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CANADIAN CENTRE FOR POLICY ALTERNATIVES NOVEMBER/DECEMBER 2019 Contributors

Erika Beauchesne is Matt Polacko is Progressive Members of the Resource Communications Co- Economics Fellow with the Movement (see article on ordinator at Canadians for Tax CCPA’s national office and a page 29): Daniel Hoyer Fairness. doctoral candidate in politics is a historian and project Vol. 26, No. 4 at Royal Holloway, University manager of the Seshat: Global Michael Cuenco is an ISSN 1198-497X of London. History Databank, and a part- independent researcher and Canada Post Publication 40009942 time professor at George advocate on tax issues. He is Jennifer Robson is Associate Monitor Brown College’s Centre The is published six times currently pursuing a master Professor of political a year by the Canadian Centre for for Preparatory & Liberal of global affairs at the Munk management at Carleton Policy Alternatives. Studies. Lindsay Wiginton School of Global Affairs and University grew up, lives and works as a The opinions expressed in the Public Policy. Monitor are those of the authors Toby Sanger is Director of transportation planner on the and do not necessarily reflect Jamie Kneen is the Canadians for Tax Fairness. traditional territories of the the views of the CCPA. Communications and He previously worked as Haudenosaunee, the Huron- Please send feedback to Outreach Co-ordinator for Senior Economist of the Wendat and the Anishinaabe [email protected]. MiningWatch Canada, and Canadian Union of Public Peoples. David Gray-Donald lives in Regina, Treaty 4 Editor: Stuart Trew is also responsible for the Employees, Chief Economist Senior Designer: Tim Scarth organization’s Africa program. for the Yukon government territory, but grew up in Layout: Susan Purtell and Principal Economic Toronto where he attended Madeline Lane-McKinley Editorial Board: Alyssa O’Dell, Policy Advisor to the Ontario Upper Canada College. He is is an editor of Blind Field Shannon Daub, Katie Raso, Erika Minister of Finance. the publisher of Briarpatch Shaker, Rick Telfer and a contributing editor Magazine and writes about for Commune Magazine. Katherine Scott is a senior Contributing Writers: climate justice. Bronwyn She is the author of Dear Z, economist in the CCPA’s HELP US SHED LIGHT ON THE Anthony N. Morgan, Frank Bayerl, Oatley, an organizer based in Elfreda Tetteh, Elaine Hughes, (Commune Editions). national office. Tkaronto, is an early inheritor Asad Ismi David Macdonald is a senior Nate Wallace is Policy committed to fighting for a ISSUES THAT MATTER TO YOU. CCPA National Office: economist in the CCPA’s Director of the Young New more equitable distribution 141 Laurier Avenue W, Suite 1000 national office. Democrats. of wealth, land and power. Ottawa, ON K1P 5J3 Claire Trottier, an assistant Tel: 613-563-1341 Shoshana Magnet is Sabrina Wilkinson is a professor at McGill University, (we’ve got some bright ideas) Fax: 613-233-1458 Associate Professor of SSHRC-funded doctoral won the lottery of life by [email protected] feminist and gender studies researcher at Goldsmiths, www.policyalternatives.ca being born in a wealthy and criminology at the University of London where family. Sylvie Trottier is a CCPA BC Office: University of Ottawa. she studies the politics of 520-700 West Pender Street mother, environmentalist internet policy in Canada. Vancouver, BC V6C 1G8 Lars Osberg is currently and member of a wealthy MAKE A DONATION Tax receipts are issued for contributions of $15 or more. Tel: 604-801-5121 McCulloch Professor of family who is committed to Fax: 604-801-5122 Economics at Dalhousie a sustainable and equitable [email protected] I would like to make a monthly contribution of: I would like to make a one-time donation of: University and the recent future. Jon McPhedran CCPA Manitoba Office: author of The Age of Waitzer is a white, jewish, 301-583 Ellice Avenue $25 $15 $10 Other ____ OR $300 $100 $75 Other ____ Increasing Inequality: The queer & genderqueer settler Winnipeg, MB R3B 1Z7 living in Tio’tia:ke (Montreal), Tel: 204-927-3200 Astonishing Rise of Canada’s [email protected] 1% (Lorimer). on the traditional territories of the Kanienʼkehá꞉ka. Selin PAYMENT TYPE: CCPA Nova Scotia Office: Jessa lives in Montreal/ I would like to receive my P.O. Box 8355 I’ve enclosed a cheque (made payable to CCPA, or void cheque for monthly donation) Halifax, NS B3K 5M1 Tio’tia:ke, unceded territory subscription to The Monitor: Tel: 902-240-0926 of the Kanien’keha:ka, where I’d like to make my contribution by: VISA MASTERCARD [email protected] she is a PhD student at McGill By e-mail CCPA Ontario Office: University. Mailed to my address 720 Bathurst Street, Room 307 CREDIT CARD NUMBER: Toronto, ON M5S 2R4 No Monitor, thanks Tel: 416-598-5985 EXPIRY DATE: SIGNATURE: [email protected] CCPA Saskatchewan Office: 2nd Floor, 2138 McIntyre Street Regina, SK S4P 2R7 CONTACT INFORMATION Tel: 306-924-3372 Fax: 306-586-5177 Return this form to: [email protected] Name Book reviews in the Michael Haddad is an Ottawa artist whose work 500-251 BANK ST. 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Features 41–51 x Global justice activists look back back look activists justice Global on two decades of neoliberal globalization monetizing is Facebook the social network / 50 Sabrina Wilkinson Old money and new questions questions new and money Old in AMLO’s Mexico / 41 Ismi Asad later years 20 Seattle, Battle for

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5–11 Up Front Up 3 SIGNATURE: 12–39 (made payable to CCPA, or void cheque for monthly donation) (made payable to CCPA, David Macdonald David SangerToby and Lars Osberg ScottKatherine Erika Beauschene interviews Kathleen Lahey AndersonJohn RobsonJennifer Erika Beauchesne Beauchesne Erika Samuel-Élie Lesage Kady Seguin and Emily Nickerson Jamie Kneen Members of the Resource Movement Wallace Nate Toby Sanger Toby Matt Polacko CuencoMichael Campbell Ryan “Freedom Gas” and the energy of geopolitics new Foster John The poverty of austerity Manitoba in Hajer Jesse Perspectives My wild, re-wilding summer Melanie Allison / go? rates tax top should high How / budgeting gender of realityand promise The / fairness taxwithout rights women’s advancecan’t Canada / discontent taxdigital our of Summer / enough good not progressive,buttaxes: Income / / justice fiscal towardirresistible Quebec’smarch / extractivessector the transparency in for case The / go? richesmining Canada’s do Where / inheritancestaxed! their want folks rich These / exist? billionairesto continueShould / now loopholestax these Close justice tax for up step to Time / binge cuttingtaxcorporate failedCanada’s / haven tax native and home our Canada, Oh / I t p a y s t o/ e n f o rkleptocrats” and c crooks efor target“soft C a ais Canada n a d i a n t a x l a w $10 Province Letters ||

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I would like to make a monthly contribution of: I would like to make a monthly contribution MAKE A DONATION PAYMENT TYPE: PAYMENT Michael Haddad is an work artist whose Ottawa in the Atlas has appeared , Buzzfeed, The Obscura , The Globe and Economist Mail, The New Yorker, WIRED, and elsewhere. Variety Members of the Resource of the Resource Members on (see article Movement 29): Daniel Hoyer page and project is a historian Seshat: Global the of manager a part- History Databank, and at George time professor Centre College’s Brown & Liberal Preparatory for Wiginton Studies. Lindsay as a and works lives up, grew planner on the transportation the territories of traditional the Huron- Haudenosaunee, and the Anishinaabe Wendat Gray-Donald David Peoples. 4 Treaty in Regina, lives up in but grew territory, he attended where Toronto He is College. Upper Canada Briarpatch the publisher of Magazine and writes about Bronwyn climate justice. based in , an organizer Oatley is an early inheritor Tkaronto, a to fighting for committed equitable distribution more land and power. wealth, of , an assistant Trottier Claire at McGill University, professor by life the lottery of won being born in a wealthy is a Trottier Sylvie family. environmentalist mother, a wealthy and member of to who is committed family a sustainable and equitable Jon McPhedran future. jewish, is a white, Waitzer settler queer & genderqueer (Montreal), living in Tio’tia:ke territories on the traditional Selin ꞉ka. the Kanienʼkehá of in Montreal/ lives Jessa territory unceded Tio’tia:ke, where the Kanien’keha:ka, of she is a PhD student at McGill University. Contributors is Progressive is Progressive Matt Polacko with the Fellow Economics a and national office CCPA’s politics candidate in doctoral University Holloway, at Royal London. of is Associate Robson Jennifer political of Professor at Carleton management University of is Director Sanger Toby Fairness. Tax for Canadians as worked He previously the of Senior Economist Public Union of Canadian Economist Chief Employees, government the Yukon for and Principal Economic to the Ontario Advisor Policy Finance. Minister of is a senior Katherine Scott in the CCPA’s economist national office. is Policy Nate Wallace New the Young of Director Democrats. Sabrina Wilkinson is a doctoral SSHRC-funded at Goldsmiths, researcher London where of University she studies the politics of internet policy in Canada. Book reviews in the in Book reviews co-ordinated Monitor are Octopus Books, a by anti- community-owned in bookstore oppressive Ottawa. is Erika Beauchesne Co- Communications Tax for at Canadians ordinator Fairness. is an Michael Cuenco and independent researcher He is on tax issues. advocate a master pursuing currently at the Munk global affairs of and Global Affairs School of Public Policy. Jamie Kneen is the and Communications for Co-ordinator Outreach and Canada, MiningWatch the for is also responsible program. Africa organization’s Madeline Lane-McKinley Blind Field is an editor of editor and a contributing . Commune Magazine for Z, Dear She is the author of Editions). (Commune is a senior Macdonald David in the CCPA’s economist national office. Shoshana Magnet is of Professor Associate studies and gender feminist at the and criminology Ottawa. of University is currently Osberg Lars of Professor McCulloch at Dalhousie Economics and the recent University The Age of author of Inequality: The Increasing Astonishing Rise of Canada’s 1% (Lorimer). Vol. 26, No. 4 26, No. Vol. 1198-497X ISSN Publication 40009942 Post Canada The Monitor is published six times for Centre the Canadian by a year Alternatives. Policy in the The opinions expressed the authors of those Monitor are reflect and do not necessarily the CCPA. of the views to Please send feedback [email protected]. Stuart Trew Editor: Senior Designer: Tim Scarth Susan Purtell Layout: O’Dell, Alyssa Board: Editorial Erika Katie Raso, Shannon Daub, Telfer Rick Shaker, Writers: Contributing Bayerl, Frank Anthony N. Morgan, Elaine Hughes, Tetteh, Elfreda Asad Ismi Office: National CCPA 1000 Suite W, 141 Laurier Avenue ON Ottawa, K1P 5J3 613-563-1341 Tel: 613-233-1458 Fax: [email protected] www.policyalternatives.ca BC Office: CCPA Street Pender 520-700 West BC Vancouver, V6C 1G8 604-801-5121 Tel: 604-801-5122 Fax: [email protected] Office: Manitoba CCPA Avenue 301-583 Ellice MB Winnipeg, R3B 1Z7 204-927-3200 Tel: [email protected] Office: Scotia Nova CCPA 8355 Box P.O. NS Halifax, B3K 5M1 902-240-0926 Tel: [email protected] Ontario Office: CCPA 307 Room Street, 720 Bathurst ON Toronto, M5S 2R4 416-598-5985 Tel: [email protected] Office: Saskatchewan CCPA Street 2138 McIntyre 2nd Floor, SK Regina, S4P 2R7 306-924-3372 Tel: 306-586-5177 Fax: [email protected] From the Editor

ERIKA BEAUCHESNE AND TOBY SANGER Why tax fairness?

AXES ARE THE foundation of a Cuenco and Erika Beauchesne. A pub- such as automated tax filing and viable healthy democracy. They fund lic registry of the real owners of assets savings options to lower-income fam- the public services we depend on could put a stop to that, they argue. ilies. Equally important is how well Tevery day: roads, schools, commu- Matt Polacko examines Canada’s these and other tax measures are en- nity and social services, health care, failed corporate tax-cutting binge. forced. Ryan Campbell examines how justice, environmental protection He reveals how decades’ worth of cuts to the Canada Revenue Agency and much more. The CCPA’s 2009 re- successive corporate tax cuts haven’t have made the tax system less fair in port Canada’s Quiet Bargain found led to economic growth or job creation, practice, and how it can be improved. that over three-quarters of Canadian but rather to widening the wealth gap. Advocacy groups in Canada have households receive more in benefits Google, Facebook, Apple, Amazon been influential in lobbying the from public services (about $40,000 and other digital giants in particular government to make taxes fairer. worth for the average family) than have been getting a free ride on their Samuel-Élie Lesage of the activist they pay in taxes. taxes. John Anderson describes how collective Échec aux paradis fiscaux Despite this, taxes still get a bum rap. damaging this has been and how we details how the movement has been Former prime minister Stephen Harper urgently need to take steps to tax especially vocal in Quebec, where the said he thought all taxes were bad. Over these digital firms fairly. Canada has provincial government has adopted the course of his government, and the also provided income tax cuts to those more progressive tax policies. Other several before it, the progressivity of who can afford to pay much more. articles in this issue by Kady Seguin, our tax system declined overall as cor- Toby Sanger and Lars Osberg consider Emily Nickerson and Jamie Kneen porate and top income tax rates were how much higher we can raise rates on explore how industry activists in cut and tax loopholes proliferated. The top incomes. the mining sector have led effective top 1% of Canadians by income now Cuts have only played one part in campaigns to increase corporate pay a lower overall rate of tax than all the growing divide between rich and transparency and tax justice, and the other income groups, including the poor. As our tax system has grown problems that still exist. poorest 10%. more complicated, it has also become As proposals to tax the rich gain Canada is emerging from its 43rd fed- less fair, offering numerous write-offs support in the U.S., Canadians are also eral election with a new government at and credits that primarily pay out to demanding similar policies here. We the helm. It faces no shortage of urgent corporations and wealthy Canadians. hear from members of the Resource domestic and global challenges. We can CCPA Senior Economist David Mac- Movement, a young organization afford to fund solutions to crises like donald highlights the most egregious comprised of privileged Canadians poverty, housing and climate change, expenditures and loopholes that cost who want to see an inheritance tax but substantial progress will require the government billions while bene- to tackle inequality. And in his arti- more funding and that should come fiting almost exclusively top earners, cle, Nate Wallace provocatively asks, from making our tax system fairer. In most of whom are men. But that’s “Should billionaires continue to exist?” this special edition of the Monitor, we just one of the ways in which govern- Given the potential for a wealth tax explore how we can do that. ment spending has failed to consider to counter inequality and fund major We lead off with a proposal for the the needs of women. CCPA’s Senior climate initiatives, he says the answer role Canada should play to end the rise Economist Katherine Scott takes us must be “no.” of offshore tax evasion. Toby Sanger’s through what fiscal measures can help It’s essential that the tax system be cover story traces the history of tax include women in spending decisions and be seen to be fair, otherwise trust havens and how these low-tax jurisdic- and what more needs to be done to and faith in the system will collapse. tions have made a multi-billion-dollar address gender bias in the tax system. Thankfully, pressure is mounting to hole in government revenues while There are other steps we can take to fix a system that no longer works. The allowing Canadian corporations and make the system more accessible and evidence is clear: Canadians need tax wealthy individuals to avoid paying beneficial to every Canadian. Jennifer fairness now. M their fair share at home. Canada has Robson looks at inroads the govern- ERIKA BEAUCHESNE AND TOBY SANGER, GUEST also become a destination for money ment has made to distribute benefits EDITORS ON THIS ISSUE OF THE MONITOR, WORK AT CANADIANS FOR TAX FAIRNESS. VISIT laundering and “snow washing” of to more of the people who need them, WWW.TAXFAIRNESS.CA FOR MORE INFORMATION. illicit funds, as explored by Michael and proposes further improvements, 2 BDS is about The West Bank Jewish Young Canadian Jews our values settlements are illegal. are increasingly willing to T Still, the last many Israeli criticize the Israeli govern- Re: Public and political governments have done ment on the basis of its views of Israel-Palestine their best to annex parts of anti–human rights policies. and the BDS movement, the West Bank, with mostly They adhere to our basic September/October 2019. silence from Canada and Jewish ethos of taking the U.S. Netanyahu’s reign care of the least of us: the People toss around has been the worst. He is widow and the orphan, the term BDS (Boycott, committed to depriving the strangers among Leers Divest, Sanction) without Palestinians of water rights, us. There is a growing clarifying what they mean. bulldozing olive orchards, number of older Jews who Some mean the boycott demolishing Palestinian are sickened by Israeli of everything Israeli, homes, using the separa- government policies, as we including Israeli artists, tion wall to steal productive all should be. I look forward musicians and professors farmland. Even within Israel to the day when Canadian working actively for a just proper, Palestinian Israelis politicians break through Progressive news, views and ideas and peaceful arrangement are unequal under the law. the logjam and realize that between the two nations. Fundamentalist criticism of Israel is NOT Others mean the boycott Christians love Israel out antisemitic. I encourage of goods produced in of a belief that once all of all of us as progressive Palestine by Israeli-owned us Jews move to Israel, the Canadians, Jews and companies. I subscribe to end of times will happen, non-Jews, to speak truth on

CANADIAN CENTRE FOR POLICY ALTERNATIVES SEPTEMBER/OCTOBER 2019 the latter, even knowing they’ll be swept to heaven, this issue. that Jews working for we’ll be sent to hell. Justice, Thank you for the bar Look before fairness for Palestinians are I guess, for being ever graphs in Clare Mian’s you leap named “self-hating Jews.” so stiff-necked. I’d call article. They quickly Many Jews who support this antisemitic. Far right illustrate what I’ve taken Re: A Green New Deal for that fairness are silenced politicians and even mod- too many words here Canada: Avi Lewis’s five by other Jews as traitors. erate ones tend to support to describe. Just so you reasons why a global, It’s not pretty. Can support fundamentalist Christians know, I use the word “Jews” youth-led call for radical for BDS shade into anti- out of political cynicism rather than “Jewish people” systemic change should semitism? Yes, of course. (conservative Jews tend because there is no other stir our revolutionary souls, But many progressive to be wealthy donors) and word to describe what September/October 2019. people supported a cowardice. Even progres- I am. We Jews have to boycott in South Africa sive Canadian politicians reclaim the word “Jew” and I am all for a radical shift as a way to starve the are afraid to speak out encourage everyone to take in the paradigm that is apartheid government and against the terrible abuses courage and speak it. causing people and the they weren’t demonized. of the occupation for fear Dorothy Field, planet so much distress. Criticism of the Israeli of alienating the “Jewish” Victoria, BC But as a mother, grand- government’s policies is vote, as if there is only one mother, and daughter of a no more antisemitic than “Jewish” vote. survivor of real and deadly criticism of Trudeau or In Canada, we have revolution, my soul wants a Scheer is anti-Canadian. approximately 638,000 better path. I want policies We tend to conflate Jews, a drop in Canada’s like a progressive basic Israel with worldwide Jewry bucket. That number income that reduces ine- but this is questionable. includes religious, secular, quality and provides dignity, There are 14 million Jews right-wing and left-wing stability and resilience to worldwide, 6,500,000 in Jews. Some of us work to everyone, right now, so we Israel—less than half the counter the arguments are all better equipped to total diasporic population. of the Centre for Israel deal with the rest of our Many of us would very and Jewish Affairs and problems. Martin Luther much not want to live in B’nai Brith that Canadian King Jr. thought so too, and Israel. A certain percentage governments adopt as a his soul calls to me. of Israeli Jews are leaving way to support us Jews. Israel because they can’t Others pressure our Sheila Regehr, Send all letters to monitor@ stomach government politicians to counter the Chair of the Basic Income policyalternatives.ca. We policies and don’t want extreme right’s line. It tends will contact you if we plan Network, Toronto, ON their kids in the army. to be rather thankless. on running your letter. 3 imbalances in Canada’s 2017–18 school year with security at risk for no bilateral trade with Europe, estimates for 2019–20. “This good reason. A new study and the composition of is a straightforward way by CCPA economist imports and exports. It of finding out how much David MacDonald and then attempts an early funding school boards will Canadian Labour Congress assessment of how public receive this year, in total, economist Chris Roberts, procurement “liberali- and per student, in com- titled First Served, finds zation” under CETA has parison to how much they that Canada’s largest affected public contracts, received two years ago, publicly traded companies New from noting that a recent Via the last complete school could have eliminated the CCPA Rail contract could not year before the current these pension deficits five favour Canadian-made provincial government times over with the value Bombardier trains over a came to power,” he wrote of what they chose to pay bid from Siemens due to on the Behind the Numbers shareholders in 2017. Taking stock new restrictions on “buy blog. “Year after year, compa- of CETA local” policies. Tranjan found that nies are bringing in excess Finally, the report briefly all school boards are income, and year after The Comprehensive examines CETA’s impacts experiencing cuts in total year they decide to pay Economic and Trade on access to affordable operating funding or per that out to shareholders Agreement (CETA) between medicines within Canada, pupil funding. For the instead of settling their Canada and the EU was the agreement’s potential 2019-20 school year, the pension obligations,” says provisionally implemented impacts on public services, Ontario government is Macdonald. “Shareholders on September 21, 2017, but and the implications of the transferring $430 million are supposed to take on won’t come fully into force regulatory co-operation less (adjusted for inflation) the firm’s risk. Instead, that until all European member processes instituted within to school boards than risk is being shouldered by states choose to ratify CETA’s more than a dozen the amount transferred workers whose retirement the deal. A new report by bilateral working groups. in 2017-18. “That’s a (real) security is compromised CCPA trade researcher 2% cut in total operating by outstanding pension Scott Sinclair andMonitor funding,” he wrote. “The deficits.” editor Stuart Trew, written Mapping the cuts percentage change in Canada’s pension rules for Friedrich-Ebert-Stiftung to education in Ontario total funding for individual leave it to companies to (U.S. and Canada), assesses school boards ranges from decide whether to fully some of the agreement’s In September, to find out -6% to +5%.... Sixteen of the eliminate their pension key early impacts on what was really happening 72 school boards have an deficit, as long as there Canada. to school funding in increase in total operating is a minimal level of The report examines the province of Ontario, funding, but all 16 have cuts funding. “It’s time for a changes in bilateral CCPA senior researcher in per student funding. In new policy approach that trade patterns (including Ricardo Tranjan compared other words, the increase considers firms’ financial exports from small and operating allocations (prior was smaller than what strength rather than only medium-sized companies), to capital adjustments) was necessary to make focusing on the health of continuing quantitative for school boards from the up for enrolment growth: their pension plans,” says they have less money per Roberts. student overall.” “But enhancing public CANADA-EU TRADE BALANCE (billions of Canadian dollars) You can find Tranjan’s options for retirement Source: Statistics Canada interactive map showing security in the Canada $8 total funding changes for Pension Plan, old age se- Total imports (EU) Ontario school boards curity and the Guaranteed $6 across the province at Income Supplement is still Total exports (EU) behindthenumbers.ca. the simplest and most com- $4 prehensive way to ensure a comfortable retirement for $2 Playing with all Canadians.” $0 pensions

$-2 Trade balance (EU) Some of Canada’s biggest companies with deficits For more reports, opinion, $-4 in their defined benefit infographics and podcasts Sept Dec Feb Dec Sept Dec Feb pension plans are putting from the CCPA, visit www. 2017 2017 2018 2017 2018 2017 2019 their employees’ retirement policyalternatives.ca. 4 IF YOU HAVE relatives, friends or co-workers who share your social, economic, political or environmental views but who aren’t supporting the CCPA, consider making a gift in their honour this holiday season. In addition to receiving The CCPA Monitor they will be introduced to all of the other studies, reports, commentaries and publications produced by the CCPA. Fill out this form and return it by mail or call Jason at 613-563-1341 x312. Please complete your order before December 15 to ensure the recipients receive an acknowledgment before December 25.

