Tax evasion at the heart of global economy

The Globe and Mail reported September 19, 2014, after Elizabeth Thompson’s September 18 story at ipolitics:

Internal Canada Revenue Agency documents confirm the agency is cutting some of its most highly-trained staff and folding international tax evasion units…

The shakeup is raising concern both inside and outside the agency that the government is backing away from its promised crackdown on offshore tax cheats. Both the 2013 and 2014 federal budgets contained extensive pledges to increase enforcement in this area. There is also concern that veteran staff who know the ins and outs of offshore tax schemes will lose their jobs, leading some to take jobs in the private sector using that same knowledge to help clients reduce their tax bill…

Andrew Carnegie, a 19th century robber baron and 20th century philanthropist, once said:

As I grow older, I pay less attention to what men say. I just watch what they do.

That turns out to be good advice when considering Canada’s Conservative Party. It claimed that it would take aggressive action against tax evasion which, by extrapolation of American data, could be costing Canada $10 billion per year in tax revenue. In fact, the Canadian government has limited the ability of tax collectors to look behind complicated schemes of evasion and avoidance.

Once again, Conservatives are proven to be servants of the rich and powerful. We should not be surprised because prominent Conservatives have played professional roles is setting up offshore arrangements to avoid income taxes. Andrew Saxton, my own MP and a former Credit Suisse officer, is one of those.

In 2014, Credit Suisse plead guilty in the U.S. to criminal charges and paid $2.6 billion in penalties for assisting Americans evade tax. Numerous other professional companies, including the giant KPMG and Swiss bank UBS, were held to account for involvement in tax frauds. By comparison, Canadian tax recovery efforts have been muted and will now be further crippled.

The following item was published in April 2011:

In my riding of North Vancouver, the incumbent MP is Andrew Saxton. I did not vote for him in 2008 but my friend did because he liked Saxton’s local connections. Robert hates carpetbaggers and is still angry about Montreal born, Toronto based Liberal staffer Warren Kinsella running here in 1997.

By the way, Palmer Jarvis Communications gave $10,000 to Kinsella’s campaign, a fact more interesting when we learned AdScam inquiry head Justice John c3e91-saxton1001Gomery found important correspondence of Kinsella, then Executive Assistant to the Minister of Public Works, was “highly inappropriate.” Adscam, you may recall, had much to do with government money being spread around through advertising agencies in scams that resulted in jail time and much embarrassment to ethically challenged Liberals. We can only speculate about why Palmer Jarvis passed along a substantial donation to the former Chretien assistant running in North Vancouver.

Friend Robert heard Andrew Saxton was the Tory candidate in 2008 and his support was assured because according to Saxton’s official bio:

Andrew spent his early childhood living on the North Shore where his father built the Grouse Mountain skyride and headed up the mountain resort.

Actually, Andrew Saxton Sr. has been involved in much more than Grouse Mountain Resorts. He was a founder or senior executive of Laurentide Financial Corporation Ltd., Elite Insurance Company, BC Television Broadcasting System Ltd., Granville Island Hotel and Marina Ltd., King George Development Corporation and has been involved with numerous other corporations, including Impark and Northwest Sports, one time owner of the NHL Canucks. Another directorship is with Canadian Commercial Corporation, a crown trade accommodation agency that specializes in that right-wing habit of socializing risks and losses and privatizing profits. Anyway, I’m sure father and son appreciate the ability to get together in Ottawa without having to worry about paying their own travel expenses.

Unlike Robert, I was not so keen on Saxton, despite the candidate’s claimed roots in our North Shore community. Junior may have been born here but he did his schooling at Ontario’s vainglorious Upper Canada College. That’s the all-grades English style boy’s school where annual costs for boarding students is now over $50,000. James FitzGerald, an old boy, wrote a very non-official history of UCC. He says about the school:

Since opening its doors in 1829, Upper Canada College has stood at the very centre of the Canadian Establishment, turning out generations of Eatons and Bassetts, Masseys and Thomsons, Conachers and Airds.

