Our eyes widen in amazement when we read the latest proposal by the new Liberal leader, Kevin Vickers: make New Brunswick into a tax haven. The idea not only is completely unacceptable in principle but also raises a potential dispute from a political point of view. First, tax havens are a scourge that explain the difficulty that Western jurisdictions, such as New Brunswick, have in properly funding public services. Canadian businesses funnel tens of billions of dollars into tax havens to avoid paying their fair share of taxes, and at the same time federal and provincial governments, allowing themselves to be strangled by debt, must either cut services or charge fees for them, moving the tax burden onto the middle class and small and medium businesses.
Every year we see that countries such as Barbados, the Bahamas or Luxembourg are among the main destinations for “foreign direct investment” from Canadian firms. A well-known example is the Irving family. Some fifty years ago, they devised accounting schemes in Bermuda, legalized here by the public authorities they know how to influence.
In wanting to make us the “Ireland” of America, Mr. Vickers wishes to invite large multinational companies to create corporations on our territory that will artificially channel profits into their tax-free New Brunswick accounts, and deprive the countries where those profits were generated of their fair share of revenue.
Not only is this decadent way of thinking about the economy completely irrelevant in terms of job creation, it also shows how taxpayers here have been abused for decades, leaving a large part of the profits generated here to be artificially accounted for elsewhere, by means of convenient, tax-friendly legislation.
But it gets worse. Ireland’s tax measures, to which the Liberal leader refers, have been severely criticized by the European Union! In 2016, Europe forced Apple to repay 13 billion euros because of Ireland’s undue largesse. This is the largest penalty ever imposed on a company for illegal state aid, to which we can add the numerous fines that Google has received for the same reasons. On this occasion, the European Commissioner for Competition, Margrethe Vestager, denounced Ireland, a member of the EU, explicitly describing its tax policies as a form of legislative abuse. By providing tax benefits for companies that were in reality operating largely outside its borders, Ireland was legislating on how capital generated in other countries should be administered. This form of political interference is reprehensible in principle.
Not only does this proposal demonstrate a feeble imagination, it is also truly distressing. Moreover, by declaring himself fiscally “conservative”, “NDP” on social issues and “greener than the Greens” on the environment, Mr. Vickers finally reminds us what a “liberal” is in our country: a politically confused subject who is only in the business of electoral seduction.
Alain Deneault is a professor of philosophy at the Université de Moncton (Campus de Shippagan) and the author of Canada: A New tax Haven (Talonbooks) and Legalizing Theft (Fernwood).
This op-ed first appeared in Acadie Nouvelle and was translated for the NB Media Co-op by Jeff Bate Boerop. The original article in Acadie Nouvelle about Kevin Vickers’ plan, based on an interview with the Liberal leader, is here.