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5 Europe and Asia. From the Russian Far East, LNG tankers ply to Asia. Russia is the world’s largest gas ex- porter, mostly by pipeline. And Europe is a vital energy market for Russia. The European Union imports 70% of its gas; Russia is the biggest source, then Norway and Algeria. U.S. gas is more Up Front expensive than other sources. Perhaps that is why, as the Harper government tried with “ethical oil,” the U.S. is appeal- ing to ideology. Europe has been using Russian gas since the 1960s, and in a real way, JOHN FOSTER | INTERNATIONAL east-west pipelines helped build trust. Washington has consistently opposed Russian gas to Europe. Its envoys have The geopolitics visited Bulgaria, Greece and Germany repeatedly to vigorously discourage of Trump’s “Freedom Gas” new pipelines from Russia. The Europe- ans excluded natural gas from Russian sanctions in 2014: they wanted Russian hen Washington dubbed shipping freedom and opportunity gas to keep flowing. Undaunted, the U.S. American gas exports “Free- abroad.” continues its efforts to curb European Wdom Gas” this year, it signalled Canada is looking to increase gas use of Russian gas, claiming the issue a new salvo in U.S. competition with exports too. In northeast B.C., compa- is energy security. Russia. The target behind the branding nies are fracking for gas with plans to Traditionally, Russian gas flowed is Europe, the largest gas market outside export it to Asia. And just this summer, to Europe through pipelines through North America. With a bonanza of gas Pieridae Energy announced its hope Ukraine. In recent years, Ukraine’s from fracking, the U.S. aims to become to pipe Alberta gas to a proposed LNG payment problems, corruption, and the world’s largest gas exporter by 2024. terminal in Goldboro, Nova Scotia, for hostility to Russia have threatened It will need markets for this production. eventual export to Germany. gas exports. For Russia, the European Natural gas moves around the world U.S. LNG—and the Canadian stuff— market is vital to government revenues by pipeline and tanker. This year, the will face stiff competition from Russia, and exchange earnings. In a quest for U.S. became the world’s third largest which already has two LNG plants up more reliable routes, Russia seeks new exporter of liquefied natural gas (LNG) and running and is planning two more. pipelines bypassing Ukraine to the as four new liquefaction plants came Foreign partners include Total, Shell and north and south. online. President Trump exulted, “we’re ExxonMobil. From the Russian Arctic, To the north, Russia built Nord ice-breaking tankers move LNG to Stream with European partners—a di- rect route to Germany under the Baltic Sea. Now a parallel line, Nord Stream 2, is three-quarters built. The project is highly divisive. Central Europe wants it, welcoming a diversity of supply routes. Eastern Europe opposes it, fearing loss of transit fees from existing routes. Poland increasingly prefers “Freedom Gas,” i.e., American LNG. The U.S. is going all out to kill Nord Stream 2, threatening sanctions on European participants. To the south, Russia is building TurkStream, two parallel lines under the Black Sea to Turkey. One will bring gas to the Turkish market; the other is intended for Europe via Greece or Bul- garia. European Commission approval of new connecting pipelines is by no means certain. Working hand-in-hand, 6 SOURCE: GAZPROM Broadly speaking, JESSE HAJER | MANITOBA Canada supports U.S. foreign policy in Europe, Austerity, with Canadian troops round two stationed in Latvia and Ukraine and our anitoba’s Progressive Conservatives, led by Premier sanctions on Russia. Brian Pallister, won the provincial election on Septem- Mber 10, albeit with a slightly smaller majority than they had going into the campaign. We can expect the government Brussels and Washington favour rival sources: 1) gas to continue on its path of “fiscal responsibility,” i.e., budget cuts from the United States; 2) gas by new pipeline from and austerity. Azerbaijan; and 3) offshore gas from Cyprus and Of specific concern to the Pallister government has been Israel. All are more expensive than Russian gas. It’s bringing down the deficit, which was approaching $1 billion a question of politics, not economics. when the government first assumed office in 2016. The gov- Ignored is gas from Iran, a country with the world’s ernment has applied a variety of austerity measures to achieve second largest reserves of the stuff. Iran produces gas this objective, including: for its own use and for neighbours Iraq and Turkey. For repeated, across-the-board budget and staffing reductions many years, the U.S. has blocked Iran’s plans for other • in departments, Crown corporations and agencies; pipelines, including one to its neighbour Pakistan. The Iranian section is built. The Pakistani section • a legislated wage freeze leading to real wage reductions for languishes despite desperate gas shortages. The public sector workers; U.S. has threatened sanctions if Pakistan goes ahead. the contracting out and privatization of government services; Instead, Washington continues to promote a rival • pipeline planned from Turkmenistan to Pakistan and • the sale of government assets, including social housing stock India, passing through Afghanistan. Twelve years ago, for low-income Manitobans; U.S. ambassador Richard Boucher asserted, “One of cuts to social service benefits, including the Rent Assist our goals is to stabilize Afghanistan,” to link South and • program and employment and oncome assistance; and Central Asia “so that energy can flow to the south.” Four years later, in 2011, then Secretary of State • reductions in health care coverage—including outpatient Hillary Clinton offered more support for the proposed physiotherapy and occupational therapy—along with the pipeline. Turkmenistan, on Afghanistan’s northern introduction of prescription co-payment fees for people with border, has the world’s fourth largest reserves. It used long-term health conditions. to export gas to Russia. Now it exports big-time to China via pipelines built peacefully since the Afghan Through these measures and others, the deficit was reduced by War began. $144 million during the government’s first year in office (to $764 Natural gas is part of the power politics among million), and by another $94 million in year two. Estimates for countries. The term “Freedom Gas” shows the rivalry 2018-19 show the deficit was reduced by a further $225 million. extends beyond market competition. It’s part of a U.S. In the 2019-20 budget, the government managed to both cut geopolitical game to weaken America’s nemesis Rus- the PST by 1%—at a projected cost of $237 million a year—and sia and control Europe through its energy sources. reduce the deficit by a further $110 million. It is confident it can Broadly speaking, Canada supports U.S. foreign eliminate the deficit two years ahead of schedule even after a policy in Europe, with Canadian troops stationed planned elimination of the education property tax (at a cost of in Latvia and Ukraine and our sanctions on Russia. $830 million over a decade). Unwittingly or strategically, Canada is a player too. The consequences for the province of balancing the budget JOHN FOSTER IS AUTHOR OF OIL AND WORLD POLITICS: THE REAL on this timeline, while also reducing taxes, is ongoing austerity. STORY OF TODAY’S CONFLICT ZONES (LORIMER BOOKS, 2018). Premier Pallister made this explicit during the election cam- paign, noting that these revenue losses will be accommodated by further spending cuts, staffing reductions and asset sales. Evidence of widespread harm from his government’s cuts do WORTH REPEATING not seem to matter. Health care professionals, including doctors and nurses, are pointing to significant disruptions and staffing shortages “Ahh. They all do blackface. I will make in hospitals and emergency rooms. Teachers are rallying a note in the file.” against flatlining funding to schools and an education review Roxanne Gay on Twitter (@rgay), September 18 that is expected to result in similar upheaval in Manitoba’s K-12 school system. Anti-poverty advocates have also highlighted 7 US$204 billion the regressive nature of many of the service and tax cuts. Gross volume from customers Lower-income Manitobans are far more acutely impacted of the global “gig economy” in by these service reductions while the bulk of tax cuts benefit 2018. primarily higher-income earners. A recent poll also suggests that Manitobans aren’t par- 58% ticularly supportive of a rushed defeat of the deficit, with Portion of this amount the majority preferring incremental spending on services. So, coming from ride-sharing and what is driving this agenda of austerity and tax cuts? And is it delivery apps such as Uber, Lyft, necessary? Let’s look at that second question first. Index DoorDash, etc. Manitoba’s previous 8% sales tax was already on the lower Feel like sharing? end of the provincial spectrum, creating a relatively low $465 personal tax burden, according to the Conference Board of What an average “gig” worker Canada. And despite a significant increase in provincial debt Compiled by earns in Canada for about 43 since the 2008-09 economic crisis, the province’s debt-to- Elfreda Tetteh hours of work. GDP ratio in 2017-18 was still in the bottom half of Canadian provinces. In other words, the province could not be said to In September, California $762 have been in a debt or tax crisis when the Pallister government passed a law requiring “sharing Average monthly income of started to cut. economy” businesses to a transportation or package Nor is business all that concerned. A majority of respondents classify their workers as delivery worker (e.g., Uber to a 2018 Manitoba Chambers of Commerce survey agreed employees. In Europe, Uber and and Lyft), a 50% drop from that the province is a competitive place to do business relative Lyft are currently challenging 2012 when it was $1,535, likely to other provinces. These businesses also ranked hiring and an EU ruling that determined because of far fewer hours retaining skilled and qualified workers, and concerns with they must comply with strict worked. overall demand for their products, well ahead of taxes and European transportation 33–38% government spending as their priorities. Both these areas laws in order to continue Estimated cut of driver earnings will in fact only be further constrained by austerity. operating in the region. The kept by Uber and Lyft. The sad reality is that ideology, not evidence, appears to be popular ride-sharing apps driving the government’s deficit-slashing agenda. While some remain banned in Denmark 68% conservative economists continue to promote “expansionary and Bulgaria, and are partially Number of Uber drives who austerity”—the idea you can generate economic growth banned in Germany, Turkey quit within the first six months, through business confidence–inducing cuts to social servic- and Spain. China, Thailand and usually after seeing how little es—the policy does not hold up empirically. The detrimental Hungary have also barred them they’re earning. socioeconomic consequences of austerity, on the other hand, but allow other ride-sharing are increasingly well-known and include poor childhood companies to operate. The 3.5% outcomes, compromised health and education, reduced life drivers offering these services, Estimated portion of the expectancy and growing and increasingly racialized inequality. often for poverty-level incomes, Canadian workforce in the “gig” While austerity advocates focus on the cost of government have faced countless threats economy, or roughly 700,000 debt, they regularly neglect the social and long-term econom- against unionizing. However, full-time equivalent jobs. ic benefits generated from government investments in people unofficial ride-share drivers’ and communities. Many publicly funded social interventions unions currently exist in 30% in areas such as public health and prevention, education and California. In Toronto, hundreds Number of households in anti-recidivism have been rigorously tested and proven to of Uber drivers voted to Canada that have participated generate the intended social benefits. In many cases the unionize earlier in 2019, while in some form of “gig” work. fiscal savings generated are sufficient for these programs to Foodora couriers are currently Zero effectively pay for themselves. fighting to join the Canadian Canadian cities that have not In this summer’s provincial election, alternatives to Union of Postal Workers. already approved Uber and Lyft austerity were put forward by all opposition parties. The operations. Vancouver became CCPA-Manitoba is also in the midst of the 2020 Alternative the last major city in Canada to Provincial Budget consultative process, collecting ideas for grant approval to the ride-hail- focussing the government’s attention on the pressing issues of ing firms earlier this year. climate change, growing inequality, and quality public services that meet the needs of Manitobans. While these issues will almost certainly be pushed to the margins in the Pallister government’s second term, public opinion research and the Sources Mastercard Gig Economy Industry Outlook, May 2019; “The Size and Characteristics of Informal (‘Gig’) Work in Canada,” Olena Kostyshyna and Corinne Luu, Bank of Canada; “Why the gig economy may not be the workforce of the fu- government’s reduced majority suggest they are appealing ture,” Benefits Canada, September 2018; “Uber And Lyft Take A Lot More From Drivers Than They Say,” Jalopnik, August to a growing number of people in the province. 2019; “Uber and the labor market,” Economic Policy Institute, May 2018; “Gig economy workers…often don’t realize how much it costs them,” Toronto Star, November 2018; “The Gig Economy’s Missing Data,” Ronald Orol, Centre for Internation- JESSE HAJER IS A FACULTY MEMBER IN THE DEPARTMENT OF ECONOMICS AND al Governance Innovation, July 2019; Rideshare Drivers United; “300 GTA Uber Black drivers unionize as city mulls regulato- LABOUR STUDIES AT THE UNIVERSITY OF MANITOBA, AND A RESEARCH ASSOCIATE ry overhaul,” CBC News, June 2019; “Battle between Foodora and couriers could define ‘how we do work in this century,’” WITH THE CCPA-MANITOBA. CBC News, September 2019; “How the world is going to war with Uber,” The Telegraph (U.K.), June 2018. 8 Perspectives

MELANIE ALLISON My wild, re-wilding summer

HE NEWS OF clearcutting, global ensure survival. Especially in the case warming and forest fires, whether of monkeys, many of whom are gifted in Western Canada, Southeast Asia or sold to households where they must Tor the Amazon, leaves me feeling adapt to a very unnatural, confusing overwhelmed and powerless. I know environment, rehabilitated individu- I’m far from alone when I say that. But als will eventually need to integrate the need to do something meaningful into a new group, which must function and “of service” to the Earth was es- as a cohesive unit. pecially strong for me this summer. So many variables come into play. So I decided to spend my vacation The process of getting it all aligned to volunteering with an amazing NGO release an animal or a group of animals in Ecuador. can take years of hard, dedicated work. Merazonia is a dynamic wildlife res- Merazonia currently has five staff cue and rehabilitation centre located members who work tirelessly to keep on 250 acres of Amazon rainforest everything running. They would not near Mera in central Ecuador. Founded be able to do it all without volunteers. by Frank Weijand, a former journalist I met the most incredible people and from the Netherlands, the centre puts had so much fun living in the jungle a strong focus on actual rehabilitation with a group of like-minded individu- of wildlife so that rescued animals can als of all ages, from all over the world, eventually be returned to their natural all working together for a common environment. goal. Although the personal reasons During the month I spent volunteer- for being there were unique to each of ing at Merazonia there were capuchin, us, everyone shared a love of animals red howler, woolly and tamarin mon- and nature and a desire to contribute keys, as well as parrots, macaws and to a greater good. other birds, a kinkajou, a puma, an The gate to Merazonia Merazonia is just one of many organ- otter, a sloth, a baby anteater, a turtle, and current resident Chili. izations out there doing exceptional a rainbow boa, coatis and at least two AUTHOR’S PHOTOS work with limited resources. For exam- other species that I’ve forgotten the ple, I also volunteered with La Tortuga names of. All of them are cared for Feliz in Costa Rica in 2009. Some travel on the property or as part of ongoing cuddle and take selfies. As release is companies pitch very expensive “vol- monitoring after release. Merazonia the main objective, we don’t want the unteer do-good” vacation experiences, provides the animals a refuge, safety animals to get used to human contact. but I found these two opportunities at and rehabilitation, medical attention Unfortunately, some animals are too www.volunteersouthamerica.net. when needed (Weijand’s wife, Louisa traumatized to go back to their home, Dealing directly with the organiza- Baillie, is the on-site veterinarian) and in which case they are given perma- tion may take a bit more time or trust the possibility of making it back to the nent residency in the most supportive initially than the relative “security” of jungle where they were born, wild and and natural environment possible. dealing with a large travel company. free. A lot goes into rehabilitating a wild But the low-cost contribution for your Other than the baby monkeys, who animal that has been removed from food and lodging during your stay need one-on-one care for the first few its habitat and community, usually makes it more affordable, and your years of their life, Merazonia is strictly under force or violence. To fully recov- payment contributes directly to the hands-off. While cleaning and caring er, these physically and emotionally survival of these organizations. For me, for the cages or the animals, volun- traumatized animals need to regain the experience is, well, priceless. M teers stay as quiet and least disruptive their spirit and independence, and MELANIE ALLISON HAS BEEN THE CCPA-NATIONAL’S as possible. This isn’t the place to exhibit the proper behavior needed to ACCOUNTING OFFICER SINCE 2002. 9 Interview