Saxton went on to the University of Western Ontario then worked for Credit Suisse in Switzerland and New York. That is the international bank caught in the glare of a major IRS investigation of tax evasion that resulted in the indictment of a number of Credit Suisse executives. The bank is under scrutiny of tax authorities in Brazil, France and other nations. It is involved in a major German investigation after eleven hundred affluent citizens stashed more than a billion untaxed dollars in Swiss accounts.

Andrew Saxton Jr. has connection to an international tax investigation arising from his career with the bank. CNews Parliamentary Bureau reported:

Saxton’s name appears in Federal Court documents showing he approved a couple’s request to transfer close to $200,000 to a bank account in Lausanne, Switzerland.

Opposition parties say Saxton, the parliamentary secretary to the Treasury Board, should be dismissed from his position or at least step aside to allow an investigation to clear his name.

“The parliamentary secretary authorized these transfers and, as an experienced banker, he knew exactly what he was doing and why,” said NDP finance critic Thomas Mulcair, adding Saxton has no choice but to step down.

It is shocking to see that this government will tolerate an individual who would have authorized the transfer of funds to Switzerland so that a couple could avoid paying Canadian taxes,” said Bloc Quebecois MP Serge Cardin.

I am reading a fascinating book by Nicholas Shaxson, Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens. It is no surprise to anyone with more than a tiny bit of knowledge of international finance that tax avoidance and outright tax evasion are rampant in the international economy. Keep in mind that Canada has the weakest laws among developed nations against corporate crime, although the Republican Congress is aiming to have the USA catch up, or drop down, depending on your view.

Prem Sikka, professor of the University of Essex had this to say about the book:

An absolute gem that deserves to be read by anyone interested in the way contemporary globalization is undermining social justice. This masterpiece illuminates the dark places and shows the visible hand of governments, corporations, banks, accountants, lawyers and other pirates in creating fictitious offshore transactions and structures and picking our pockets.

This financial engineering has enabled companies and the wealthy elites to dodge taxes. The result is poverty, erosion of social infrastructure and hard won welfare rights and higher taxes for ordinary people. Nicholas Shaxson has done a wonderful job in lifting the lid off the inbuilt corruption that has become so naturalised in the western world.

I remind you of how media trolls like the Vancouver Sun’s think-tank alumni and the stars of talk radio, Bill Good and the Michaels, Campbell and Levy, regularly report that no one wants to pay more taxes. Therefore, healthcare Canadians enjoy must be slashed. Of course you won’t hear those boys talking about schemes of our wealthiest citizens to hide assets and income from taxation. And, we are not talking small sums. Extrapolation of American data suggests that Canada is losing over $10 billion a year in tax revenue, BC more than a $1 billion annually.

U.S. Senator Carl Levin is a longtime fighter against offshore tax abuse. He is working to stop U.S. tax cheats from using foreign havens and to stop the U.S. being a tax haven for foreign tax cheats. Last week, he spoke at the U.S. introduction of Treasure Island:

Nick Shaxson admirably lays out the history of how tax havens have become such an insidious feature of the global economy. Today, folks around the globe know to go offshore to hide money. They know tax havens can be used to hide funds not only from tax authorities, but from law enforcement, courts and creditors.

Enron had over 400 offshore subsidiaries. A single building in the Cayman Islands, called the Ugland House, serves as the mail drop for nearly 19,000 companies incorporated there for tax-dodging purposes. Hedge funds whose employees live right here in the U.S. pretend to be based in tax havens to dodge U.S. taxes, and some companies keep their money offshore so they don’t have to pay one thin dime to support this country – in fact, they get tax refunds instead.

The Senate Permanent Subcommittee on Investigations, which I chair, has spent more than a decade exploring how offshore tax havens conceal wealth, distort commerce, and abet crime, money laundering and corruption. The truth is that tax havens have declared economic war on honest countries, including the United States by helping U.S. taxpayers dodge U.S. taxes and rob the U.S. Treasury of needed funds.

The ongoing drain on the U.S. Treasury is massive – and it bears directly on the budget and deficit debate. In 2006, our Subcommittee estimated that offshore tax abuses cost our Treasury about $100 billion a year in lost revenues.

