Should the CBC be compelled to release the information it has on Canadians who hold secret offshore bank accounts?
As a taxpayer currently filing my own annual income statements for tax purposes, I really do want to say yes.
But as a journalist — and looking at the global picture — I also conclude that a greater measure of justice will likely be done if we maintain our tradition of journalistic integrity to our sources. Besides, when it comes to matters touching on the most wealthy, the most privileged and the best-connected of people, I trust the CBC more to deal with the matter in a way that’s fair to me, than I trust the federal government right now.
In time, I expect the world will have rather much fewer super-wealthy tax cheats in it, and governments everywhere will have rather more incentive to be diligent in pursuing tax cheats when they don’t know exactly how much information the media has on hand to reveal.
By all reports, there’s a lot of information involved. It’s 30 years worth of data involving 130,000 people worldwide. In volume alone, it’s said to be 162 times more data than was contained in the blockbuster WikkiLeaks release of U.S. government secrets in 2010.
CBC was the only Canadian recipient of the 2.5 million files leaked to 38 members of the International Consortium of Investigative Journalists.
Canada publishes no estimate of the tax revenue lost when wealthy individuals secretly sock their billions into offshore accounts. But if the super-rich in Canada are tax cheats in the same proportion as in other countries, the loss to the Canadian treasury would be about $7 billion a year, according to the think tank Tax Justice Network.
That’s about a quarter of the government’s annual budget deficit.
The CBC has documents on some 450 Canadians.
So far, the CBC has only reported one case from among its files. Regina lawyer Tony Merchant, noted as the “king of class action suits,” and spouse of Liberal senator Pana Merchant, was reported to have about $1.7 million in offshore in accounts where Pana and the couple’s three sons are listed as beneficiaries. The money was transferred while Merchant was involved in a battle with Revenue Canada over taxes owed.
That’s about all we know for now — and that’s far from a legal conviction. But in an editorial published by the CBC’s Jennifer McGuire, more information will be published in coming months as they sift through the data.
Just the same, Canada’s most wealthy do keep good company. So far, a smattering of reports in 37 other countries has revealed these tidbits:
l In the U.K., statements have been found about a property tycoon already in jail for hiding $600 million offshore during divorce proceedings;
l In Russia, the deputy premier’s wife has been named publicly, as have managers of top military contractors;
l In Germany, the former husband of movie star Brigitte Bardot was revealed to keep a network of accounts in tax havens;
l In France, the treasurer of president Francois Holland’s election campaign has come under scrutiny;
l In Italy, the former head of information security for Telecom Italia (who was arrested in 2007 for illegally obtaining information on 4,000 people, including politicians and journalists) is once more in the news;
l In Greece, the government is said to have little clue about the offshore accounts of Greek citizens.
Who knows, maybe somebody at cash-strapped CBC is working a dodge. In delivering Canada’s Action Plan, Finance Minister Jim Flaherty announced that anyone blowing the whistle on major tax cheats can expect up to 15 per cent of taxes recovered as a reward, if the recovery is over $100,000.
Around the same time, the Canada Revenue Agency announced a $300-million budget cut, to take place over three years, killing about 3,000 jobs; and $100 million of that was in the department that works on compliance programs.
As I said, I trust the CBC more to ensure that tax cheats are named and prosecuted than I trust the federal government. That may be a failing on my part, exacerbated while my own federal tax bill is being tallied.
For now, up to 450 Canadians with offshore accounts have some space to come clean and work a deal with Revenue Canada, before the headlines hit the fan.
Greg Neiman is a retired Advocate editor. Follow his blog at readersadvocate.blogspot.ca or email greg.neiman.blog@gmail.com.