How to do everything differently

Bruce Campbell, former director of you canned that you could keep librar- the CCPA, interviews his friend and ies open. The goal was to embarrass colleague John Loxley, heterodox the politicians about their choices. I economist, long-time CCPA research thought we could build on that when associate and co-ordinator of the first austerity became common, to show Alternative Federal Budget. John’s people that it was unnecessary, and work and globe-spanning career were we could do alternatives and do them honoured by the CCPA-Manitoba at an right across the board. Errol Black Chair Fundraising Brunch The Manitoba government has em- on November 3. braced a new round of austerity. How are you and other groups responding? Bruce: How did a working class kid We have to keep on top of what the from the north of England end up as a government is doing. They’ve been university professor, activist and pub- quite stealthily cutting left, right and lic intellectual in Canada’s hinterland? centre and CCPA’s been one of the John: I was born in Sheffield, England, groups that’s shone a light on that. one of 12 kids. My dad was a steelworker We work with Make Poverty History who contracted the equivalent of black and Right to Housing, and other local And you say this is where you got lung disease… Fortunately, we had a groups who’ve been very active, and the idea for the Alternative Budget very progressive Labour government we try to integrate their work and process? at the city level. We lived in a council consolidate their work. In a sense it’s house, I had free education, we had There was an advisor to Prime Minis- defensive work at this stage, because great health care, we had food supple- ter Nyerere, Reg Green, an American we’re trying to keep social programs ments when we were children, school leftie, very eccentric, very bright. We in place, and it’s a struggle for public milk, etc. That had a big impact on me, were in a meeting together and peo- opinion. But I think that some of the on my career possibilities and on my ple were late showing up. Reg had a things the CCPA has worked on with political viewpoint. foolscap sheet of paper on his knee these other groups have had an impact. and he just kept filling page after page From England, and university stud- What big challenges do you see for with numbers. Nothing else there, ies, you ended up in Tanzania for a Manitoba, for Canada? Where do you just a sheet of paper and his mind. So time before moving to Manitoba to have hope? I asked, “Reg, what are you doing?” And join the Schreyer government… he said, “Oh, I’m just doing the budget” The biggest problem I think we face Tanzania nationalized its banking (laughs). And he was putting together in Canada is taking away Indigenous system and I was invited to come the detailed numbers of the Tanzanian children from their families. It’s got to down as their chief economist of the budget, department by department, stop. And it’s not going to stop by just nationalized bank, which I then did from his head. And then it suddenly saying it should stop. There have to be and spent some years there. I moved occurred to me: normally as an econ- supports in place to allow families to from the bank to the University of Dar omist you read the published budget take care of their children and build es Salaam and then back downtown to but don’t think too much about where up prevention activities. For years set up an Institute of Finance Manage- it came from. Someone has to put it and years child welfare agencies only ment. There were a lot of Canadians together. Why not us? received funding if they took children there who I got on very well with. We had a tradition in Winnipeg, long into care; it was outrageous! Now, due People like Lars Osberg, George Davies, before I got there, of commenting on to the efforts of the AFN and such Gerry Helleiner, even Ed Clarke, who budgets. The City would be trying to strong and committed people as Cindy became a TD Bank president. It was close libraries down, and this group I Blackstock, federal money is being they who arranged for me to move to was working with would pick a ridicu- made available for prevention. It was Manitoba in 1975 and I’ve been there lous budget item, like entertainment in nice to have a bit role working along- ever since. the mayor’s office, and showed that if side them in this development. M 10 policy requiring police to collect, analyze and publicly re- Colour-coded port data showing the racial breakdown of the individuals Justice they interact with while on duty. The board’s Anti-Racism ANTHONY N. MORGAN Advisory Panel (ARAP), co-chaired by Black Canadian community health expert Notisha Massaquoi and Sri Lankan–born mental health expert Uppala Chandrasekera, developed the policy and led its public consultations. The adoption of this policy is an especially monumental development given the global rise of the Black Lives Matter (BLM) movement was in large part driven by a lack of state The Great Canadian accountability for anti-Black racism in policing. Canada consistently markets our multiculturalism while police Blackface Debate and correctional services refuse to democratically collect and release data that would expose the dramatic rates of overrepresentation of Black people among those stopped, Y PATERNAL GRANDMOTHER has a great saying that she questioned, carded, charged, arrested, incarcerated and likes to remind me of. Drawing from a well of old even killed by Canadian police officers and in Canada’s Jamaican wisdom, she says: “Don’t watch the noise prisons. in the market, just watch your correct change.” The Toronto police board’s race-based data-collection On September 18, Time magazine released a photo policy was a result of a decades-long push from Toronto’s Mshowing Prime Minister Justin Trudeau in blackface at a Black communities and their allies for greater police fair- costume party in 2001. Similar photos and a video surfaced ness, transparency and accountability. Because Toronto’s in the days that followed, suggesting the blackface routine police service is the largest in the country, it is almost cer- is, or at least was, a habit for Trudeau. Every few days since tain that police agencies across Canada will adopt similar then, Canadian news media have featured new articles, vid- disaggregated data collection policies. eos, commentary or panel discussions on this controversy. There is still confusion about the policy, with people With all due respect to the commentators that have wondering if it gives the police legal protection to continue kept #blackfacegate going, I can’t help but feel the media the extremely controversial and anti-Black racist practice is allowing this conversation to drown out other significant of carding, also known as street checks, which government stories that directly impact the material conditions of Black legislation was ostensibly meant to end as of 2017. Carding Canadians. But if #BlackfaceTrudeau is the noise in the allowed police to stop, question and document individuals market, what’s the correct change? I have a few examples. without having a legal basis for doing so. On September 18, two Black female high school students The new Toronto police board policy, however, focuses who left their Vancouver school due to anti-Black racism only on collecting data when police are exercising their finally received an apology from a white male classmate legal policing duties. More media attention on this, rather who was the source of the trouble. The white student than the blackface incidents, might have cleared these circulated a video to his classmates in which he said, “I issues up. hope all n------die.” The next day, the Toronto Star reported Finally, in a related story on September 20, the Ontario that the TTC had agreed to adopt an anti-racism plan as Human Rights Commission released its official policy on part of a settlement with a Black rider who sued the transit eliminating racial profiling in law enforcement. This policy commission after he was violently accosted by three fare was years in the making and will likely serve to guide police inspectors in 2018. These stories offered insight into the services across Canada for at least a generation to come. shortcomings of how Canadian public institutions address Was it news? Not for more than a day. anti-Black racism. It is possible these important developments would have That same week, but on the other side of the country, the received just as little media attention had the Trudeau leaks Nova Scotia government released a detailed, 20-plus page not happened at the same time. And clearly, talking about action plan to support the United Nations International Trudeau’s habit is a part of how we address anti-Black Decade for People of African Descent. This is significant racism in this country. because the African Nova Scotian community has for But the hard work of making our police forces account- centuries been pushing the province to help its members able is important too—it’s the correct change amidst the achieve better social well-being outcomes in education, noise of the market. This is a serious concern because the employment, youth development, health, housing, polic- noise of the blackface bruhaha will likely be forgotten long ing and the justice system. The government plan offers before Ontario’s police accountability changes are most a positive example for how other provinces can address deeply felt by Black communities. systemic anti-Black racism in line with the UN project. Grandma, help us. M But it’s in Ontario where the blackface media eclipse had ANTHONY N. MORGAN IS A TORONTO-BASED HUMAN RIGHTS LAWYER, POLICY the most significant effect. CONSULTANT AND COMMUNITY EDUCATOR. FOLLOW HIM ON TWITTER @ On the same day that the first Trudeau photo surfaced, ANTHONYNMORGAN. the Toronto Police Services Board passed a groundbreaking 11

001

TOBY SANGER Time to step up for tax justice Important international reforms to end tax-dodging and tax havens are on the horizon. Why isn’t Canada doing more?

hen we think about tax havens the picture for resident banks to lend and shelter money and wealth we see is usually of a small tropical island, from all sides. The rise of income and wealth taxes in its palm-lined colonial streets swarming Western countries, originally to pay for these wars, made with slick, shady lawyers and financiers it even more attractive for the elite to hide their wealth who,W for a fee, will happily hide money from spouses, in Switzerland. creditors and the taxman. It’s an image that pervades our Ordinary people were patriotically conscripted to fight popular culture and one that Steven Soderbergh exploits and pay for Europe’s wars, but many of its wealthy, as al- to the max in his campy new film about the Panama Papers ways, found ways to elude both. They also weren’t prepared leak, The Laundromat. to let Swiss bankers take all the proceeds from the highly Certainly, the fact that many Caribbean and other profitable business they had pioneered. City of London tropical islands in the Indian and Pacific oceans are tax financiers developed their own web of offshore tax havens havens—or better yet,paradis fiscauxin French—lends through the Channel Islands of Jersey and Guernsey and credence to this idea. But the reality is more complex and the Isle of Man, Crown dependencies that are not part of much closer to home than that. Tax havens come in all the United Kingdom. shapes and sizes, with webs that extend all around the During the 1930s, wealthy Americans and mobsters, world, entangling Canada’s financial, mining, and real including Meyer Lansky, used Switzerland, and islands estate markets, as examined later in this special issue of closer to home including Newfoundland and Cuba, to both the Monitor. launder and hide their money from their governments. After a short history of tax havens, including the key This helped them avoid the fate of Al Capone, who was role Canadian banks and individuals have played in their famously convicted of tax evasion rather than the more establishment, this article explores how they have become violent crimes he was associated with. The Cuban revo- a key part of the international corporate financial archi- lution forced Lansky to move to the British colony of the tecture, benefiting especially the wealthiest individuals Bahamas, which he helped develop into a more stable place and corporations in the world while harming the poorest. to launder money and evade taxes. It then looks at how we can achieve positive changes, in- Canadian banks and citizens were also intimately in- cluding through urgent measures the federal government volved in the project to turn Caribbean countries including could take to hold tax-dodgers to account and repatriate the Bahamas, Bermuda and the Cayman Islands into tax billions that could be put to better use serving public ends. havens, as Alain Deneault documents so well in his book, Canada: A New Tax Haven. While these countries sported A very short history of tax havens some political quasi-independence (though not so much to Switzerland was the first country to develop into a signif- lose their cachet of stability under the British Crown), they icant tax haven. Wealthy Europeans with money to hide increasingly became colonies of financial capital—a place were especially attracted by the historic financial secrecy for wealthy individuals and corporations from Western laws of Swiss bankers, the country’s tradition of neutrality countries to hide their money and avoid taxes. in wars, and a decentralized federal structure under which cantons (small self-governing regions) compete with each Part of the financial architecture other for business. It’s important to understand that most tax havens didn’t Switzerland’s cantons flourished as international develop on the margins of the financial centres of London, banking centres throughout the 18th and 19th centuries, Toronto and New York, but as key parts of their respective but they did especially well during Europe’s devastating international empires. They functioned similar to private wars in the 20th century. Swiss neutrality made it possible clubs, with exclusive perks for the wealthy members, ILLUSTRATION MICHAEL HADDAD 13 notably the power to avoid taxes and engaged in mutual games of cutting are generally always only available for other obligations in their country, but corporate tax rates and making their foreign firms, having multinationals without ever having to leave home. regulations ever more friendly to straddle many jurisdictions makes it The government made moving funds foreign businesses, which were often easier for them to avoid taxes in all back and forth even easier for these offered better treatment than domes- of them. For instance, at a time when people by signing tax agreements and tic firms. The creation of a European it was the most valuable company in treaties with other known tax havens, single market in the early 1990s and of the world, Apple was able to transfer and making it simple to establish shell stateless eurodollar markets provided much of its wealth to subsidiaries that corporations, trusts and foundations far more possibilities to help multi- were not considered resident for tax for the purpose of sheltering money. national enterprises avoid taxes. So purposes anywhere in the world, and Tax havens couldn’t exist without did the development of the modern to pay an effective tax rate of just the very active facilitation and promo- corporate tax havens of Ireland, the 0.005%. tion of blue chip financial institutions Netherlands and Luxembourg. The including banks and accounting, legal information technology revolution Tax me if you can and other firms. Very few wealthy and digitalization of the economy has The expansion of tax havens has individuals or corporations would taken tax avoidance to yet another also helped drive down corporate tax take these risks without assurance dimension. rates around the world, as countries that their assets would be safe and A whole universe of tax havens feel pressure to offer “competitive” accessible, often only by them. Giant and low-tax jurisdictions now exists. business environments. Canada’s accounting firms including KPMG, Constellations of different tax havens federal corporate tax rate has been EY, Deloitte and others are among the service different major economies, the slashed in half over the past two greatest promoters and facilitators of sources of their funds and strength of decades and other business taxes by aggressive tax avoidance and use of their links determined by different tax more. But as in other countries, this tax havens. agreements between jurisdictions, race to the bottom on taxes in Canada Free trade agreements in the 1980s their institutions, the players involved, has produced no significant increase and ‘90s facilitated the globalization of and what each tax haven offers in in business investment. industrial and financial supply chains. terms of particular perks. Canada’s largest corporations have Tax havens provided multinational While wealthy individuals may also been big users of tax havens. The corporations straddling multiple just use one or two tax havens, cor- Canadians for Tax Fairness publication countries with highly attractive op- porations will establish subsidiaries Bay Street and Tax Havens reported portunities to reduce their tax bills. in a number of different ones, with that Canada’s 60 largest companies It was easy to shift profits to low tax each serving a separate purpose. The on the TSX60 Index had over 1,000 jurisdictions thanks to near centu- multiplicity of tax havens further subsidiaries and related companies ry-old transfer pricing rules and arm’s helps companies hide their assets in tax havens, with some having over length principles at the foundation of and hedge their bets, in case political 50 each. Over 90% of Canada’s largest international tax rules. and public sentiment in one country corporations had at least one subsid- The windfalls from international turns the other way. And because the iary in a tax haven. tax avoidance escalated as politicians preferences provided by tax havens Large multinational enterprises in more traditional industries such as mining, oil and gas, manufacturing, construction, transportation, finance, WHAT IS A TAX HAVEN? pharmaceutical and retail have been able to avoid taxes for many decades A tax haven is a jurisdiction with laws, regulations and other features using a variety of techniques. But the that make it easy for corporations and individuals to evade or avoid rapid expansion of corporations using paying taxes or meeting other obligations in other jurisdictions. A tax digital platforms—Google, Facebook, haven is a jurisdiction with: Amazon, Apple, Uber, AirBnB, etc.— has made international tax avoidance • no or low effective taxes, particularly so non-residents can escape even more pervasive. taxes and other regulations in their country of residence; These corporations have much of • ease of establishing corporations, trusts, foundations and other legal their assets in software platforms, entities with limited requirements; and patents, brand names, and other forms of intellectual property that they can • secrecy and a lack of transparency of who the actual owners of locate in different countries for the corporations, trusts and other assets are. purpose of dodging taxes. In so doing, Different organizations and countries have different lists of countries these mega-corporations have gained and jurisdictions that they consider to be tax havens. These lists will unfair advantages in comparison with change over time. smaller and medium-sized domestic competitors. International tax 14 Canadian corporate funds Race to the bottom reported in top 12 tax havens (billions) Combined corporate income ta rates Source: Statistics Canada, Table: 36-10-0008-01 by country group, in per cent $350 Source: IMF Fiscal Affairs Department Tax Policy Rates Database 46%

$300 High income 42% Middle income Low income $250 OECD Europe OECD Non-Europe 38%

$200

34% $150

30% $100

$50 26%

$0 22% 1988 1993 1998 2003 2008 2013 2018 1990 1994 1998 2002 2006 2010 2014 2018

dodging has contributed to disturbing levels of corporate if they were half the amount it would still be a massive concentration and control in many different sectors, which problem. has also reduced competition and is bad for the economy. The losses are even more damaging for lower income The chart on this page illustrates how rapidly Canadian countries. They lose over US$200 billion ($C265 billion) in corporations have increased their reported investments revenues annually from corporate profit- and tax-shifting in corporate Canada’s top 12 tax havens—up to over $350 through tax havens, equivalent to over 1.3% of their GDP billion in 2018, representing over 27% of their total reported and more than they receive in international development investment overseas. As these figures are just the officially assistance annually. These countries depend proportion- reported numbers, the real amounts that Canadian corpo- ally more on corporate taxes for their public revenues rations hold in tax havens are certainly higher. They are because their populations are poorer. They also have less also only national level findings and don’t include assets capacity to investigate, audit, battle and recover taxes in subnational tax havens such as Delaware, which is by from multinational corporations. The lack of revenue in far corporate Canada’s most popular overseas destination these countries to improve health care, public services and for establishing subsidiaries. education is literally a life-and-death problem. Recent analysis by the IMF revealed that “phantom This is why international development organizations investments” in empty shell corporations in tax havens such as Oxfam, Action Aid, Save the Children, Inter Pares have increased to an astonishing $15 trillion worldwide, and others have been at the forefront of tax justice move- representing 38% of all foreign direct investment overseas. ments around the world. They’ve seen that the primary IMF researchers have also recently estimated that OECD beneficiaries of tax havens and our archaic international countries lose an average of 1% of their GDP to this type of corporate tax rules have been the wealthiest individuals profit- and tax-shifting by large multinational corporations, and the largest multinational corporations, while it is the adding up to over US$400 billion (C$530 billion) annually. poorest who have been hurt the most. For Canada, 1% of GDP would be equivalent to over $20 It has taken decades of advocacy and fighting by small billion in revenues lost annually. That’s more than the tax justice organizations—including the Tax Justice federal deficit for this year, and an amount that could fund Network, the Global Alliance for Tax Justice, Canadians both free postsecondary tuition and a national pharmacare for Tax Fairness and Échec aux Paradis Fiscaux, labour plan. Canada’s losses are probably lower than this, but even unions and other supporters—to bring attention to the 15 Combined federal-provincial corporate tax rates and corporations associated with their U.K. users. France has business investment in machinery and equipment Source: OECD tax database and Statistics Canada Cansim table 380-0064 also committed to introducing a tax of 3% on the French 50% 8% revenues of digital giants like Facebook, Apple and Google. Meanwhile, the United States even introduced special an- Combined corporate ta rate (left) ti-avoidance taxes on multinational corporations as part Business investment/GDP (right) of a major tax reform bill in 2018. 40% All these different measures helped forced the interna- 6% tional community to take action or risk creating a highly balkanized, varied and unpredictable international corpo- 30% rate tax system. In just the past year, the OECD and IMF have agreed that significant reform is needed. As Christine 4% Lagarde, the head of the International Monetary Fund (IMF), recently stated: 20% The current international corporate tax architecture is fundamentally out of date [because] the ease with which 2% multinationals seem able to avoid tax, combined with 10% the three-decade long decline in corporate tax rates, undermines both tax revenue and faith in the fairness of the overall tax system…. The current situation is especially harmful to low-income countries, depriving 0% 0% them of much-needed revenue to help them achieve 1998 2002 2004 2008 2012 2016 higher economic growth, reduce poverty, and meet the 2030 Sustainable Development Goals. G20 and G7 leaders have agreed to try and achieve a con- magnitude and injustice of this problem. But international sensus solution by the end of 2020. It’s a very ambitious organizations like the OECD, IMF, G20 and national govern- target given how long the existing international corporate ments are finally paying attention and pledging to make tax system has been in place. The ideas on the table could substantial reforms. The International Consortium of represent the most significant changes to that system in Investigative Journalists (ICIJ) has also had a big impact a century. with the enormous amount of work their journalists have A majority of countries appear to agree there needs to be done analyzing millions of files from the Panama Papers, a minimum international effective corporate tax rate. But Paradise Papers and other leaks of information from tax there’s disagreement about what this should be, whether havens. it should apply to all or just “residual” profits, and many other technical but important factors. There also appears to Urgent reform needed be broad agreement that multinationals should be treated As a result of public pressure, national governments at as unitary enterprises instead of being able to shift their the 2012 G20 summit asked the OECD to draw up a base profits to affiliated companies with impunity. erosion and profit shifting (BEPS) action plan to help prevent multinational corporations from avoiding tax by shifting profits to tax havens and low-tax jurisdictions. The first BEPS action plan, launched in 2015, significantly included reforms to increase transparency about what HOW DO THEY DO IT? multinational corporations actually pay in tax, allow au- tomatic sharing of tax information, and plug a few holes COMMON WAYS MULTINATIONALS in tax treaties. But the OECD plan failed to fundamentally SHIFT THEIR PROFITS TO TAX HAVENS reform the international corporate tax system. 1. Transfer pricing: goods or services are As a result, a number of OECD member countries were exchanged between affiliated companies at lower pressured by the public to introduce their own specific or higher than market rates so profits are booked taxes on multinational corporations, often targeted at in low-tax jurisdictions with no or low profits in digital and e-commerce giants such as Google, Facebook, host countries. Apple, Amazon and others, which have been particularly patents or adept at avoiding taxes. 2. Intellectual property (IP) royalties: trademarks are owned by affiliated companies in a For instance, Australia introduced a multinational tax haven, with large royalties paid to the company. anti-avoidance law two years ago that allows the govern- ment to apply a more punitive 40% diverted profits tax 3. Intra-company loans: corporations pay large on multinationals that are deemed to have aggressively interest payments on loans to affiliated finance avoided taxes. Britain will start applying a digital services companies based in tax havens. tax in April 2020 that applies to the revenues of large digital 16 A number of Western nations are • Increase funding to the Canada Rev- pushing to keep the existing transfer MAJOR TAX enue Agency and prosecution service pricing system for the “routine profits” HAVEN LEAKS so that it can investigate and shut of multinational corporations, but to down sophisticated tax- avoidance introduce new additional taxes for the UBS leaks 2007 and evasion schemes. higher-than-routine “residual profits” Offshore leaks 2013 Restrict corporations or consorti- of larger, more profitable multination- • ums that engage in tax evasion and als. However, doing this would retain LuxLeaks 2014 aggressive international tax avoidance a broken and ineffective system that Swiss Leaks 2015 from obtaining federal government allows corporations to avoid taxes. It contracts. would also make the international tax Panama Papers 2016 system even more complicated and Change Canadian tax laws and Paradise Papers 2017 • open to dispute over what constitutes international tax rules to force inter- routine and residual profits. national corporations to pay their fair A proposal from India and the G24 share of tax by: group of nations—also supported by introducing a minimum interna- tax justice organizations including • tional corporate tax rate; the Tax Justice Network and the Ideally, these types of international Independent Commission for the negotiations should occur at the • treating multinational enter- Reform of International Corporate United Nations, but it doesn’t have prises as single entities for tax Taxation—would deliver the much the capacity in this area and has purposes so they can’t avoid taxes more substantial reform that is need- been made less functional by the U.S. through subsidiaries and affiliated ed. Under the proposal, multinational Trump administration and others in companies; enterprises would be required to pay recent years. apportioning the profits of mul- tax to the different countries they There’s still a chance the talks will • tinational corporations between operate in using a formula that ap- achieve historic positive reform. Un- countries based on real economic portions their profit according to the fortunately, the Canadian government factors, such as sales and employ- share of real economic factors in each hasn’t yet appeared to want to play ment, so they can’t avoid taxes by country, such as sales, employment any significant role in this respect. shifting profits to tax havens; and assets. Canada should strongly advocate for In Canada and the United States, international adoption of a formulary • strengthening rules to prevent corporations have been required to apportionment system similar to the other common forms of tax avoid- apportion their profit for tax purposes one we use successfully at home. ance and evasion; between provinces (or states) in this It would be a win for the Canadian ending double non-taxation way for over 50 years. If this type of government, with the billions more • agreements with tax havens, re- system was also in place internation- in revenue it would gain, a win for quiring corporations and wealthy ally, revenues from corporate taxes Canadian businesses who will face individuals to pay reasonable would be higher by an estimated $10 less unfair competition, and a win for minimum rates of tax; and billion or more per year. lower-income developing countries Much is at stake in these inter- whose capacity to invest in sustain- • requiring large multinational national tax reform discussions: able development would be greatly corporations to publish financial hundreds of billions of dollars in enhanced. reports, including taxes paid, on a revenues could be repatriated if they country-by-country basis. M get it right. It is very encouraging that The solutions the reforms long proposed by tax There’s no one silver bullet that will justice activists are now being very solve all the problems of international seriously considered by the OECD, tax-dodging and tax havens. Instead, IMF and national governments. But the federal government should take we should be under no illusions about stronger action in the following areas. the power of the corporate forces that Stronger enforcement and harsher will resist these progressive changes. • penalties to deter wealthy individuals One problem is that these dis- and corporations from engaging in cussions are being led by the OECD, international tax evasion, and others essentially a club of wealthy nations. from promoting the practice. Though other countries can have a seat at the table through its “inclu- • Prosecute the professional promot- sive framework” process, they aren’t ers of tax evasion schemes, including necessarily equal partners and have lawyers and accounting firms such as less capacity to analyze and engage. KPMG. 17 002