Democracy Now! interviewed Shaxson and you can hear it by podcast or video. This is their promo:

Offshore Banking and Tax Havens Have Become Heart of Global Economy

We look at how corporations and the wealthy use offshore banks and tax havens to avoid paying taxes and other governmental regulations. “Tax havens have grown so fast in the era of globalization, since the 1970s, that they are now right at the heart of the global economy and are absolutely huge,” says our guest, British journalist Nicholas Shaxson.

“There are anywhere between $10 and $20 trillion sitting offshore at the moment. Half of world trade is processed in one way or another through tax havens.”

Shaxson is the author of the new book, Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens.

I suggest that when you decide how you will mark your ballot, put weight on the actions of politicians, not on their words.


11 replies »

  1. The giant company's, hoard all the money. The cash flow around the globe stops. So then, there is a recession. This has gone on since, before WW11.

    Our government, gives these huge corporations, billions of our tax dollars. I saw that motion pass, while watching, the House of Commons TV channel. They also get huge tax reductions. Harper gave them another reduction, to come off Canadians paychecks.

    Our government, shouldn't allow those trillions to leave our country. The money was made off this country, so that's where the money should stay. That's why our health care, education system, and everything suffers. The country and the citizens are thieved from, to give to, greedy big businesses.

    In little Bolivia, the President threw a big American company out of his country. The company made a horrendous mess in the country's eco system, and were ripping off the Bolivian workers. A large religious sect from the U.S, bought huge tracts of land in Bolivia. They produced no food, employed no Bolivian people. He took the land, and gave it to his people. Now, that's someone who really cares about his country and his citizens.

    In Canada, corruption and greed governs, and to hell with the people.


  2. Since you are a resident of North Vancouver you should ask him why Sr has a security pass for the parliament buildings. A legitimate question for a voter to ask his MP.


  3. i want to find out about andrew saxton jr. as well andrew saxton sr. who changed his name some time after he came to canada in the late 1940s. saxton jr. is a drop in candidate here in north vancouver who is super connected but quiet with the harper regeime. any help would be appreciated.

    jay schumacher jay1200@hotmail.com


  4. There is another thing I heard on one of the newscasts yesterday. Despite all the grandstanding against Russia the Canadian government has lifted some of the sanctions they imposed on select Russians.

    Then there is the response from around the world regarding the ebola outbreak in Africa. It seems the reasons most of the talking heads are finally taking some steps to deal with it, but the reasons are anything but humanitarian. The focus is what effect this outbreak will have on the economy.

    When you start to join the dots regarding these sanctions, the ebola issue and the about turn on tax fraud one may conclude that these tax cheats have threatened economic harm to Canada. And while these elites thumb their collective noses at the CRA the peons just trying to get by will be hounded for every nickel the CRA deems is owed simply because they can.


  5. How to silence an author exposing the un-ethical tax agents. 'Canada's Dishonest Tax Police' was the name of my forthcoming book I was promoting in May 2001 based on how to deal with the tax man, including my story, a ten year battle over taxes to which I did not owe. On the 4th day, 2 Victoria police officers put me in handcuffs and had taken me to ER for mental health evaluation against my will. No call to lawyer or family, ordered out of my clothes and drugged against my will and institutionalized for 11 days because I refused to speak with psychiatrist before speaking with lawyer. On day 11 I spoke and was released immediately.

    Now I don't trust the un-ethical police/tax agents/medical un-professionals. Maybe the wealthy who stuff their money offshore invest heavily in BIG PHARMA, is so, it's a win win for them, but it leaves us to pay all the taxes they don't.

    “An Overabundance of Caution” by reporter Rob Wipond Focus magazine outlines a bit of the story in Dec 2013. This months issue of Focus Magazine Oct 2014, Rob discusses Policy changes 'A More Moral Policy' that we at Pacific South Western Advocates have been advocating for years, Who's watching the watchers?


  6. Anyone in N. Van. has probably seen the outrageous “Andrew Saxton, MP” van driving around. I know of no other MP so blatantly using his position for self promotion.

    And those weekly newsletters with their Feedback questions with their oh so biased wording… obvious Conservative talking points reworded as questions, and precomposed answers with check boxes, worded in a way as to make you look stupid if you don't check the “Yes” answer.


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