Jim Flaherty’s Future
As published in the Ottawa Citizen, the Ottawa Sun, The Victoria Standard and the Toronto Star: March 22, 2014
As Jim Flaherty retires to “private life”, I wish him a speedy recovery from his lingering illness. Missing from the goodbye accolades is any mention of Flaherty’s greatest failure. Whether sick or healthy; Flaherty lacked the will to take any serious steps to collect the billions in unpaid taxes that sit safely in foreign tax shelters.
Flaherty’s tired excuse about not wanting to punish “job creators and innovators” is a bit threadbare in light of abysmal levels of corporate investment in Canada. If Canadian corporations are operating overseas while shifting profits to low-tax jurisdictions, exactly who is benefitting and just how “Canadian” are these companies if they employ foreigners and only benefit arms-length stockholders?
I challenged Flaherty’s flimsy logic whereby pursing elite tax evaders will increase the likelihood of capital flight, higher consumer prices and corporate bankruptcies. The possibility of these eventualities raises an interesting question: what do corporations receive in exchange for their taxes? Perhaps defenders of offshore tax shelters and corporate tax cuts forget that taxes pay for education, health care, infrastructure, public administration, law enforcement and the military. Without these programs there could be no business and large businesses benefit exponentially from tax-funded public services.
Beyond the fact that he has been busy turning Canada into a tax shelter; there is a more practical reason for Flaherty’s tax shelter reticence. I expect Flaherty, like his colleague Jim Prentiss; will resurface as a banking executive. To complete the circle; his replacement, Joe Oliver shifted from investment banking to the world of politics. Aren’t these the sort of individuals who wrecked the global economy in 2008?
Perhaps it is time for some fresh ideas at Finance. We need a finance minister who acknowledges that the “economy” depends on a healthy biosphere. Our financial elite and those economists who support their flawed reasoning inhabit a world of hazardous delusions based on short-term profit.