MICHAEL CUENCO Oh Canada, our home and native tax haven The world is shutting doors to money laundering. Why are Canada’s still wide open?

magine you’re a lawyer who ownership transparency?” You look between shell companies and making specializes in international back at your map and finally see it much more difficult for public -au taxation. You work at a prestig- what’s been there all along. How could thorities to detect wrongdoing of the ious firm whose clients include you have missed that huge landmass following varieties. theI world’s rich and powerful: Russian staring right back at you? Of course! oligarchs, Wall Street executives, Gulf Canada, a country with the nicest and Magnitsky Case state sheiks, some heads of state and cleanest of reputations, is somehow In May 2017, CBC News released the government, even a few famous rock still a relative laggard when it comes results of its months-long investigation stars. Your task is to find a suitable to the level of transparency expected into a possible Russian tax fraud and place to stash their wealth so as to of corporate entities registered there. money laundering ring. Suspicious “minimize liabilities.” An easy way to You call up your clients and announce funds were routed through approx- do it is to start shell companies, a trick you’ve found the perfect place to park imately 30 Canadian bank accounts, you’ve pulled off many times before. their evaded taxes and illicit wealth. and $17.6 million was discovered to You look at a map of the world “It’s off to the Great White North!” have been transferred from Canadian and start thinking. How about the companies to the accounts of Russian old favourites: the Cayman Islands, From Russia criminal syndicates. Some of these British Virgin Islands, Bermuda? No, with laundered funds Canadian companies undertook ques- too obvious. The United Kingdom has It might be troubling for many Cana- tionable business practices. (This was passed legislation requiring the dis- dians to learn that their country has the case the slain Russian tax lawyer closure of the real beneficial owners become a tax and laundering haven, and anti-corruption icon Sergei Mag- of corporate entities in its overseas but this is precisely what leaks like the nitsky was involved in exposing.) territories (see Erika Beauchesne in Panama Papers have revealed. Internal this issue), spelling the end of shell records of the offshore firm at the Panama Papers companies as we’ve known them. centre of the scandal, Mossack Fonseca, Since the release of the Panama Pa- Ireland, Luxembourg or the Nether- show employees pointing to Canada as pers in April 2016, nearly 900 Canadian lands, then? Sorry—like the U.K., the a particularly easy place to incorporate individuals and corporate entities European Union recently mandated shell companies while advertising the have been named as being involved that each member state must set up country as a “good place to create tax in Mossack Fonseca’s tax-dodging a public beneficial ownership registry. planning structures to minimize taxes.” operations. However, as the Monitor You start scratching your head as A large part of the reason for this is went to print, no one had yet been you realize this is becoming a trend, that Canada is tied for last place among prosecuted, and investigative efforts at least among wealthier countries, G20 partners with respect to fulfilling by law enforcement and the Canada many of which are beginning to catch the group’s commitments to advance Revenue Agency are still in process. on to the free pass given to all kinds beneficial ownership transparency. The ongoing Panama Papers probe, of financial wrongdoing. Looking back More recently, the EU has committed undertaken by the CRA in connection at the map, Mexico, Kenya and India to a publicly accessible database of with a reported $77 million offshore catch your eye as potential alterna- individuals who ultimately own, derive tax evasion scheme, resulted in search tive shell company hosts. Then you benefit from or exercise control over warrants on two Vancouver properties remember that these countries have a company or legal entity, whether or this March. According to the agency’s signed onto public beneficial owner- not these are the same as the formal press release, the scheme was an ship transparency as part of the 2016 legal owners. alleged attempt to evade non-resident London Anti-Corruption Summit! The gap between legal and beneficial withholding tax and was enabled by Close to giving up, you wonder aloud: ownership reporting allows for any connections between “domestic and “Is there a country left in the world number of intermediaries, nominee offshore entities,” as confirmed by that has all the privacy protections and directors and shareholders to obscure “various information sources, including the rule of law and good ease of doing who really owns the entity, creating records obtained through the Panama business, but that still lacks beneficial pathways for the circulation of wealth Papers leak.” 18 Money laundering in British Columbia capabilities to trace illicit financial flows through whatever In September 2018, the British Columbia government fronts and vehicles these funds may be channelled. created an expert panel chaired by Simon Fraser Univer- sity professor Maureen Maloney to shed light on money Ownership transparency and tax fairness laundering in the province’s real estate sector, a practice No one, not high-powered tax lawyers at an offshore firm commonly undertaken through the use of shell compa- or international crime syndicates and their confederates nies. According to the panel’s final report in May 2019, an in corrupt governments, should be able to turn to Canada estimated $7.4 billion was laundered in British Columbia in as a secrecy jurisdiction of last resort—and after everyone 2018, with around $5 billion hidden through housing. The else has gotten their act together on corporate ownership report estimates there could be about $30 billion laundered transparency. throughout the rest of Canada. As these cases demonstrate, the need for a national Though the Maloney report did not put forward an public beneficial ownership registry has become more estimate of how much of this money could be linked to tax urgent than ever. Its establishment would eliminate the evasion, it explicitly acknowledges the vital link between use of shell companies as a means of engaging in financial evasion and money laundering: “Money launderers are often crime and allow Canada to realize advantages like potential also tax evaders. Less taxation revenue directly impacts the increased tax revenues and an easing of the endemic money ability of governments to provide quality public services for laundering of recent years. residents,” it reads. The report also highlights linkages with Now, a national public registry would by no means be a entities in tax haven jurisdictions: “All of the complexity of panacea or a one-stop shop for tackling the complexity of the international financial system can be used in innovative financial crime. It would, however, provide a much-needed ways to structure a series of transactions that can be difficult extension and supplement to the existing financial intel- or impossible to trace back in practice.” ligence infrastructure, one that can help authorities by raising red flags in the event of suspicious transactions Oilpatch Case and transfers. In 2018, investigators from the CRA alleged that a company A public registry would fill in or match information from with holdings in Alberta’s oil patch, Sequoia Resources other databases, such as sanctions lists or the recently Corp, served as a vehicle for tax evasion in connection implemented Common Reporting Standard, and make it with offshore accounts. The CRA claimed the company’s easier to co-operate with other jurisdictions in catching owner received funds amounting to $2,666,865, “through a the culprits of transnational money laundering and tax series of transfers involving foreign corporations that he evasion. For big cities like Vancouver and Toronto, where is either directly or indirectly involved with.” large infusions of anonymous wealth have inflated housing Though a relatively small-scale case of alledged individu- prices, a beneficial ownership registry would curtail the use al tax evasion compared to the more notorious scandals, it of shell companies as vehicles through which to purchase is important in that it involves the Alberta oil patch, which property, and would do much to ease the affordability crisis. is often touted as the economic mainstay and pride of the For the federal government, a registry would close the province. More care needs to be taken by the provincial avenues afforded by anonymous shell companies for di- government in Edmonton to address the vulnerabilities recting the proceeds of crime to illegal outfits and assorted of the sector to tax evasion. kleptocrats. Just as important, a beneficial ownership registry and database would allow Canada to challenge Project Sindicato its growing international reputation as an alternative tax In June 2019, York Regional Police divulged information haven and money laundering destination. on the bust of the “Figliomeni Crime Family,” accused of We shouldn’t be the place deceptive tax lawyers settle on laundering around $35 million through illicit funds and to set up shell companies for their rich clients. We should assets. Twenty-seven arrests were made, including nine instead take a leadership role in the global campaign to individuals in the organization’s leadership who “face a restrict illicit financial flows, fight corruption and lay the litany of charges, including money laundering, tax evasion, foundations of a fairer economy and a more decent society and participation in a criminal organization, among others,” at home and abroad. M according to Global News. The Figliomeni family’s alleged criminal enterprises include corporate entities in the form of accounting firms and real estate companies in and around Vaughan, just north of Toronto. Using these corporate entities, the organ- ization was allegedly able to engage in “laundering millions through Ontario casinos, gambling between $30,000 and $50,000 a night,” as reported by the Vaughan Citizen. Police involved in the case have remarked on the centrality of investigating “financial offences that can be documented.” The observation underscores the need for law enforcement authorities to have the tools and 19 003

MATT POLACKO Canada’s failed corporate tax cutting binge

orporate income tax dumped their proceeds into share Even small changes in corporate has long been a leading buy-backs and dividends. tax rates have sizeable ramifications, provider of government Despite this considerable policy as every one percentage point cut has revenue. Unfortunately, failure, we still hear calls for renewed been estimated to cost the federal largeC sections of the media and poli- corporate tax cuts in Canada. The government roughly $2 billion in cy-making community have accepted Alberta government, for example, has annual revenue. This lost revenue the notion, propagated by both the announced it is lowering the provincial has substantially undermined public business lobby and neoliberal ideolo- corporate tax rate by one-third, claim- spending. But corporate tax cuts have gy, that corporate tax is a detrimental, ing this will increase competitiveness also been shown to actually foster slow- inefficient and growth inhibiting tax. and spur investment. It almost certain- er growth in Canada. Worse yet, rather Tax cuts, on the other hand, are said to ly will not. Between 2000 and 2006, the than investing their enlarged earnings encourage investment, create jobs and Chrétien and Martin governments cut into expansionary industrial projects, increase productivity. There is strong the corporate rate from 28% to 21%; Canada’s corporate sector has hoarded evidence that neither of these widely by 2012, the Harper government had an idle cash pile of $680 billion, which held beliefs are true. taken it down to 15%. nearly matches the federal debt size. We need look no further than south This halving of corporate taxes in As mentioned, the corporate profits of the border for the latest example just 12 years contributed substan- that are not hoarded have mostly of corporate tax cuts failing to match tially to the profits of large firms, been spent on share buy-backs and promises. President Trump’s Tax Cuts but the public benefits are hard to dividends. As shown in the chart, and Jobs Act of 2017, which lowered find. According to Statistics Canada, dividend spending has quadrupled the corporate tax rate from 35% to 21%, after-tax corporate profits have more since the turn of the century as the did not lead to any increase in growth, than doubled since 2000 (from $122 tax rate dropped, while investment in investment or wages, according to a to $303 billion) while total federal machinery and equipment has barely Congressional Research Service paper corporate tax revenue increased by budged. published in May. These findings were $33 billion (from $50 to $83 billion). Canada already has the lowest effec- echoed in a more recent study by the Canada’s economy (measured by GDP) tive corporate tax rate (which includes IMF. The only benefit from the cuts doubled in size over this period, from tax incentives) among the world’s was a brief upturn in repatriated $1.13 to $2.22 trillion, yet corporations leading economies, but it hasn’t led corporate money from abroad, which are contributing a declining share of to any increased rates of business quickly levelled off as companies this amount to the federal treasury. investment. Canadians should be questioning why we are trying to win a global race to the bottom that simply helps more wealthy shareholders Source: Statistics Canada, Tables: 36-10-0117-01; 36-10-0104-01 $300 30% avoid paying tax. Low corporate tax rates contribute $250 Dividends 25% to soaring inequality that has also proven to be harmful for economic $200 20% growth. Moreover, the long-term well-being of Canada is being put at Ta rate (right ais)

Billions $150 15% risk, since corporate profits depend on tax-financed public goods such as $100 10% an educated and healthy workforce and a strong infrastructure. Cutting $50 Investment 5% already low taxes for corporations does not lead them to invest more or $0 0% contribute their fair share, but it does 2000 2003 2006 2009 2012 2015 2018 undermine everyone else. M 20 004

RYAN CAMPBELL It pays to enforce Canadian tax law

egular people are easy to tax. Most of their pay The agency’s annual budget was scheduled to be cut by shows up on T4 slips, and most tax loopholes, $900 million; 3,000 positions faced elimination. Criminal shelters and incentives are of no use to them. investigation auditors were removed from smaller regional Large corporations and wealthy individuals, offices and consolidated into a few urban centres. A whole on Rthe other hand, can hire teams of high-priced specialists category of crucial subject matter expert positions were to aggressively game the tax code. They have the income either eliminated or the function was diluted. Divisions to take full advantage of every possible relevant incentive. for compliance, research and special enforcement faced For the rich and powerful, enforcing the rules takes extra the axe. Broadly, the CRA was required to collect the same work, but it’s worth the effort. amount of revenue with fewer resources and a smaller Canadians know the system is unfair. Asked by Environ- head count. The agency decided to increase automation ics in 2018 whether it’s easier for corporations and wealthy in the auditing process and reorient other aspects of their individuals to evade or avoid tax than it is for average peo- approach to tax enforcement. ple, almost 80% of respondents agreed. Surprisingly, when The changes were not well received. Employees pointed the Professional Institute of the Public Service of Canada out they had less time to work on the bigger, more complex (PIPSC) put the same question to the auditors, economists, cases and instead had to focus on the simpler ones. In prac- actuaries and other professionals at the Canada Revenue tice this meant looking at a greater number of small errors Agency, the level of agreement was even higher: 90% said on small returns instead of spending the time needed going it’s easier for some to get around taxes compared to others. after the people trying the hardest to avoid taxes. Others Think about this in the context of a few troubling trends. said the restructuring was so misguided that it was acting First, corporations are footing less of the overall tax bill as a de facto tax cut that benefited the big offenders while compared to individuals. Second, the super wealthy are charities, small businesses and individuals faced stricter paying a smaller percentage of their annual income in scrutiny. taxes compared to the middle class. And third, the inner Despite some much-needed reinvestment in the CRA workings of tax avoidance schemes have been exposed since 2015—under the banner of enhancing tax fairness— in recent years by high-profile leaks such as the Paradise funding levels are just now returning to where they were and Panama papers. The end result is a growing number before the 2012 cuts. When adjusted for inflation, a $500 of regular people who understand the problem and want million gap still exists between the agency’s capacity solutions. then and now. Auditors feel outgunned by sophisticated CRA employees are regular people too; they want the rules tax avoiders. Investment in training, technology and staff to apply fairly to everyone. They also have unique insight would go a long way to levelling the playing field. into the working of the tax system and understand that any The 2016 federal budget promised that every $1 in solution must acknowledge the connection between tax proposed additional spending on the CRA would bring fairness and the hands-on work they do enforcing tax laws. $12 in revenue. In 2017, it was $5 in revenue for every $1 And yet despite the increasing technological sophistication spent. Investing in tax enforcement can raise billions to of tax avoidance—to the benefit of large multinational fight climate change or fund new programs like universal corporations and tax havens—the CRA has struggled to pharmacare, all without having to raise taxes. In 2019, the maintain its funding. Parliamentary Budget Officer estimated that big corpo- One of the worst hits to the CRA came in the Harper rations use tax havens to shirk upwards of $25 billion per government’s cost-cutting 2012 federal budget. At the time, year. Clearly, more work needs to be done. every department and agency was asked to find efficien- Canadians are fed up with the shell games that wealthy cies totalling between 5% and 10% of their overall budget. individuals and big corporations play to get out of paying The official line was that they were targeting back-office their fair share. Professionals at the Canada Revenue spending. The reality was that you couldn’t cut that deep Agency are firmly among them. M without impacting frontline services. Nowhere was this RYAN CAMPBELL IS AN ECONOMIST WITH THE PROFESSIONAL INSTITUTE OF THE destructive practice more arbitrary and illogical than at PUBLIC SERVICE OF CANADA. the Canada Revenue Agency, where everyone’s job—either directly or indirectly—is to bring in money. 21 005

ERIKA BEAUCHESNE “Crooks and kleptocrats” How a beneficial ownership registry would clear up Canada’s snow-washing problem

hen John Penrose vis- report earlier this year estimated that property—a Canadian first, and “one ited Canada this year up to $130 billion in illicit funds cross of the biggest steps of any government to address a global an- our borders every year. The practice of in the world to address beneficial ti-corruption summit, cleaning dirty money in the Canadian ownership transparency,” according heW brought some advice for his host economy has grown so common that to Cohen. It could take time for federal country. The U.K. member of parlia- international experts found a special and provincial governments to reach a ment told government representatives term for it: snow-washing. consensus on a pan-Canadian registry, of a powerful anti-corruption tool that “We are at the back of the pack on but Cohen says that’s even more rea- would cost less to implement than beneficial ownership transparency,” son for jurisdictions like B.C. to press paving a few kilometres of road. says James Cohen, executive direc- ahead with their own measures, like a He was talking about a public tor of Transparency International public land registry. registry of beneficial owners, a search- Canada, one of several organizations able database that identifies the true advocating for a pan-Canadian pub- overnments that don’t act should owners of companies. In jurisdictions lic registry of beneficial ownership. Gconsider themselves warned, without public registries, companies “While our peers make the move to according to Maureen Maloney, pro- can be established without ever re- address this policy, Canada becomes fessor at the School of Public Policy vealing the identify of the person or an increasingly soft target for crooks at Simon Fraser University and chair people controlling them. Businesses and kleptocrats,” he warned. of the expert panel that produced the can then be used to move illicit funds, It’s not hard to understand why crim- report Combating Money Laundering including proceeds of corrupt gov- inals are drawn to Canada: there are in B.C. Real Estate. In an interview this ernments, trafficking and terrorism. more rigorous checks to obtain a library year with CBC’s The Current, Maloney White-collar criminals also profit card here than to set up a shell company. cautioned that other provinces will from the secrecy, which slows down Under the cover of a legitimate business, find they have a much bigger issue once investigators and tax authorities. criminals can stash their dirty money criminals start moving their money out As the U.K. prime minister’s Champi- in various sectors of the economy, from of B.C. in search of a new home. The on on Anti-Corruption, Penrose knows casinos to real estate. The effects have expert panel calculated that other a thing or two about tackling the kind been especially felt in British Columbia, provinces are already awash in the of crime that occurs behind anonymous where money laundering has increased activity, with an estimated $10.2 billion ownership. His government was the housing prices by about 5%, according of illegal flows in Alberta in 2015, and first in the world to introduce a public to an expert panel report this spring. $8.2 billion worth in Ontario. registry to draw criminals out from Transparency International’s The Greater Toronto Area—where the shadows. Penrose spoke about the research in Vancouver found the ben- property prices and homelessness have initiative at the Open Government Part- eficial owners of nearly half the city’s been on the rise—is especially vulnera- nership Summit in Ottawa this spring, most valuable properties were hidden ble, according to a joint report this year where officials, academics and civil behind shell companies, trusts and by Transparency International Canada, society representatives from 79 coun- nominee owners. Then came a hard-hit- Canadians for Tax Fairness, and Pub- tries gathered to promote more open ting report from former RCMP deputy lish What You Pay Canada. The report democracies. He was joined on stage commissioner Peter German this spring examined more than 1.4 million prop- by representatives from Ukraine and revealing that 13,678 residential proper- erty transactions in the GTA and found other jurisdictions that see the value ties in B.C. were owned by individuals or at least $20 billion entered the GTA of beneficial ownership transparency. entities in one of 113 countries outside housing market over the last decade The Canadian government, however, of Canada, more than a fifth of which without oversight or due diligence on appears to be mostly watching from are from known high-risk jurisdictions. beneficial owners and source of funds. the sidelines, even as the situation In response to the findings, the B.C. Companies were more than three times worsens at home. Weak transparency government called a public inquiry as likely as individuals to purchase real laws—they are among the worst in the into its money laundering problem estate without a mortgage. G20—have made Canada a money laun- and committed to creating a public All of this has prompted a wave dering hot spot. A C.D. Howe Institute registry of beneficial owners for of support for greater transparency 22 across the board. One of Canada’s largest single-industry trade associations, the HOW DO BENEFICIAL OWNERSHIP Ontario Real Estate Association, backed calls for a public registry of beneficial REGISTRIES WORK? owners of property. CEO and former provincial Progressive Conservative party Federal and provincial governments already leader Tim Hudak told the Toronto Star the policy solution was “a no brainer.” have business registries that are updated Municipalities have a major stake as well. Regional governments have been left whenever a company is created, dissolved, to deal with the localized effects of money laundering and other criminal activity, amalgamated, or when it changes ownership, including drug and human trafficking, a worsening fentanyl crisis, and lack of address and other information. A public, affordable housing. Revenues lost to tax evasion have added insult to injury, as searchable pan-Canadian registry would add governments claw back public services rather than addressing the root of their beneficial ownership fields to these existing revenue problems. corporate registries, identifying the individual Tax experts recognize the need for greater transparency. A recent survey of investing in and controlling the company Canada Revenue Agency professionals found 61% believe Canada is too secretive rather than a nominee or “straw man.” about beneficial ownership and even more (75%) agree that federal and provincial governments should require corporations to publicly identify beneficial ownership What data does a registry contain? relationships. Basic information such as name, partial date Business too is building a case for lifting the veil on anonymous ownership. of birth, address, country of residency, and Legitimate small and medium-sized enterprises (SMEs) have lost millions whether the owner is a person of interest or from being taken advantage of by criminals hiding behind shell companies. head of an international organization. For Law enforcement is having a hard time tracking the perpetrators down, much privacy reasons, some of that information less recovering lost funds. The C.D. Howe Institute found that 99.9% of money would be limited to government or law launderers are never caught due to the difficulty of tracing money through a enforcement officials, but a unique identifier complex web of secret corporate entities. can be used to search related entities and SMEs and big business alike need access to beneficial ownership information activities. to help them make informed decisions about their supply chains, says Robin Who benefits? Hodess, a panellist at the Open Government Partnership summit this spring and Law enforcement tracking illicit activity; tax director for the B Team, a U.S.-based advocacy group of global business leaders. officials investigating avoidance or evasion At last year’s B20 in Argentina (a global business meeting on the sidelines of the schemes in Canada and across multiple G20 summit) industry representatives called on governments to reduce business jurisdictions; real estate and financial risks associated with anonymous company ownership. Public registries are in- institutions carrying out due diligence creasingly seen as a critical due diligence tool, and support for that open data is checks; Canadian businesses verifying growing across multiple levels of industry, from big banks to small businesses customers, creditors and potential partners; and even multinationals, Hodess told the summit. journalists and civil society investigating Weak transparency rules pose risks to society beyond the impact on business. matters of public interest and safety, etc. A report this spring from the Washington-based FACT Coalition highlighted how opaque ownership has allowed the import of counterfeit goods ranging from cancer Which jurisdictions treatment medication to knockoff military components. Legislators in the U.S. have are leading on transparency? recently acknowledged the perils of anonymous business ownership; beneficial The U.K. was one of the first to implement ownership bills are making their way through congress with bipartisan support. a public registry of beneficial owners and recently passed a law requiring overseas s the U.S. moves toward greater transparency, it has heightened warnings about territories, such as the British Virgin Islands, Athe “major money laundering country” to its north. The U.S. Department of to do the same. The European Union has State this spring placed Canada on a shortlist of countries, including Afghanistan, required member nations to create public the British Virgin Islands and China, at high risk of money laundering. Canada’s registries by 2020. A number of regions have international reputation continues to suffer as international headlines expose the or are in the process of adopting beneficial country’s snow-washing problem—and lack of government response. ownership registry laws, including Brazil, An estimated $2.6 trillion—roughly 5% of global GDP—is laundered world- South Africa, Ukraine and others. Within wide. The effects at home are detrimental enough, but they are devastating Canada, B.C. requires public registries of in countries where the additional loss of revenue exacerbates poverty. Money beneficial ownership for property through laundering helps fund terrorism and trafficking, which also more profoundly its Land Owner Transparency Act, which affect the poorest individuals, particularly women. Canada, which is committed mandates that corporations, trusts and to a feminist international assistance policy, can do much more to strengthen partnerships disclose beneficial owners at domestic laws to reduce gender-based violence beyond our borders. the time of legal transfer of a property, and Federal and provincial policy-makers have acknowledged there’s a problem. This any changes in ownership. spring, Finance Minister Bill Morneau announced the government would commit Who supports a public registry? to exploring solutions with the provinces, including looking at a public registry of The Canadian Money Services Business company beneficial owners. But without any firm commitment, advocacy groups Association, Open Concept, the AML and citizens must continue to press all levels of government to move toward more Shop, Mining Watch, the Canadian Labour transparent laws that protect our communities, the economy, and Canada’s role Congress, FACT Coalition, IMPACT, and on the international stage. M many other organizations. 23 006

