not financially feasible for most working Canadians to make use of these loopholes in Canada's tax structure.

The question that has to be asked then is, who's interests are being served by enabling wealthy Canadians to move their money out of Canada? The wealthy enjoy the benefits of Canadian public infrastructure and civil society in order to run their businesses profitably, but those benefits are funded by the Canadian tax payer. Is it ethical for wealthy Canadians to avoid paying their fair share of taxes, while the bulk of their wealth is generated by Canadian society?

Clearly the wealth of successful entrepreneurs doesn't simply appear as the result of their hard work alone. It depends on the contributions of all working Canadians. The wealthy should not only be required to pay their fair share, but there is no good reason they should have tax benefits that less wealthy Canadians cannot enjoy. The fact that such tax breaks are available to such a select few indicates how those with money use the power it provides them to increase their wealth, and they do it to the detriment of all Canadians.

That Paul Martin, and Frank Stronach made millions in extra income by legally avoiding Canadian taxes, while the rest of Canadians had to endure punishing government service cuts, and massive reductions in healthcare funding; indicates an utter lack of ethics on the part of two very rich Canadians. Belinda Stronach, instead of attempting to skirt the issue, should confront it head on, but given her ideological bent, and the source of her own considerable wealth, I suspect that is unlikely.