- Lisa Phillips writes about the desperate need for Canadian courts to ensure a fair tax system, rather than allowing technicalities and loopholes to win out over the principle that everybody should pay a fair share:
With some exceptions, Canadian judges have defaulted to a literal reading of tax law that is based on 19th-century English precedents. This approach stresses, above all, the right of property owners to rearrange their affairs to minimize tax.- Allan Holmes observes that a lack of access to high-speed Internet service represents a serious barrier to full public and economic participation for people living in poverty. And Don Pittis contrasts the compelling arguments against exploitative payday lending with the implausible claim that anybody is better off living in inescapable debt, while Nicholas Kristof laments the blight of debtors' prisons for poor individuals who have no prospect of paying off gratuitous fines.
In the United States, the courts took a different tack, ignoring transactions that were designed purely to escape tax. By the 1970s, the English judiciary was also moving in this direction. In a series of landmark cases, they recognized that taxpayer liberty must be balanced with the need to distribute the cost of government services fairly, according to Parliament’s intentions. Canadian courts have been slower to leave 19th-century England behind.Frustrated by our judiciary’s passive approach, the government added a general anti-avoidance rule to the Income Tax Act in 1988. The rule gives judges explicit authority to override tax planning that abuses the law by defeating its purpose. Yet, in many cases, our courts are hesitant to follow through....Such rulings bear a share of the responsibility for eroding the integrity and fairness of Canada’s tax system. They signal that tax planners can be aggressive in pushing the limits of the law, creating a thriving market for new avoidance ideas. As soon as one implausible story succeeds, the race is on to manufacture more. Authorities struggle to keep up and understandably wonder whether it is wise to invest their limited resources to challenge these ventures in court. Rewriting the tax law to close technical loopholes must be done carefully. By the time it is done, tax planners have already moved on to the next gambit. It is easy to point the finger at lawyers and accountants as enablers. It is true that these professionals make a handsome living from helping their clients to reduce tax bills. Some will admit privately their discomfort with deals that seem to make a mockery of the progressive income tax. But, in most cases, they are only doing what the courts have licensed. Until the judiciary also sends a stronger message, we can expect a culture of aggressive planning to persist.
- Felicity Hannah points out that self-employment tends to lead to poverty. And Kathryn May reports on a PIPSC study showing the dangers of outsourcing federal government services to precarious workers.
- Juliane Kippenberg discusses the International Labour Organization's efforts to eliminate abuses in global supply chains - despite the greediest efforts of the corporations who profit from them.
- Finally, Alex Press notes that the Trans-Pacific Partnership stands to enrich biotech companies at the expense of both farmers' incomes and biodiversity. And Ben Parfitt looks at the Peace River - with its combination of landslides, toxic fracking chemicals and earthquake risks - as an alarming example of happens when multiple environmental factors are all subject to insufficient analysis and regulation.