SAMUEL-ÉLIE LESAGE An irresistible march toward fiscal justice

chec aux paradis fiscaux interested and surprisingly well in- For instance, the government should was founded in 2011 by a formed on the matter of tax havens. restrict access to the CRA’s pardon pro- small group of unions and This popular concern has translated gram—which lets some tax avoiders civil society organizations into government action. For example, who come forward voluntarily avoid fedÉ up with how easily corporations while Ottawa has done nothing to paying much of the back tax they and high-wealth individuals avoid stanch the flow of taxes out of the owe—and put the agency under better paying taxes. Slowly, the coalition has country (and even worsened the scrutiny. We also need new tools to grown to the point that today, nearly all situation), Québec launched an ex- tackle tax avoidance via diverted profit Québec’s unions are members, along- tensive inquiry into how tax havens logging (of the sort practised by Google) side a great number of other groups impair public finances that produced and to increase corporate transparency. and two national student associa- a government action plan in 2017. Al- A public ultimate ownership registry tions. In the past three years, we have though seriously imperfect, the plan would help in this regard, as would met with executives at the Canada dares to acknowledge the existence ending legalized tax avoidance through Revenue Agency, organized demon- of tax havens and puts forward some Canada’s fiscal conventions such as tax strations, took part in parliamentary interesting policy ideas. information exchange agreements consultations (provincial and federal), As I am writing these words, Québec (TIEAs), which let Canadian companies and held public conferences and civil is planning another consultation on the repatriate profits logged in known tax education workshops in Québec. implementation of a public beneficial havens without paying taxes. I believe the strength of our campaign ownership registry. The policy would Finally, Canada must be at the for greater fiscal justice comes from reveal who benefits from legal entities forefront of the fight for fiscal justice Québec’s rich history of social struggle such as companies and trusts, make by proactively promoting new models and popular support for public services. those people accountable if they try to of international financial governance. While it is true that those very services snow-wash money or avoid their taxes, We advocate the idea of unitary inter- are currently undermined by austerity and would considerably bolster corpo- national corporate taxation. Rather policies and privatization initiatives, the rate transparency. Along with British than considering each company of a people of Québec understand that other Columbia’s public registry on properties, multinational firm as an autonomous political choices would be possible if the the Québec action confirms how polit- entity, which facilitates tax restruc- funds lost to money laundering and tax ical mobilization and public interest turing and avoidance, multinational havens were brought back within the shape and influence policy-making. companies should be taxed based on reach of fiscal authorities. In the lead-up to the October elec- their consolidated revenues, and on In that regard, it infuriates Quebec- tion, all the main parties put forward profits realized in each country. ers that we still have a two-tier tax policy ideas to tackle tax avoidance, yet The world urgently needs to transition system, where the rich and the most similar promises in the past have been to a cleaner and more equitable econo- powerful megacorporations are legal- forgotten by incoming governments. my. With all the new public investment ly allowed to avoid taxes without fear Still, the population has never been this transition entails, reforms that put of recrimination. Québec is almost more aware of this issue and rightly an end to tax avoidance and tax havens unanimously in favour of requiring demands more from their leaders. have never been more important. that Netflix charge and remit sales In order to put the fight against tax Pressure is growing for our politicians taxes, for example, while the federal avoidance at the forefront of the to do more, and more importantly to government claims that legal tax election, the Échec coalition asked do better. Other countries are showing avoidance by internet-based service each party to commit to 12 radical and the way by trying different, innovative providers is best for the middle-class. innovative solutions to the problems approaches to end tax havens. I believe Nonsense! Other tax scandals such as of tax havens and money laundering. Canada should be one of them. M the Panama and Paradise Papers leaks Where they said we were asking too SAMUEL-ÉLIE LESAGE IS CO-ORDINATOR OF gathered enormous attention here. much, we pointed out that many of ÉCHEC AUX PARADIS FISCAUX AND AN ASSOCIATE RESEARCHER WITH L’INSTITUT DE RECHERCHE ET When Échec members meet with these measures are already in place D’INFORMATIONS SOCIOÉCONOMIQUES (IRIS). the public, we find they are genuinely or being considered in other countries. 24 007

JAMIE KNEEN What riches await… Canada treats mining companies like the goose that laid the golden egg. What we get in return looks more like a goose egg.

ining enjoys massive There are also financial incentives been slowly getting better, Canadian government support to mine. The federal and provincial jurisdictions still dramatically un- in Canada. Politically, governments and territories spend dercharge mining companies when it it’s treated as a pre- hundreds of millions on road and comes to setting aside money to clean ferredM development option for remote power corridors to support mining up spills or for long-term environmen- communities and Indigenous peoples. projects, while supporting training for tal monitoring and rehabilitation. Former Saskatchewan premier Brad mining skills that are often not highly All of this is justified publicly by the Wall once said, “The best program transferrable. Already low corporate creation of jobs, contribution to GDP for First Nations and Métis people tax rates are further reduced by and exports—and taxes paid. Mining in Saskatchewan is not a program at accelerated capital cost allowances does create “good pay” jobs, though all—it’s [uranium mining company] and deductions for exploration and more of these are displaced from other Cameco.” The law backs this up. Min- development costs. “Flow-through” sectors than the industry will admit. ing companies still have rights to “free shares allow mining companies to Mining does generate export earnings entry” in much of Canada, since mining pass exploration costs onto investors and boost GDP, though economists is legally considered the “highest and as tax deductions. And while they’ve will argue about whether these really best” use of land. Though these laws represent development, especially are being challenged by First Nations, when what is being exported is raw today prospectors can stake claims and materials with little value added. So, even drill or trench without any con- Thessaloniki protest against the what of the taxes? sideration for other land users, or in Skouris gold mine in northern On paper, mining operations pay some cases, even private landowners. Greece, September 2013. corporate tax and sales tax, among 25 others, along with royalties (some- Ontario government $226 in royalties of the resource, as they remove many times called “mining tax”) intended to from its Victor Mine in Attawapiskat, times more millions of dollars’ worth compensate the state for the perma- the only diamond mine in the prov- of metals. Any honest calculation also nent loss of whatever resource is being ince. “The diamond royalty stirred a has to include not only the overall flow extracted. Depending on the audience, huge debate when the Ontario govern- of money to governments, but also the mining companies will either brag or ment suddenly introduced it in 2007,” subsidies, costs and liabilities, includ- complain about the amount of tax wrote Celli. “Then-premier Dalton ing social disruption and damage to they pay. They rarely explain how McGuinty promised it would enrich local economies and the environment. those amounts are calculated, much all Ontarians. He promised the money less compare them to what they might would be used to hire more nurses and nternationally, the Canadian gov- have had to pay if it weren’t for the keep class sizes small in schools.” Iernment takes the promotion of lowered tax rates, tax holidays and The low figure was due to De Canadian mining companies very exemptions. More egregiously, they Beers having been allowed to write seriously indeed. This is demonstrated also like to take credit for the taxes down its capital investment against by the fact that while Canadian and that their workers pay. the royalties. Tom Ormsby, De Beers’ international civil society has been James Wilt, writing in The Narwhal vice-president of external and cor- pushing for almost two decades for in July last year, found that Canadian porate affairs, told Celli the company restrictions on the international governments collect a smaller per- started to pay millions in 2014. Its activities of Canadian companies, centage of mineral value than almost reports under Canada’s Extractive the federal government has refused any other jurisdiction in the world. Sector Transparency Measures Act to recognize that illegal activity and There are a number of explanations (ESTMA), in force since 2015, show it human rights and environmental for this, ranging from low tax rates paid US$15.8 million in royalties in 2016 abuses are even happening, much to grace periods and tax holidays, as (on earnings of US$79 million) and less restrict them—or enforce the mentioned, to using a variable base for US$11.3 million in 2017 (on earnings sole piece of legislation we do have, calculating royalties. Canada is unusu- of US$205 million). The mine closed the anti-bribery Corruption of Foreign al internationally, for example, in the in early 2019. In other words, the mine Public Officials Act. extent to which it charges royalties probably generated almost nothing At the same time, Canada provides based on profits rather than on the for the province for the entire first massive support for transnational amount of mineral extracted, allowing half of its production, and probably mining investment, both politically for deductions and “profit-shifting” to less than $100 million over its 11-year and economically. It helps explain diminish the amount owed. life. why so many mining companies are In an extreme example, the CBC’s Any assessment of the millions in domiciled in Canada, even if they have Rita Celli reported in May 2015 that taxes and royalties from mining oper- no Canadian operations, or even no in 2013-14, De Beers Canada paid the ations has to include the overall value

Eldorado Gold 2018 payments to governments (USD) vs. production Source: ESTMA and company’s Annual Information Form.

INFRASTRUCTURE PRODUCTION IMPROVEMENT COUNTRY PROJECT NAME (OZ. GOLD) TAXES ROYALTIES FEES PAYMENTS PAID

Romania Certej 0 - 1,820,000 1,820,000

Turkey Kisladag 172,009 80,000 3,180,000 6,500,000 9,760,000

Turkey Ankara Corporate Office n/a 15,290,000 - 190,000 15,480,000

Turkey Efemcukuru 95,038 40,000 2,710,000 1,340,000 4,090,000

Greece Kassandra 46,750 80,000 150,000 230,000

Greece Perama Hill 0 10,000 20,000 30,000

Brazil Tocantinzinho 0 440,000 1,060,000 1,500,000

Canada Lamaque (started production 35,350 130,000 130,000 Dec. 2018, projected 100–110,000 oz/yr) 26 Canadian directors, and regardless of who actually owns the majority of their shares. Our embassies contribute “economic diplomacy,” which Even our includes pressuring foreign governments to support favourable legislation and policies and helping build rela- development aid tionships between mining executives and foreign officials, such as mining ministers and state presidents. Canadian is skewed toward diplomats also provide support directly to companies, going so far as to help them comply with regulations and rewarding countries apply for permits. Even our development aid is skewed toward rewarding countries and regions that are willing to and regions that host Canadian mining projects, and assisting governments in administering mining laws so as to smooth the way for are willing to host Canadian investment. Economic support is both direct (investment from the Canadian mining Canada Pension Plan and Canadian Investment Fund for Africa, for example, or loans and political risk insurance projects. from Export Development Canada) and indirect. Canada has built a massive network of tax treaties, bilateral investment treaties and free trade agreements that all serve to facilitate and protect Canadian investment, as well as allowing profits to be shifted through subsidiary companies to avoid taxation. It’s all perfectly legally, if you gold production is, but nowhere else. Not even Canada, do it right. where it is supposedly headquartered, but also where The result is a ballooning offshore pool of wealth sitting it now operates the Lamaque Mine outside of Val-d’Or, in tax havens and secrecy jurisdictions in the Caribbean, Quebec. Channel Islands, and even some U.S. states—wealth that is What we don’t know is how much the company should not taxed to benefit the countries it was extracted from, or have paid in the absence of what the accountants call even the country that worked so hard to facilitate it (in this “aggressive tax planning,” or what the rest of us call tax case, Canada). Governments that try to protect their own dodging. Nor does this accounting show how much has people and ecosystems from mining destruction face the been set aside as security bond for closure, cleanup, and threat of multimillion-dollar lawsuits through arbitration possible spills and accidents. provisions in those investment agreements. It makes sense that Turkey, as the primary host of Eld- To pick just one example, Eldorado Gold has been strug- orado Gold’s operations, should benefit most. It’s an open gling for years to overcome committed local opposition question whether the country benefits enough to com- to its planned Skouries open-pit gold mine in Halkidiki, pensate for the loss of its gold-bearing ore, not to mention northern Greece. Local people opposed to the massive the various forms of damage occasioned by mining or the project have raised objections over the destruction of liabilities it leaves behind. And it’s more than likely that a forest that is of immense cultural and historic signifi- the company has minimized its exposure to Turkish taxes. cance—it is where local partisans gathered to strategize But at the same time, there is clearly no direct return for and mobilize against the fascists, and now serves as a focus Canada from all of the support we provide. If share value for tourism, beekeeping, etc.—and the contamination of increases or the company pays dividends we can benefit freshwater supplies (the ore is loaded with arsenic, among as shareholders—through our pensions, RRSPs or the other things). Canada Pension Plan. But clearly the loot is mostly being They have also questioned the promised benefits for the scooped up by others: well-paid company executives, the Greek state—with good reason. A study led by the Dutch banks that finance all of this, and the legal, accounting and organisation SOMO (the Centre for Research on Multina- investment houses. tional Corporations) found the company has structured At the end of the day, the notion that mining is good its investment with tax avoidance in mind. Subsidiaries in for Canada is pretty dubious. The reality within Canada the Netherlands will allow Eldorado to shift profits from is much more complex than our governments and most Greece to the Netherlands and Barbados, minimizing expo- of the media are willing to admit. In other parts of the sure to taxes and leaving Greeks with little to show for the world, the reality is that Canadian mining primarily mine’s ecological, social and economic disruption. SOMO benefits the mining companies, their local backers, and calculated this arrangement had cost Greece 1.7 million their financiers. Its contributions to “host” countries are euros in lost tax in 2013-14 alone (nearly $2.5 million based variable and on balance generally negative. Despite all the on the exchange rate at the time). effort from public officials, Canada hardly benefits at all. A look at Eldorado Gold’s payments to governments, as It’s past time we started to dismantle the legal, regulatory, disclosed under ESTMA, shows that as of 2018, the company financial and political support that feeds and sustains this made significant payments in Turkey, where most of its false narrative. M 27 008

KADY SEGUIN AND EMILY NICKERSON The case for transparency in the mining, oil and gas sector

anada is one of the biggest extractive sector For many companies, enhanced transparency is good for players in the world. We are home to approxi- business. It can promote a more stable investment climate mately 60% of the world’s mining companies, and help secure a social licence to operate. During debate on and the Toronto Stock Exchange and Venture ESTMA, investors in the mining sector expressed the desire ExchangeC host more oil and gas companies than any other to see companies disclosing what they pay to governments exchange in the world. Collectively, these companies have in order to assess project- and country-specific reputational interests in over 100 countries. and tax risks. As the use of tax havens continues to receive Whether through taxes, royalties, bonuses or fees, extrac- more and more attention, investors are paying closer atten- tive companies make significant payments to resource-rich tion to such information. countries and communities around the world for their One of the key things that PWYP-Canada heard from natural resources. Until recently, these numbers were many extractive companies during the transparency shrouded in secrecy. Citizens had no way of knowing how working group campaign was that people, communities, and much money their governments were making from their sometimes even governments often believe a company has natural resources or how those revenues were being spent. paid significantly less or more in taxes and other payments This opacity has fuelled corruption and mismanagement in than is the case. Some companies had been wrongly accused many resource-rich countries and stifled informed dialogue of paying no taxes at all. about how natural resources should be managed. While companies can voluntarily disclose this informa- Recognizing the benefit of increased transparency, tion—and some did prior to the passing of ESTMA—the PWYP-Canada (Publish What You Pay Canada), with the fact the company is legally required to do so provides a Natural Resource Governance Institute, the Mining As- much stronger level of credibility to this data. Furthermore, sociation of Canada and the Prospectors and Developers legal transparency requirements level the playing field Association of Canada, launched the Resource Revenue while providing a full and clear picture of the industry to Transparency Working Group. Together these organiza- citizens and communities interested in what companies tions promoted mandatory disclosure requirements for in their region are paying governments at various levels Canadian mining companies operating in Canada and (local, regional, national). around the world. The question of how much a company should pay in taxes In 2014, responding to the working group’s campaign, and other payments is an important one, as is the question of the federal government passed the Extractive Sector whether to extract natural resources at all. There are a variety Transparency Measures Act (ESTMA). Canadian extractive of social, environmental and economic considerations that companies are now required to publish their payments per need to be made, including how much money governments project in countries where they operate. The act requires will earn from the project. Without this information, it is large private oil, gas and mining companies, along with almost impossible to have a meaningful and informed conver- those listed on a Canadian stock exchange, to disclose the sation about whether what is being paid (or will be paid) is fair. payments they make to governments in Canada and abroad There have been numerous debates in Canada over the tax- on a country-by-country and project-by-project basis. ation regime, federally and in the provinces and territories, Many were surprised to see the Canadian mining for oil, gas and mining companies. These debates often take industry supporting these requirements and sometimes place in the absence of tangible data on how much money actively pushing for them. But there are clear benefits to such projects contribute to the public purse. It’s time for a the industry from transparency, including the opportunity more data-driven conversation about the value of mining to demonstrate leadership on a global scale. As highlighted and extracting natural resources. The transparency require- by the Mining Association of Canada on its website, “[t]he ments in ESTMA take us a step in the right direction. M enhanced transparency resulting from this legislation will KADY SEGUIN IS TECHNICAL DIRECTOR AT IMPACT AND PRIMARY LIAISON WITH help reduce instances of corruption by enabling citizens DOWNSTREAM MARKET ACTORS IN THE MINERAL SECTOR. EMILY NICKERSON IS EXECUTIVE DIRECTOR OF PWYP CANADA. DATA ON PAYMENTS TO NATIONAL around the world to hold their governments accountable AND FOREIGN GOVERNMENTS FROM EXTRACTIVE ENTITIES ACTIVE IN CANADA for how they allocate and spend mining revenues. It will also CAN BE FOUND ON THE NATURAL RESOURCES CANADA WEBSITE. FOR GLOBAL INFORMATION, INCLUDING DATA FROM CANADA AND COUNTRIES WITH SIMILAR help to ensure that these revenues contribute to sustainable LEGISLATION, SEE WWW.RESOURCEPROJECT.ORG. development and poverty reduction.” 28 009

BRONWYN OATLEY, CLAIRE TROTTIER, DAN HOYER, DAVID GRAY-DONALD, JON MCPHEDRAN WAITZER, LINDSAY WIGINTON, SELIN JESSA AND SYLVIE TROTTIER These rich folks want their inheritances taxed!

e are living with vast discrepancies between only to grow more and more extreme over time. This leads rich and poor in Canada. That much is unde- to increasingly drastic consequences: high rates of poverty niable. According to the Broadbent Institute, and immiseration, polarization and political gridlock, in- 10% of Canadians held almost half (47.9%) of creased crime and social and domestic violence. allW wealth in 2012. Meanwhile, around one in seven people In addition to opposing inequality for its unfairness, we (about 14%) live in poverty, according to Canada Without don’t want to live in a world with these material disparities, Poverty. The gap between those with and without wealth hierarchies and power differentials between people. We see is stark. According to a 2018 CCPA report, the wealthiest 87 how wealth inequality negatively affects people we know, families in Canada hold about 4,448 times as much wealth our relationships, and ourselves. as the Canadian average. This gap is only growing. Fortunately, there are some compelling ideas out there to For many rich people, wealth comes not only from wages, close the wealth gap. Many other societies, present and past, but also from capital gains (through owning and trading have turned these ideas into action. Promising measures stocks and bonds) and intergenerational transfers of include estate taxes on properties worth several millions of money and land. The latter was often accumulated at the dollars, a wealth tax for the super-rich, restoring higher in- expense of marginalized communities such as Indigenous come tax brackets for those earning extremely high salaries, peoples, whose stolen resources and land continue to gen- eliminating tax loopholes and cracking down on tax evasion. erate wealth for largely non-Indigenous people and their Implementing any of these measures would begin to families. These forms of wealth persist (and grow) over redress the stark wealth inequality we are living with. Im- generations and are not taxed as progressively as income plementing them all would go even further. Ultimately, we in Canada. Inequality snowballs over time. want to see steps taken to build a world where wealth and We personally have experienced this gap mostly from the power are shared, and Indigenous land rights are respected. wealthy side of the equation. And we do not believe that Many members of Resource Movement expect to receive the concentration of money in the hands of just a small large inheritances, so we are particularly supportive of number of people is fair or beneficial to society. That is why the reintroduction of a federal inheritance tax—a form we are members of a group called Resource Movement. of wealth tax that exists in all other G7 nations. Recent Founded in 2017, our movement’s mission is to unite young calculations from the 2019 Alternative Federal Budget people with money and class privilege around a strategy suggest that a 45% tax on inherited estates valued at over to equitably distribute wealth, land and power. Resource $5 million would generate $2 billion of federal revenue. Movement (a project of Tides Canada) was inspired by the Aimed only at multimillion-dollar inheritances, this tool U.S.-based Resource Generation and currently includes would make a dent in Canada’s inequality while raising over 100 members. revenue that could, for example, begin to address the cli- Stark contrasts in wealth accumulation are fairly com- mate crisis or provide affordable child care and housing mon around the world today, but they are not inevitable. for all of us. We see this as an easy and necessary first step Wealth gaps are the result of social and political choices: to closing Canada’s immense and growing wealth gap. M choices like prioritizing tax breaks for the rich and expand- THE AUTHORS ARE ALL MEMBERS OF RESOURCE MOVEMENT. SEE CONTRIBUTORS ing fossil fuel production over increasing the number of PAGE FOR MORE ABOUT EACH OF THEM. people with access to child care and expanding the availa- bility of affordable housing. We believe, as individuals who Distribution of wealth in Canada by income decile, 2012 are or have been part of wealthy families and communities, Source: Haves and Have-Nots: Deep and Persistent Wealth Inequality in Canada roadent Institute 1 that no one needs the levels of wealth that some people in 47.9% Canada currently command. The level of inequality we are experiencing today is a threat to us all. Indeed, several recent prominent works, such as Capital in the Twenty-First Century, Ages of Discord, 19.5% The Spirit Level, The Inner Level, and Inequality: What Can 12.8% 5 Be Done?, have stressed that disparities in wealth and 3 4 8.7% ecile 1 2 3.4% 5.7% power—like those we experience here in Canada—tend -0.2% 0.1% 0.5% 1.7% Haes and HaeNots ee and ersistent Wealth Inealit in Canada, Broadbent Institute, 2014. 29 010 NATE WALLACE Should billionaires continue to exist? How taxing wealth could tackle both wealth concentration and the climate crisis

ealth taxation is back same name, stating that it isn’t need- well as exemptions for agricultural on the progressive po- ed, and it would be more efficient to property. Assessments can occur every litical agenda. It is both raise taxes on capital gains. Why 3–5 years with options to apply for a refreshing new idea not do both? Recent studies such as reassessment if a significant change andW a return to vogue of a policy es- the CCPA’s Born to Win have shown in value occurs, and payments can be tablished decade ago in Europe. Some that Canada’s wealthiest 87 families made in instalments for those taxpay- remember it as part of François Mitter- now own the same amount as the ers facing liquidity constraints. rand’s 110 propositions pour France, a lowest-earning 12 million Canadians, Wealth taxes can apply to both joint electoral platform in 1981 with which is approximately equivalent to domestic and international assets, be the Communist Party that carried him what everyone in Newfoundland and tied to citizenship and be negotiated into the Élysée Palace. The solidarity Labrador, Prince Edward Island and by international tax treaties—to elim- tax on wealth survived multiple right- New Brunswick collectively owns. In inate the incentive for capital flight. wing presidents, only to fall recently Canada, just two billionaires (David As proposed by Elizabeth Warren, to President Macron. Thompson and Galen Weston) own as you can introduce an “exit tax” at the Even so, it is an idea whose time has much wealth as a third of Canadians. same rate as an estate tax to seize come in North America. It continues A bold tax policy package is sorely assets from those who do choose to to exist in three OECD countries, and needed to address this kind of wealth renounce their citizenship. With a both Bernie Sanders and Elizabeth hoarding, which contributes to soaring rigorous enforcement regime, along Warren, two of the leading three inequality. Along with a host of other with legislation to tackle tax havens, Democratic contenders for U.S. presi- progressive measures, the wealth taxing wealth isn’t a pie-in-the-sky or dent, have a plan to tax wealth in their tax in particular sits in the enviable unrealistic idea. It just takes political platforms. The NDP also included a position of being at the nexus of both commitment and good policy design. proposal for a wealth tax in its 2019 good policy and good politics. Casting aside the nitty gritty, the election platform, which was met with According to a recent Ipsos poll, fundamental question we really backlash and bad-faith critiques from 67% of Canadians believe that “Can- should be asking ourselves when we the usual suspects. ada’s economy is rigged to advantage design our wealth tax is should we Matthew Lau, who has written for the rich and powerful.” Another poll allow billionaires to continue to exist? the right-wing Fraser Institute and conducted by Abacus Data found that Gabriel Zucman and Emmanuel Saez, Atlantic Institute for Market Studies, 67% of Canadians also support the two economists at the University of Cal- called it “class warfare” and “confisca- idea of a wealth tax, including 58% of ifornia, Berkeley who advised Elizabeth tory” in a Financial Post column. This Canadians self-identifying as “right- Warren on her wealth tax proposal, was followed by another piece in the wing” and 64% of those who say they write that the “revenue maximizing same publication by the Montreal are in the political “centre.” rate” runs as high as 6.5%—far beyond Economic Institute’s Gael Campan, the NDP proposal of 1%. According to who claimed taxing wealth would be n his critique of the NDP’s modest the economists, such a low rate would a “tragic mistake,” seemingly oblivious Iwealth tax proposal, Campan alleges provide permanent revenues due to its to the existence of property taxes in it would force poor farmers to sell their quite limited effect on wealth concen- Canada. Calling it a “demagogic ploy land and cause capital flight. Lau asks tration. Higher rates of wealth taxation, that ends up being counterproductive,” how the tax could work when wealth say, up to 10%, would more effectively Campman brings up the prospect of in financial assets can vary day by day dismantle entrenched wealth concen- the widely discredited “Laffer effect” depending on the stock market. As the tration over time with the trade-off of falling tax revenues from increasing OECD has pointed out, there are ways being the loss of a permanent and taxation. of getting around all these problems. reliable source of tax revenue. In a slightly more serious challenge, The best wealth tax systems have a Bernie Sanders’s recently unveiled Robin Broadway and Pierre Pestieau series of exemptions regarding most wealth tax plan would cut in half the call the wealth tax “Over the Top” in forms of middle class wealth, such wealth of the typical billionaire over 15 their recent C.D. Howe paper of the as pensions and primary homes, as years, according to Saez and Zucman. 30 When the New York Times interviewed while other Canadians continue to COMPARING Sanders about his plan, they asked if live in poverty? THE WEALTH TAXES he thought billionaires should exist The proper design of any wealth tax in the United States. “I hope the day system ought to both balance revenue comes when they don’t,” he responded, generation and target wealth con- adding, “It’s not going to be tomorrow.” centration. Which is why if we swear Sanders’s wealth tax (see box) is off an inheritance tax, we should be much more aggressive and much jacking up wealth tax rates. And if we more steeply progressive than War- shy away from steeply progressive ren’s plan, which begins at a 2% tax wealth tax rates, we need to at least on wealth above US$50 million and implement an inheritance tax. adds an additional 1% surtax above French economist Thomas Piketty, THE BERNIE PLAN the billion-dollar mark. The revenue best known for his best-selling book REVENUES OVER 10 YEARS: differences are large: over 10 years, Capital in the 21st Century, has just put US$4.75 TRILLION Warren’s plan would raise US$2.75 out a new book entitled Capital and trillion while Sanders’s would raise Ideology. In it he proposes a wealth tax Net Worth Tax Rate US$4.35 trillion. The other significant with a rate that goes as high as 90% US$32–50 million 1% difference is how the Sanders plan for those worth over two billion euros US$50–$250 million 2% obliterates wealth concentration (almost $3 billion). He also states that US$250–500 million 3% while Warren’s plan has a much more billionaires actually harm economic US$500 million–$1 billion 4% limited effect due to the fact that the growth and should be completely US$1–2.5 billion 5% wealth of the richest Americans grows taxed out of existence. In a world in US$2.5–5 billion 6% at an average rate of 6.6% a year. the midst of a climate emergency, it US$5–10 billion 7% By comparison, the NDP’s plan for may also simply be necessary. US$10 billion and up 8% a 1% flat tax rate on wealth above $20 Piketty writes inLe Monde that “it is million seems quite modest. The Par- increasingly clear that the resolution liamentary Budget Officer estimates of the climate challenge will not be the NDP proposal would rake in ap- possible without a strong movement proximately $70 billion over 10 years, in the direction of the compression of a value that includes the assumption social inequalities at all levels.” This that revenues from the wealth tax will is because, “at world level, the richest be reduced by about 35% due to tax 10% are responsible for almost half the avoidance. emissions and the top 1% alone emit Rather than being “confiscatory,” more carbon than the poorest half as Lau suggests, Saez and Zucman of the planet. A drastic reduction in THE WARREN PLAN write that “the marginal utility of a purchasing power of the richest would REVENUES OVER 10 YEARS: billionaire’s wealth is close to zero” and therefore in itself have a substantial US$2.75 TRILLION therefore “the revenue consequences impact on the reduction of emissions of taxing billionaires outweigh the at global level.” Net Worth Tax Rate welfare consequences on billionaires.” When designing our wealth taxes, US$50 million–$1 billion 2% Imagine for a moment what we could do we should perhaps consider not only US$1 billion and up 3% if Canada plowed $70 billion into reduc- their redistributive power but also ing poverty, fighting climate change or how they can attack the entrenched tackling the housing crisis. Canada’s oil power of economic elites—and how barons can manage with one less yacht. this might help us save the planet along the way. As Piketty suggests, a e can see that a wealth tax would wealth tax could be instrumental in Wbe good for redistribution. What shifting carbon intensive and socially of wealth concentration? Should we useless elite consumption patterns. not also tax inheritances in order to Looking forward into the next stop the out-of-all-proportion pooling decade, when large-scale economic of family wealth through massive decarbonization is on the agenda, we THE NDP PLAN intergenerational transfers? The should also ask ourselves if this should REVENUES OVER 10 YEARS: issue here is political. Sometimes in- mean moving toward a billionaire-free $70 BILLION heritance taxes poll poorly, even when world. In the future we want to build, the tax only targets the passing down if we are asked the question, “Should Net Worth Tax Rate of unearned wealth. Even so, should billionaires exist?”, we should be able $20 million and up 1% we continue to allow oligarchs to to confidently and resolutely answer: control so much wealth and power no. M 31 011 TOBY SANGER AND LARS OSBERG How high should top tax rates go?

.S. Congresswoman Alexandria Ocasio-Cortez services those taxes pay for and the opportunities to make provoked a lot of hostile—and positive—re- money that a high quality public infrastructure enables. action earlier this year when she proposed And even if some of the affluent become more likely to the United States should introduce a top tax want to avoid and evade their taxes, it is a public policy rateU of 70% on incomes over $10 million, with revenues choice whether the rest of us let them—enforcement of going to pay for a Green New Deal. Although many on the tax laws and closing tax loopholes is a better option. The right belittled her idea, it was in fact firmly based on the reality is Canada’s higher income earners are not paying historical record. their fair share and there is lots of room to increase top Both the U.S. and Canada had marginal tax rates of over tax rates. 90% on top incomes during the 1950s, and Canada’s rate was So, how high can we go? Revenue maximizing tax rates over 60% throughout the high-growth years of 1940–80, for top incomes are now estimated to be at least 60% for when the average real wage of all Canadian workers grew Canada and up to 80% in the United States. In his 2015 CCPA strongly. The wage stagnation of the last 35 years has been report, How Much Income Tax Can Canada’s Top 1% Pay?, accompanied by lower tax rates at the top, but for most of the Lars Osberg proposed that the federal government should 100-odd years income taxes have existed, high top marginal increase its top rate (on income above $210,000) to 65%, which tax rates have been the norm. would increase revenues for the federal government by an Still, some pundits argue that high tax rates will make estimated $21.8 to 26.1 billion. Canada “uncompetitive” and perhaps result in high earners The Trudeau government did, as the Liberals promised leaving Canada or working less or taking more steps to avoid in the 2015 election, increase the top tax rate, but by a much paying taxes or “the global talent pool” steering clear of the smaller four percentage points—from 29% to 33%—starting country. There is little evidence to justify these concerns. in 2016. The government estimated this would add $3 billion It’s one thing to bluster about leaving the country if income to annual revenues. In response, some of Canada’s wealthier taxes go up, but that would also mean giving up the public income earners shifted their declared income, and particu- larly discretionary forms of income such as dividends, to 2015, to take advantage of the 29% rate that was disappearing in 2016. This was reflected as a higher total declared income for this group in the 2015 tax year and a big drop in 2016. Opponents of the tax increase immediately claimed this was proof the tax hike was a failure. But figures recently released for the 2017 tax year show that the incomes declared by the top 1% have rebounded again, as have the federal taxes they paid, similar to what was expected. Once the initial income timing response was over, the hike in the top marginal tax rate has been effective in raising revenues. Revenue maximizing Importantly, the policy success means the federal government could probably increase the top income tax tax rates for top rate again, and by considerably more. The move would be appealing if only for its capacity to lower levels of inequality incomes are now in Canada—by enhancing and expanding social services or redistributing some of this money to lower incomes. estimated to be at least In his new book, Ideology and Capital, French economist Thomas Piketty proposes a top tax rate of 90% on the in- 60% for Canada and comes and wealth of the world’s richest people. We’re not there yet, but popular support for wealth taxes is growing. up to 80% in the United There’s no reason why we shouldn’t take more steps along States. the path to greater fairness in taxation. M 32 012

DAVID MACDONALD Close these tax loopholes now

few years ago, I put out a CCPA report on Canada’s most expensive tax expenditures called Out of the Shadows. It showed how some of these expenditures, sometimes called tax “loopholes” or boutique tax credits, are costing the government billions of dollars a year while primarilyA benefiting the rich. TheMonitor asked me to update those numbers for this special issue on tax reform, which is what I’ve done here. The following costs are the expected value of the tax expenditure in 2020. Cancelling just two of these loopholes would free up enough revenue to pay for a gold-plated national pharmacare plan. Imagine what we could do if we cancelled them all?

and services we spend it on—but that doesn’t warrant a special tax credit, according to the government. The ben- 1. efits of the dividend gross-up and tax credit are incredibly Pension income-splitting: concentrated: 91% go to income earners in the richest decile, $1.455 billion and half to the top 1%. The most regressive tax expenditure in Canada is pension income-splitting. It allows the higher income earner in a couple, which is almost always a man, to transfer some of their wealth to a spouse to lower his taxes. The benefits 4. of pension income-splitting are concentrated at the very Foreign tax credit for individuals: top, with 83% of the value of the expenditure going to the $1.66 billion richest income decile. If a person makes money in another country and pays tax on it to a foreign government, they get a credit toward their income taxes paid in Canada. This loophole, which is similar in intent to the dividend gross-up credit, does not have a 2. maximum value, but the amount claimed cannot exceed Employee stock option deduction: what that person would have paid in Canadian taxes on $710 million the same income. About 99% of this tax credit is disbursed to income earners in the top decile, and 100% of that amount goes to the rich- est 1% of Canadians. In essence, there is no benefit from this loophole to anyone making less than $215,000 a year, 5. while 77% of the benefit goes to men. Thankfully, the stock Partial inclusion of capital gains: option deduction was capped, although oddly not cancelled $8.25 billion outright, in the 2018 federal budget. This loophole applies to individuals who buy a stock or real estate at one price and subsequently sell it for more money, realizing a “capital gain” in the process, only half of which is taxed by the government. With 92% of the benefits going 3. to the richest decile—and virtually nothing for anyone Dividend gross-up and tax credit: earning less than $84,000—the concentration of benefits $5.65 billion from this expenditure is similar to that for the dividend This loophole gives shareholders a credit for the taxes their gross-up and credit. However, in this case the very richest corporation paid on profits and is spun as necessary to 1% of tax filers reap 87% of the benefits, making it one of avoid double taxation. You and I are taxed twice all the the most unequal in terms of income inequality. M time—first on our income, and then again on the goods 33 013

KATHERINE SCOTT The promise and reality of gender budgeting We need fiscal policiesand budgetary processes to work together if we are going to close the gap for women living in Canada.

ou can’t assume that gov- budgetary and financial management the rollout of new tools, training and ernment budgets affect policies. support. men and women the same The 2017 and 2018 federal budgets way—or other groups for included separate chapters on gender Action needed to strengthen thatY matter—since men and women equality, for example. These summa- gender budgeting processes... generally occupy different social and rized key challenges facing women, The federal government has intro- economic positions. Unfortunately, girls and gender diverse people and duced some of the infrastructure until very recently, governments have outlined related budgetary measures. needed to pursue gender equality. The done exactly that—developing poli- A Gender Results Framework was question is whether these efforts will cies and assigning funding to them in introduced in the 2018 budget that produce results. a gender-blind fashion. set gender equality goals and related On this score, as Helaina Gaspard Just asking how a policy could indicators to track progress. and Emily Woolner from the Institute have a different impact on men and This year’s federal budget presented for Fiscal Studies and Democracy write, women, as Finance Canada now does, the most detailed gender analysis to “the current parameters for GBA+ anal- is important. It strips away the idea of date. It included an update on Canada’s ysis are compelling at first glance but budget neutrality. Gender budgeting gender equality goals and a separate may be insufficient to have a real policy also generates the evidence needed to Gender Report that applied GBA+ to impact beyond a change in rhetoric.” inform policy and programs so that every budget measure. As a result of The government’s Gender Results they have the best chance to deliver this analysis, federal departments Framework remains “quite vague,” they on their stated goals, strengthening were able to develop mitigation add. Key objectives are identified along- public accountability and transpar- strategies to compensate and/or off- side recent government initiatives, ency in the process. set the negative impacts on women but there are no explicit connections When economic policies are made of 15% of the measures announced between the two, no global plan for based on this kind of gender-informed in the budget. In another 8% of cases, achieving desired outcomes. analysis, we have the opportunity to departments proactively took steps Action is needed to strengthen Can- reduce the number of women experi- to reduce barriers to women’s equal ada’s gender budgeting process—to encing violence and poverty. We have participation in the program. ensure that the purpose and goals of the chance to clear the way for women That said, gender-based budgeting, GBA+ are defined in concrete terms, to have equal access to decent work and GBA+ more broadly, remains a with clear metrics against which to and decent pay. work in progress. Canada has strug- evaluate progress. There also have gled to implement GBA+ across all to be enough resources in place to New gender levels of government and was called support the process or there is little budgeting legislation out in two reports of the auditor gen- chance of it eliminating the gender Canada’s new gender budgeting eral (in 2009 and 2015) for applying it disparities identified. legislation, passed in 2018, is an im- “incompletely” and “inconsistently.” portant milestone. It requires present A 2016 study from a parliamentary … and to tackle gender bias and future governments to apply a committee on the status of women in the tax system gender and diversity lens to existing corroborated these findings. The other side of this challenge, and proposed policy and program More recently, results from a 2018 as Kathleen Lahey so insightfully decisions. Although the government survey of public servants found that describes in her research (see inter- has carried out some gender-based fewer than half of departments and view on page 36), is what’s needed to analysis (known as GBA+ today) since agencies had a GBA+ plan in place, with effectively deal with the profound the mid-1990s, it has only recently ex- most departments saying they lack gender bias already baked into the panded the scope of its efforts to apply the internal mechanisms to apply one. fiscal foundation of government, i.e., to all memoranda to cabinet, Treasury Many more officials are familiar with the expenditure policies, budgetary al- Board submissions, departmental the concept of GBA+ but continue to locations and tax policies that impact plans and results reports, and now all struggle with implementation despite women every day. 34 This includes tax measures designed Top five tax expenditures for men Source: Are Tax Loopholes Sexist? The Gender Distribution of Federal Tax Expenditures y aid Macdonald A. in such a way that they disincentivize Men Women women’s paid work and keep women focused on unpaid work and care. Employee Stock Option Deduction ($755 million) The unequal division of caring labour already puts women at high risk of poverty. The inadequate supply of quality child care, home care and other Foreign Ta Credit For Individuals ($1,490 million) supports, in addition to tax penalties for second earners, compounds these risks exponentially, especially for Spouse or Common-Law Partner Credit ($1,620 million) those women from marginalized groups. The scale of these barriers is sig- nificant yet largely invisible. In the Registered Retirement Savings Plan: Total ($1,635 million) 2018-19 fiscal year, only 4.8% of the $27.6 billion in tax expenditures directed at supporting family caregiving (both Pension Income Splitting ($1,435 million) paid and unpaid) helped women offset the costs of hiring paid care while they 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% were in school or at work, according to research from Lahey. The CCPA’s own research similarly reveals the skewed character of the Top five tax expenditures for women Source: Are Tax Loopholes Sexist? The Gender Distribution of Federal Tax Expenditures y aid Macdonald A. tax system. Of the largest 42 tax Men Women expenditure programs, only eight (19%) delivered the greatest benefit to women. Women were the primary Eligible Dependent Credit ($960 million) beneficiaries of the eligible dependent credit, receiving nearly 80% of govern- ment spending. This is not surprising Child Care Epense Deduction ($1,335 million) as the credit is designed to assist single parents, most of whom are women. The second most beneficial Medical Epense Ta Credit ($1,715 million) tax expenditure was the child care expense deduction, which allocated about three-quarters of its benefit to women (again, no surprise, as this Pension Income Credit ($1,275 million) deduction must be claimed by the lower income partner). By contrast, the employee stock Age Credit ($3,620 million) option deduction provides 77% of its benefit to men and costs the federal 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% government $755 million a year. (Of the 100 highest paid CEOs in Canada last year, only three were women). The partial exclusion of capital gains their hours of paid employment in the we are going to advance, rather than delivers 75% of its benefits to men, process. stymie, gender equality. representing $6.6 billion in foregone Which is why getting gender budg- revenue to Canadians—a huge benefit The promise and reality eting right is so important. The federal for the wealthy at great public expense. In a world of concentrating wealth government has moved us in the right Women and girls lose out twice and privilege, refundable child care direction with its GBA+ legislation from the cumulative impact of these credits or even universal care strat- and new budgetary requirements. It policies. First when they lose access egies cannot on their own reduce seems less interested in correcting to essential public services due to deeply rooted structural barriers to the imbalances in our tax system. We insufficient revenues and withheld economic gender equality. Our entire need fiscal policies and budgetary federal funding, and then when they tax system needs to be revised, taking processes to work together if we are are forced the fill the gaps with many into account detailed distributional going to close the gap for women living hours of unpaid caring work, reducing gender and intersectional impacts, if in Canada. M 35 014

ERIKA BEAUSHESNE Canada can’t advance women’s rights without tax fairness An interview with Queen’s University professor Kathleen Lahey

athleen Lahey knew something like buying hockey sticks “Women in low-income countries the system was biased for their kids or child care so that the face very similar challenges to the against women from an second parent can go back to work, ones women face in Canada and the early age. they are probably going to choose U.S., including that they still do dispro- GrowingK up, the Queen’s Univer- hockey sticks.” portionately large amounts of unpaid sity law professor recalls enviously Lack of affordable child care re- work,” Lahey says. watching her father and brother “go mains one of Canada’s biggest barriers But in poorer countries revenues are off and do fun things like make model to economic fairness. scarcer, the data is harder to acquire airplanes,” while women performed “Right now, we have one of the least and governments are less likely to unpaid labour such as laundry and generous child care support systems care. Women may also have challenges caring for younger children. But it in the OECD,” Lahey points out. accumulating assets or legal rights to was a casual conversation with her A report released earlier this year property and business. mother one day that made her realize by the Canadian Centre for Policy The challenges are complex and the gender bias was also entrenched Alternatives offers similar advice for hard to fix. While increasing consump- in law. the government. It calls for a review of tion taxes, such as sales or green taxes, Her mother was a bookkeeper for the tax deductions, credits and loopholes does lead to larger revenues, the tax family business and a pretty good one that primarily benefit men over system becomes less redistributive too. So Lahey was surprised when she women, such as the employee stock when it comes to gender and low found out in high school that her con- option deduction and pension income incomes, she points out. tributions were never compensated. splitting. “There is no one magic bullet,” she “I asked her why, and she said, ‘I can’t The 2019 Feminist Scorecard pub- says, but a combination of quality get paid because then we would have lished by Oxfam Canada acknowledges health care, child care, equal income to pay more in taxes,’” Lahey recalls, some progress, including our country’s and authority would go a long way referencing the income splitting tax first gender budgeting, but highlights to foster economic and overall social measure in the U.S., where she grew the need to eliminate corporate tax well-being. up. “That was when I started noticing loopholes and regressive income tax There is some good news. Since how life broke down differently for structures. Lahey started out studying law and men and women.” While Canada has its work cut out gender, she’s noticed recently some It was also what inspired a career in for it, the outlook is grimmer in devel- tax fairness issues that weren’t main- academia and activism as Lahey went oping nations, where tax disadvantages stream, such as tax havens, beginning on to become an international expert against women are aggravated by a lack to capture more of the public’s interest. to the United Nations on gender and of revenue and resources. Activists can benefit from that, she tax issues. She has authored numer- suggests, by drawing the link between ous reports and books, and in addition wealthy corporations and individuals to teaching and advising governments, who abuse the system and inadequate sits on the board of the U.K.-based Tax revenues for women in international Justice Network. communities. Despite significant progress on other Whatever the approach, it’s clear women’s rights, many tax policies such Canadians need to do more to fix as income splitting or joint tax benefits the tax gender gap here at home and still support primarily men and keep around the globe. women focused on unpaid work such “We have a big complicated set of as child care. problems and we need as much advo- “Even the Canada Child Benefit is cacy as possible out there.” M structured in a way that proposes to THIS INTERVIEW ORIGINALLY APPEARED ON THE help families with low incomes, but WEBSITE OF CANADIANS FOR TAX FAIRNESS IN MAY. if that family has to choose between 36 015

JOHN ANDERSON Summer of digital discontent

acebook, Google, Apple, Amazon, Netflix and showcase older Canadian programming. Former Heritage other tax-avoiding internet giants were in the Minister Mélanie Joly’s deal with the popular streaming news a lot this summer. Much of the credit site, which included a non-binding promise by the firm to for this can go to Emmanuel Macron. Despite spend $500 million in Canadian programming over five pushbackF from big tech and U.S. President Donald Trump, years, has no commitment to French programming at all. the French president announced plans at this year’s G7 Had the federal government simply applied a sales tax summit to introduce a 3% tax on digital revenues. Trump to Netflix’s six million subscriptions in Canada it would only backed down after Macron agreed to pay back some have pulled in $500 million over five years. Facing pressure of these revenues once the OECD reaches a new agreement to rethink the arrangement, Joly’s successor as heritage for taxing digital giants over the next year. minister, Pablo Rodriquez, recently said the government In fact, Macron’s 3% tax, which was backed by the Lib- will change its policy toward digital giants—no matter erals in the election, is too meagre. It lets these super rich what an external panel reviewing Canadian broadcasting companies escape any real tax accountability. In Canada, recommends in January. for example, harmonized sales taxes hover around 13% With respect to online news the situation is just as dire. depending on the province. If we simply required the digital Some 70–80% of online advertising in Canada, including a giants to collect it on their domestic sales (which we don’t), majority of all federal government ads, now goes to Google governments would accrue four times what Macron wants and Facebook—sales and income that are, for the most to charge. part, tax-free for the companies. Google even nabbed a Prior to the election, the federal government had said it quarter of all advertising in any media in 2017. No wonder wouldn’t act until the OECD presents its digital plan, an Canadian newspapers are closing down, the latest being initial draft of which was expected in October. The problem the Quebec chain Capital Media, which had to be propped with this approach is that the OECD tax chief has admitted up by the Quebec government. Over 250 newspapers have there will be no “massive shift” in revenues, no “big losers closed in Canada over the last 10 years, with many others or big winners” from the plan. “Countries should relax a reduced to websites. bit on that one,” he said in mid-September. The advertising is merely following the eyeballs. And Some countries don’t feel like waiting. In fact, there would here is where lack of regulation becomes a much bigger have been no progress at the international level if individual problem. More and more people now get their news over countries hadn’t proceeded on their own, forcing some kind Facebook, WhatsApp, Google, YouTube, Twitter and Insta- of international co-ordination. Quebec and Saskatchewan gram. All these U.S.-based companies control what you see have applied taxes to imports of digital services, including (including news and advertising) and in what order using streaming subscriptions. There’s no reason why the federal closely guarded algorithms. government shouldn’t have moved forward either. In the broader sense of surveillance capitalism, which This has never been about just slapping a new tax on the Shoshana Zuboff has so brilliantly written about (see the digital giants. For Canada, the question is why we should May/June issue of the Monitor), all these digital giants, treat mostly foreign-owned big tech firms differently than untaxed and unregulated, know so much about everything every other Canadian company. A digital tax is about fair- we do and think that they can manipulate our data to better ness, but the implications of not taxing these companies control our lives for profit. With this increased control, go much further—affecting the news we consume, the our limited democracy—not just business practices—is strength of our cultural industries and even our democratic under increased threat. institutions. Canada and the provinces along with big cities have to U.S.-based social media and streaming services, which now react strategically. The old policy watchwords of regulation, include Apple TV+ and Disney Plus, dominate online content taxation and public ownership are still the best remedies. If in culture and in news. Yet none of them are required to abide we do not react in a hurry, like we should be reacting toward by minimal Canadian content and language rules that apply climate change, it may become too late at some point to to major broadcasters such as Rogers, Bell, Quebecor and safeguard our cultural protections and the many valuable, Shaw. These Canadian firms must put 5% of their revenues top quality industries and jobs that depend on them. toward new Canadian programming, for example. We cannot let the digital giants define who we are and Canada’s film and television producers and their viewers, where we are going as a country. M particularly in Quebec, are understandably frustrated that JOHN ANDERSON IS AN INDEPENDENT RESEARCHER AND CONSULTANT, AND Netflix does not have to produce new Canadian content or AUTHOR OF THE CCPA REPORT AN OVER-THE-TOP EXEMPTION. 37 016

JENNIFER ROBSON A progressive foundation, but so much more to do People with lower incomes need a say on tax reform

anada’s income tax sys- redistribution by generating revenues that could be put at some risk if they tem has a lot going for to support new investment in social can’t or don’t file a return. it. On balance, its rate programs. There can be merit to both For example, a low-income single structure is progressive. of these motivations. But either way, mother with two children could lose WhileC there are flaws in our system we shouldn’t lose sight of the effects as much as $13,000 if she doesn’t file a of self-assessment, such as underre- the tax system has (or fails to have) on tax return to renew her eligibility for porting of income or aggressive tax Canadians with low incomes. the Canada Child Benefit. In a study planning (to avoid taxes owing), most For many Canadians, the tax sys- underway with my colleague Saul Canadians seem to be motivated to tem can be more like a social service Schwartz, we estimate that 12% of comply with tax rules. What’s more, system. It delivers cash benefits such adult Canadians may not file an an- the costs of collecting income tax rev- as the GST credit and Canada Work- nual tax return and could be missing enues have been modest and stable for ers’ Benefit, for example. Through a out on important benefits as a result. several years, judging by the annual notice of assessment from CRA, the On the other hand, the tax and spending reports from the Canada system also helps people prove their transfer system isn’t doing much to Revenue Agency (CRA). We have a annual income so they can qualify help lower-income Canadians build good foundation to build from. for means-tested programs including any kind of liquid savings. Even in In recent years, calls for tax reform housing and daycare subsidies, home the best of social insurance systems seem to come either from a desire to heating rebates, and many others. In there can be gaps in coverage, and boost Canada’s competitiveness (in fact, working-age Canadians in the delays of weeks or even months before the hope that tax cuts will attract bottom quintile for market income benefits are paid to eligible applicants. more foreign investment) and get the vast majority of their income Emergency savings can make a world growth, or from a desire to increase from government transfers, income of difference to a family. Nest eggs, even small ones, are also essential to investments in things like training, education and the establish- Taxation, transfers and assets by income quintile ment of micro-enterprises that create Canadian economic families headed by a working-age adult (2016) Source: Autor’s calculations usin te Surey of Financial Security ulic se Microdata File Statistics anada new and long-run opportunities for income. The current tax system pro- Share of total income taes paid by uintile vides several incentives for household savings and wealth accumulation for

92.0% Median share of household assets in ta-preferred classes 80% these and other purposes, such as ex- Median share of household income from government transfers empting earnings in tax-free savings Share in asset poverty accounts (TFSAs), deductions for Share with $0 or negative liuid assets contributions to registered retirement 60% savings plans (RRSPs) and favourable 68.0% 66.2% tax treatment when RRSPs are used 60.4% 59.4% for homeownership or mid-career education. The thing is, lower-income 40% 49.6% earners don’t really have access to these incentives. It’s an upside-down system that rewards people who 34.7% 34.9% 20% already have money to save. Yet Canadians at the bottom can

21.3% face the double whammy of having 20.3% 18.2% 5.6% 4.6%

3.4% low income to cover ongoing expenses 2.7% 2.5% 14.3% 1.7% 1.8% 0.6% 0.3% 0.1% 0.0% 11.7% 0% 10.0% and a small or non-existent cushion Bottom 20% uintile 2 uintile 3 uintile 4 Top 20% to help them cover emergencies. Fully 38 59% of working-age families in the bottom only be possible if we also simplified the SIMPLIFYING THE TAX SYSTEM— quintile for market income have savings overall system, reducing the many assort- ONE T4 AT A TIME too low to cover even poverty-level spend- ed credits that demand self-reporting and ing for a month; 14% of families have $0 or self-assessment. Tax season can be stressful for negative levels of liquid savings. individuals and families who spend a lot of time—and money—filling in By contrast, working-age families in the Make emergency forms that could easily come to us top quintile have, at the median, just over savings real for everyone half of their total wealth in some form of Right now, the tax treatment of savings pre-filled by the Canada Revenue tax-benefitted asset and only a tiny share and assets offers multiple avenues for Agency (CRA). Tax agencies in of this group are asset-poor. This figure those with higher incomes to reduce their Norway, Denmark and Sweden does not even include pension assets, taxes owing by investing in certain kinds were first out of the gate to offer this which can be considerable, and does not of assets. For those with low or no tax lia- tax filing service, but other regions take into account preferential work- bility, these incentives do almost nothing including Chile, Spain and California ing-age tax deductions and tax planning to reward their savings. Worse still, claw- are coming on board. to reduce taxable income in retirement. backs on means-tested benefits such as The CRA has much of the information Research by U.S. economists Emmanuel the Guaranteed Income Supplement can it needs to get the job done for most Saez and Gabriel Zucman has inspired mean that low-income savers are severely Canadians: employment and earnings, interest in both the U.S. and Canada in penalized if they pick the wrong kind of location, banking details and family creating a new annual tax on the net asset for their modest savings. status. Tax filers receive a draft tax wealth of the very richest asset-holders. An income-tested and refundable return to review or update, change Though others have questioned its de- credit could provide an incentive to low- and add to. While it may not work sirability and feasibility, the simple idea er-income savers that would complement for people with more complicated of a wealth tax has opened a window of the existing tax savings offered to high- financial situations, it would for just opportunity to talk about broader issues er-income savers. If tied to a TFSA, which about everyone else. of tax fairness, and how tax and transfer still badly needs a lifetime contribution systems shape the financial security (or limit, a refundable credit would make it Beyond the time and cost savings, precarity) of Canadian households. easier for so-called small savers to build pre-filled tax forms would help ensure Here are a few examples of the kinds a bit of a nest egg to cover short-term everyone gets the benefits they’re of policy directions that could be brought emergencies or longer-term needs. entitled to, such as the Canada Child forward in any conversation about tax Benefit, Canada Workers Benefit, and Climate Action Incentive payments. reform. All of them have the potential Rationalize to make a meaningful difference in the non-refundable tax credits Lower-income individuals, who may financial well-being of lower-income If we can’t quite shake our collective love find it hard to file their taxes or pay a Canadians. of boutique tax credits, we can at least professional to do it for them, need look for opportunities to streamline these benefits the most. Federal Embrace automation the tax code where refundable credits investments in programs to help low- in the tax system would be more effective. For example, income earners with their taxes have In the 2018 federal budget, the gov- the non-refundable Canada Employment led to an increase in returns. Automatic ernment announced that the Canada Credit effectively provides a maximum filing would let government expand its Workers’ Benefit (formerly the Working $179 credit against federal taxes owing for delivery of benefits even further. Income Tax Benefit) would no longer need persons with employment income. But an application on top of an annual income the program costs roughly $2.5 billion per Not everyone likes it. The tax tax return. Instead, CRA would now au- year and has no clear impact on labour preparation industry including Intuit, tomatically assess returns for eligibility force participation. For the same amount maker TurboTax, has spent $6.6 for the refundable tax credit. A similar of money we could double the refundable million lobbying against government auto-enrolment measure has also been Canada Workers’ Benefit, encouraging tax filing in the U.S. Public solutions to introduced for the Guaranteed Income increased employment and reducing making tax time less stressful naturally Supplement payable to lower-income poverty among working-age Canadians. eat into corporate profits. seniors. When we talk about tax reform it can That shouldn’t stop Canada from These changes are important. But be easy to overlook lower-income Cana- adopting a Scandinavian-style moving to pre-filled tax forms or even dians, since they are less likely to be net tax-filing system. The Income Tax Act return-free filing would do far more to payers on personal income taxes. But is complex enough, with its numerous ensure that tax-filing is no longer an ob- the tax system is more than just a public loopholes and rebates. Canadians stacle to accessing means-tested programs revenue system: for many lower-income shouldn’t have to spend more of their and benefits. The transformation—from Canadians it is a key part of how they get precious money and time to file their self-assessed to government-assessed the income and benefits they need. They taxes when the government could tax-filing—could be extended to all Ca- need a voice in tax reform too. M easily do it for them. nadians, not just those with low incomes and simple returns. Of course, that would —Canadians for Tax Fairness 39 Prize, “for inspiring and am- in California are petitioning Austria and some French plifying political demands their universities to do cities, Germany has agreed for urgent climate action the same. / Newsweek / to outlaw the popular reflecting scientific facts.” Reuters / Environmental herbicide starting at the The three other award Health News end of 2023 and limit its recipients are Brazilian use before then. To date, Indigenous leader Davi 18,000 people have filed Kopenawa of the Yanomami To the rescue lawsuits against Monsanto, people, Chinese women’s the maker of glyphosate The good rights lawyer Guo Jianmei umbers of the critically (now owned by Bayer), after and Western Sahara human Nendangered Bagot a court found its Roundup news page rights defender Aminatou goat (pictured) are slowly product likely causes Haidar. / CBC News / increasing in the U.K. cancer. / Costco will phase Compiled by Reuters as a result of successful out the use of receipt paper Elaine Hughes breeding efforts. There coated with toxic BPA or are now as many as 300 BPS by the end of 2019. More sun, breeding pairs in the / Veterans at a medical Aiming high less meat country, some of the centre in Manchester, them living at educational Vermont are treating their ara Striker, a 14-year- n September, the Oslo institutions to “ensure PTSD with beekeeping. Sold from Warman, ICircle K gas station other students are able to Vince Ylitalo, a 57-year-old Saskatchewan, completed became the first in the learn from them and help vet who did two tours in her first solo flight and world to replace all its preserve these amazing Iraq, says it “helps me think landing this August, making pumps with electric car animals,” according to of something completely her one of Canada’s young- chargers. Electric vehicles animal practitioner Hayley different.” / The Zambia- est pilots. She learned account for 44% of all new Burkey. / With the passage based group Mama Buci, to fly with her father, a car sales in Norway, while of the Wildlife Protection meaning “Mother Honey,” bush pilot, and is now a traditional vehicle sales Act of 2019, California has placed over 90,000 qualified student pilot. “I’m are declining. / Global became the first U.S. state beehives on farms across hoping to fly float planes investment in renewable to prohibit commercial or the Zambian bush and now and bush planes,” she told energy capacity, excluding recreational trapping on pays between 5,000 to CBC. “Then hopefully I’ll large hydropower projects, both public and private 7,000 families to harvest move to big airlines like Air should reach $2.6 trillion lands. Also in September, the honey. / BBC / Los Canada or WestJet.” / Kelly by the end of the decade, California banned the Angeles Times / Fox News Shulman, a physics, math according to a new UN inclusion of wild animals in / Reuters / Environmental and computer science report, which points out state circuses. / Following Defence/ Associated Press teacher from North Bay, that fossil fuel subsidies are recent glyphosate bans in / Guardian U.K. Ontario, presented her slowing progress. / Over the Grade 12 physics class’s past decade, renewable ca- high-altitude balloon at pacity has quadrupled, with the NASA International solar energy increasing Observe the Moon event 26 times from 2009 levels. in Greenbelt, Maryland on China leads the way in solar October 5. Their “Moonshot investment, its $758 billion Mission” payload, launched worth of investment over 10 into space using a weather years far surpassing even balloon, included a mini second place United States Neil Armstrong holding ($356 billion). / As part of its a flag marked “50,” to plans to go carbon neutral, commemorate the moon Portugal’s 729-year-old landing’s anniversary. / University of Coimbra will More than a year into the stop serving meat for the global school strike move- first time in its history. ment #FridaysForFuture, Students at the university founder Greta Thunberg were consuming about 20 received the 2019 Right tonnes of beef per year—a Livelihood Foundation major source of green- Award, sometimes known house gas emissions. On as the Alternative Nobel hearing the news, students 40 PHOTO BY AMANDA SLATER (FLICKR CREATIVE COMMONS) International

ASAD ISMI Old money and new questions in AMLO’s Mexico

T’S BEEN NEARLY a year since the “leftist Against Free Trade (RMALC). “We do the average auto wage is currently just firebrand” Andrés Manuel López Ob- not understand why Lopez Obrador over $3/hour. rador (AMLO) took office as Mexican ratified this agreement right away “This $16 an hour wage rule does Ipresident, promising to end official without consultation with labour not make any sense,” he says, “because corruption and state-linked violence, unions and other affected sectors such the only reason car companies come redistribute wealth to the poor and as farmers, and without bargaining for to Mexico is to take advantage of the promote Indigenous rights. Shortly better conditions.” low wages.” into his term, AMLO famously declared Abundiz was in Canada at the end CUSMA does contain a clause that that neoliberalism is “dead” in his coun- of September for a speaking tour appears to be a victory for Mexican try—a four-decade-old elite consensus organized by the United Steelwork- workers. The agreement requires that appeared in real danger from the newly ers (USW), Common Frontiers, the Mexico: “Provide in its labour laws the elected National Regeneration Move- International Centre for Workers right of workers to engage in concert- ment Party (MORENA) government. Solidarity (CISO) in Montreal, and ed activities for collective bargaining But a series of economic policy choic- the Public Service Alliance of Canada or protection and to organize, form, es since then—not least of them the (PSAC). In an interview with him after and join the union of their choice, and quick Mexican ratification of the Can- his Toronto presentation, Abundiz tells prohibit, in its labour laws, employer ada-U.S.-Mexico Agreement (CUSMA), me he supports the president, “and we domination or interference in union or “New NAFTA”—have some of AM- brought him to power and also he was activities, discrimination, or coercion LO’s supporters wondering whose always opposed to NAFTA. We asked against workers for union activity side he is on. The president’s attempts the Mexican senate to hold hearings or support, and refusal to bargain to satisfy the country’s oligarchs on on CUSMA so that we could present collectively with the duly recognized one hand, and labour and Indigenous some of our concerns about its impacts union.” Implementation of this clause groups on the other, appears to have on labour. But there were no hearings.” would mean that non-democratic, moved MORENA to the political centre Those concerns, from the FAT and state-sanctioned “company” unions, rather than moving the country out others in Mexico, include problems which organize 75% of the unionized of its disastrous neoliberal quagmire. with the new deal’s labour chapter workforce, can no longer exist. As an economic nationalist, López and its provisions on the environment. However, CUSMA provides no Obrador has long opposed NAFTA and “The agreement allows mining and effective enforcement mechanism threatened to discard it if elected. So other companies to destroy the coun- to ensure this labour reform holds. it came as a surprise to many of his try’s environment without penalty,” he Mexican company unions are already supporters that Mexico was the first says. Many resource firms operating taking action to halt its implementa- country to ratify CUSMA, on June 19, in Mexico are based in Canada. But tion, while U.S. Democrats are pushing only seven months into his presiden- Abundiz is particularly worried about the Trump administration to strength- cy. Neither Canada nor the U.S. had the auto bargain reached in CUSMA, en the clause. ratified the “New NAFTA” when this which he calls a “disaster” for Mexico’s “Four hundred and thirty legal cases issue of the Monitor went to print. auto sector. have been lodged against the Mexican The Canadian federal elections and Under the rules of origin in the government by the corrupt corporat- the start of impeachment hearings “New NAFTA,” which must be met by ist unions to stop the implementation against President Trump make it even automakers in order for cars and car of the labour reforms contained in less clear when that might happen. parts to cross borders tariff-free, by CUSMA,” Abundiz explains. “Given “This fast-tracking is wrong and a 2023, 40-45% of all auto parts must be this, the United Autoworkers (UAW) mistake,” says Eladio Abundiz, national produced in factories that pay at least in the U.S. is very concerned that co-ordinator of the Authentic Labour US$16/hour. According to Abundiz, this the Mexican government does not Front (FAT in Spanish), a progressive will mean a greater share of vehicles have enough money to implement and independent Mexican union, and will be produced in the United States the labour reform. You can imagine one of the founding organizations or Canada, where the wage condition the Mexican state having to fight 430 in the Mexican Network of Action is already met, than in Mexico, where [expensive] cases in the courts.” 41 ópez Obrador’s rush to ratify “López Obrador The Mexican president’s “signature CUSMA and his disinterest in the infrastructure project” is the Maya Lconcerns of Mexican labour unions thinks that he can Train, a proposed 1,500-kilometre rail can be explained by his closeness to find the way to connection through Mexico’s Mayan the notoriously corrupt Mexican cor- heartland in the Yucatan Peninsula, to porate oligarchy that he periodically unify opposites— bring tourists to Indigenous villages. rails against. The president’s power- business and Construction on the route has already ful chief-of-staff, Alfonso Romo, is a started despite the absence of an case-in-point. labour.” environmental assessment—Lopez A millionaire business tycoon Obrador claims Mother Earth granted from the affluent northern city of him permission—and is scheduled Monterrey, Romo is the former head to conclude by the end of AMLO’s of VECTOR Casa de Bolsa, the largest six-year term. fund management company in Latin “This train is going to cross several America. In July, AMLO’s treasury southern states and disturb important secretary, Carlos Urzúa, resigned in the oil sector, it’s his emphasis on cor- protected areas and Indigenous com- spectacular fashion, sending a letter to porate investment that worries Isabel munities,” says Altamirano-Jiménez. the president in which he complained Altamirano-Jiménez, Canada Research The route will go through the only un- that Romo, “a man of the extreme Chair in Comparative Indigenous spoiled ancient forests on the Yucatan right” who “came to admire Augusto Feminist Studies at the University of Peninsula and put at risk endangered Pinochet” had more control over the Alberta and a member of the Indigenous species such as the black howler country’s finances than he did. Zapotec Nation from the Tehuantepec monkey. “The project is being put Romo’s power was increased again, Isthmus in Oaxaca, Mexico. forward without consultation with significantly, in February 2019 when “López Obrador came to power with native communities. The people have the president appointed him head of a lot of hope that things were going to been left out and for López Obrador’s a new Council for Investment Pro- change for the better and he had a lot government, it is business as usual.” motion, Employment and Economic of public support. But a lot of people in Growth. The purpose of the council is Mexico now feel that they have been let n spite of his apparent drift toward to stimulate economic growth through down by him as his many progressive the political centre, it would be the convergence of the private, public promises have been postponed,” she Ipremature to pass judgment on and social sectors working together. tells me. “The most important segment López Obrador this early into his gov- “This council is a key conjuncture of that feels alienated in this sense is the ernment’s term. Altamirano-Jiménez forces, a crucial point of union between Indigenous population. He made a lot notes the president took office “with a the private sector and López Obrador’s of promises to improve conditions for set of political and economic conditions cabinet,” explains James Cypher, pro- native communities, but so far the pol- already defined, including CUSMA. So fessor of economics at the Autonomous icies he has been pushing involve more even if he wanted to implement some University of Zacatecas in central Mex- corporate development on Indigenous of his promises, it would not be that ico. “Romo comes from old Monterrey lands.” simple to do so.” money…and the Monterrey capitalists For Altamirano-Jiménez, the pres- Ratifying the “New NAFTA” negoti- have been pushing a very right-wing ident has failed especially to restrain ated by his neoliberal predecessor had ideology since [the 19th century].” Romo mining companies whose activities one benefit of allowing the Morena is a strong believer in private enterprise have harmed many Indigenous com- government to move on to other pri- and has said he wants to make Mexico munities in Mexico. orities. AMLO inherited an economy “a paradise for investment.” “López Obrador promised that the that has been ravaged by 40 years of “López Obrador thinks that he can laws around mining activities would be corrupt and violent right-wing rule; find the way to unify opposites—busi- revised in order to force mining compa- no president could be expected to ness and labour,” Cypher continues. nies to respect Indigenous rights and reverse the damage in six years. But “Much of his intellectual framework protect the environment, but that has according to Cypher, the president’s comes from Lázaro Cárdenas, Mexico’s not happened. Instead he is pushing balancing act—between supporting President from 1934 to 1940. Cardenas for corporate investment, particularly business and workers—is unlikely to was able to walk that fine line when in southern Mexico where most of the bear fruit. he often had Mexican business in his Indigenous population lives. We see “No leader has been able to reconcile pocket and he often was opposed to López Obrador’s contradictory stance, the opposed interests of workers and Mexican business, but he got results.” which advocates on the one hand capitalists as López Obrador is trying Cardenas is known for nationalizing respect for Indigenous rights and on to do,” he tells me, adding it is easy to Mexico’s oil industry and implement- the other hand pushes for corporate imagine a scenario where the president ing agrarian reform, for example. development, with talk about making goes in one direction and the oligarchs While López Obrador also hopes some areas free investment zones with split the other way. “The situation in to prioritize a state-run expansion of no official regulation.” Mexico is very volatile.” M 42 Feature

STUART TREW RAINFOREST ACTION NETWORK From “Teamsters and Turtles” to the TPP Twenty years after the Battle in Seattle, global justice activists consider the impact, evolution and future of neoliberal globalization

HE BATTLE OF SEATTLE, a 50,000-strong A globe-spanning anti- or alter-glo- on Investment (MAI), a plan to protest of the World Trade Or- balization movement scored an internationalize the ludicrously an- ganization meeting in that city impressive win in Seattle, delaying ti-democratic investor-state dispute Tin November 1999, united labour the introduction of a new negotiat- settlement process rich countries were unions, the environmental movement, ing mandate at the WTO and putting forcing into bilateral investment trea- Indigenous communities and social jus- corporate elites and their government ties with the Global South. Two years tice activists from the Global North and backers on the defensive. The year after Seattle, an equally spirited and South as few issues had or have since. before, the same movement had more brutally policed alter-globaliza- For a time, it looked possible to stop defeated the Multilateral Agreement tion protest in Quebec City against the and roll back the neoliberal ideology– Free Trade Agreement of the Americas fuelled, corporate-dominated version of (FTAA) would throw those talks per- globalization that was being stealthily manently off-kilter. codified into the WTO agreements and Protestors hang a flag from Yet for all this effort and global soli- regional deals like NAFTA. Another a construction crane in downtown darity, the corporate juggernaut moved world seemed eminently possible, and Seattle in protest of the relentlessly forward. Plans to negoti- given the danger to our planet, abso- November 1999 World Trade ate new WTO agreements covering lutely necessary. Organization conference. virtually everything governments do 43 to regulate the economy would stall. But and the banning of hormone-treated many countries simply included chapters meat, among other public policy issues. on these issues—like the functioning of After the collapse of the MAI state monopolies, local government pro- negotiations in 1998, corporate lobbyists curement, strict limits on environmental seized on the planned WTO “Millennium rules, and longer and broader monopoly Round” as their best bet to further codify patent protections—in bilateral and and entrench neoliberal disciplines. regional deals. Like other rich countries, But the protests, massive publicity, and Canada walked away from post-2001 SCOTT SINCLAIR renewed resistance from developing efforts at the WTO to make development, he protestors understood that global countries stymied that agenda, making not corporate profits, the foundation and corporate elites had big plans to lock the Battle of Seattle one of the most priority of global trade rules. Instead, con- in restrictions on democratically effective and iconic alter-globalization secutive federal governments continued elected governments through an mobilizations ever. to foist the NAFTA model onto poor and Texpanded WTO, and that this agenda had middle-income countries while jumping Unfortunately, the corporate to be exposed and challenged. Powerful into anything-but-progressive mega-re- globalization agenda found a new outlet intellectual property rights blocked gionals like the Trans-Pacific Partnership in bilateral and regional free trade access to affordable medicines, while (CPTPP) and Comprehensive Economic agreements (FTAs), which proved harder pro-market services rules threatened and Trade Agreement (CETA) with the for social movements to fight. The U.S. to commercialize public services. New European Union. and EU began aggressively pursuing standards-setting codes restricted The financialization of most areas of bilateral FTAs. Soon, other countries and governments’ right to regulate to protect public policy—another gift of the neolib- trading blocs followed suit, resulting in health and the environment. But before eral era—has also continued apace since the famed “spaghetti bowl” of bilateral the Seattle protests, the public and even November 1999. Privatization of public and regional agreements. many elected officials had little idea health, water and other social services just how intrusive the WTO’s new legal Social movements and progressive and infrastructure; integration of public framework could be. governments had some wins, for example pensions with the stock market; ever defeating the planned FTAA. But like- shrinking corporate tax rates; the co-op- That veil was lifted in Seattle. By then, minded conservative and neoliberal tation of environmental and consumer a critical mass of developing countries governments forged many smaller protections by self-regulating industry had realized how badly their interests deals that typically included “WTO-plus” lobby groups; and near total corporate had been sidelined. Public attention services, investment and intellectual control of food are just a few of the visible and concern had also grown because property provisions. This patchwork of consequences. of controversial WTO rulings affecting agreements tied the hands of future To commemorate and consider the conservation of sea turtles and dolphins, governments, interfering with the ebb impacts of Seattle—and the destructive and flow of democratic politics between trade model the protests tried to stop— left and right. The subsequent explosion the Monitor asked activists who were of investor-state disputes also took many and are still part of the global justice unawares. movement the following three questions: Thankfully, the world has now woken up 1. What were anti- or alter-globalization to the unacceptable threats posed by activists right about? investor-state dispute settlement (ISDS), 2. What did they fail to anticipate about and new global social movements are the WTO or the agenda behind it? making headway in campaigns to reverse the damage and eliminate it. The future 3. What does the future look like for of the WTO is far from bright. It has been the WTO or the corporate globalization largely sidelined as a negotiating forum. project more broadly? The Doha “Development” Round is Here’s what they told us. deadlocked because of deep, unresolved divisions between developed and developing countries. Corporate lobbyists haven’t given up on using the WTO as their tool. The failed Trade in Services Agreement (TiSA) talks were an attempt to complete the unfinished GATS agenda, by doing an end run around developing countries. In the current discussions on e-commerce,

44 ROBERT SORBO, REUTERS Even before the to regional and bilateral trade and investment agreements. I would say that outbreak of the our success in exposing the corporate current China- agenda of the WTO pushed that agenda underground where it was harder to fight. U.S. trade wars, a Governments stopped trying to convince new trend toward us all that trade deals were good and turned them over to their bureaucracies deglobalization MAUDE BARLOW and away from the public eye. of the world e got that the WTO was (to One exception to this was the Multilateral economy was that date) the ultimate venue Agreement on Investment (MAI), a sort created to deliver the promise of mega version of investor-state dispute evident. of economic globalization, settlement (ISDS) first proposed to the Wnamely, to free markets from government WTO. When many developing countries interference and allow global capital balked, the MAI was shunted over to the to set the rules of trade, finance and OECD where it was taken for granted it commerce. We got how the WTO then would pass without notice. However, a would pose a major threat to the whole great coalition that had first formed to concept of public services, to laws and fight the WTO came together to defeat regulations protecting human health and the MAI—a rare and true win for our corporate lobbyists continue to pursue the environment, and to workers’ rights. movement. Alas, victory was brief, as ISDS their narrow commercial interests while Hence the importance of “Teamsters and is now embedded in over 3,500 bilateral paying lip service to concerns about Turtles, Together at Last.” We also got the investment agreements and many data privacy, consumer protection, and need to form international alliances to regional trade deals. negative impacts on local economies and fight the WTO, as neoliberal policies were the global climate. I am actually hopeful about the already creating deep economic divisions possibility for a new narrative around Hardball tactics by the U.S., which is between and inside nations. international institutions and global blocking appointments to the Appellate In concentrating on the WTO (and I governance. The 30-year promise that Body, threaten the WTO’s main role as was present and protesting at all the economic globalization would lift all a dispute settlement forum. By the end ministerial meetings from Seattle to boats has proven to be a contemptible of this year, dispute settlement may Hong Kong), we failed to understand how lie, with three-quarters of the world’s grind to a halt. More fundamentally, the powers that be slipped sideways—to working age population now forming even before the outbreak of the current get around the resistance we and many the precariat—part-time workers with China-U.S. trade wars, a new trend of the countries of the Global South no benefits or security. As well, people toward deglobalization of the world had mounted—and turned instead around the world know that uncontrolled economy was evident. With the world’s corporate-led growth has led to the biggest trading powers ignoring the Outside the WTO conference in Cancun, climate crisis that threatens all life on WTO in favour of unilateral threats and Mexico in September 2003, Oxfam Earth. The sides are being clearly drawn retaliation, others may begin to question lampooned G8 leaders including and the lies exposed. In my view, the WTO their own compliance, especially when Canadian PM Jean Chrétien (far right) is a discredited institution ready for the that involves defending their food safety for casually enjoying the proceeds dustbin of history. A new day is waiting. or climate-change reduction policies. of subsidized surplus agricultural MAUDE BARLOW IS VOLUNTARY CHAIRPERSON OF THE The overreach and corporate bias of WTO production as food trade impoverished COUNCIL OF CANADIANS AND THE AUTHOR, MOST RECENTLY, OF WHOSE WATER IS IT ANYWAY: TAKING rules and rulemaking was exposed by Global South farmers. WATER PROTECTION INTO PUBLIC HANDS (ECW PRESS, the Seattle protestors for all to see. Two ANDREW WINNING, REUTERS SEPTEMBER 2019). decades later, if a reconstituted WTO is to have any relevance or positive role in a new, more multipolar world, it will have to finally heed those concerns.

SCOTT SINCLAIR IS DIRECTOR OF THE TRADE AND INVESTMENT RESEARCH PROJECT AT THE CANADIAN CENTRE FOR POLICY ALTERNATIVES AND THE AUTHOR OF MULTIPLE BOOKS ON THE WTO, GENERAL AGREEMENT ON TRADE IN SERVICES (GATS) AND CANADA’S FREE TRADE AGENDA. HE RECENTLY CO- WROTE AND EDITED AN INTERNATIONAL REPORT ON ALTERNATIVES TO THE CORPORATE TRADE MODEL CALLED BEYOND NAFTA 2.0, WHICH IS AVAILABLE ON THE CCPA WEBSITE.

45 of global corporate rule was sound and correct. If I disagree with my colleagues about anything, it is that I believe the corporate agenda was essentially completed in the mid 1990s, with a global blanket of bilateral investment treaties (BITs) having been woven to compliment the STEVEN SHRYBMAN “trade” deals. Successive proposals for ANNIE LEONARD believe that Seattle did represent a further liberalization were essentially rotestors were right that the WTO’s turning point. Not primarily because unnecessary, at least legally, and in many attempt to launch the Millennium civil society groups showed up in ways were simply a make-work project Round of negotiations in Seattle was numbers, but because for the first for trade bureaucrats (public and private) a corporate-driven attempt to shred Itime since the General Agreement on whose numbers had greatly expanded Phuman rights, environmental standards, Tariffs and Trade (GATT) was founded in between 1986 and 1995. What gaps still public health policies and the rights of 1947, developing countries (the group existed in the formal framework were developing countries, while weakening of 77) were reasonably united in their being readily filled by the tribunals national sovereignty and democratic opposition to further liberalization. The “applying” the rules. decision-making. In short, we were right fraud of the false promises, lies, and to ensure that the ministerial conference What I believe we have seen more bulldozer tactics that allowed the WTO to ended with the suspension of the clearly since Seattle is the play of market be born had become painfully apparent in planned deliberations. power that has always moderated the the five years prior to Seattle. influence of international commercial, Looking back, many of us might not That said, civil society groups, mostly investment and trade law. That explains have fully realized at the time how from Canada, the United States and the why, for example, investor-state dispute likely it was that if we managed to Third World Network played a key role settlement (ISDS) tribunals never disrupt the negotiations for a while, in providing developing countries with find against the U.S., and why China the negotiations would not reach a critical analysis and intelligence, and by can ignore the intellectual property successful conclusion. There were providing moral support, including when provisions of the TRIPs agreement. certainly indications going in that the people showed up in large numbers in agenda was quite ambitious. USTR (the On the other hand, I think we are still Seattle. I believe the community had United States Trade Representative) and failing to grasp how the globalization a pretty solid understanding of trade other industrialized country delegations, of food systems has become the single liberalization and the WTO regime by as well as the WTO itself, went in with a biggest driver of increased greenhouse 1995. And our critique of the regime long list of expectations that reflected a gas emissions. Left to run its course, we as having codified—having legally kind of hubris. What they may not have will not survive the development model entrenched—the fundamental elements expected was that many chapters of the entrenched by the WTO, but it is very agreement (e.g., services) covered so difficult to see any means of escape. many sectors that it ignited opposition But as the Fugs instruct us, in their from many different parts of society that Refuse to Burn-Out album, “Party, Party, were represented in the streets, in teach- Party till the Gloom goes away.” But ins, etc. The WTO itself unthinkingly which way to the party? strengthened our ability to mobilize the

STEVEN SHRYBMAN IS A PUBLIC INTEREST LAWYER WITH massive protest that resulted. GOLDBLATT PARTNERS AND AUTHOR OF THE WORLD TRADE ORGANIZATION: A CITIZEN’S GUIDE (LORIMER, Meanwhile, at the time we were not aware 1999). HE HAS BEEN AT THE FOREFRONT OF SOME OF THE of how fragile the negotiations were. The I think we are MORE IMPORTANT PUBLIC POLICY AND LEGAL BATTLES TO DEFEND AND PROMOTE THE PUBLIC INTEREST IN THE draft ministerial declaration reflected still failing to FACE OF CORPORATE GLOBALIZATION AND NEOLIBERAL POLICIES OF PRIVATIZATION, DEREGULATION AND FREE many tensions and serious differences grasp how the TRADE. between industrialized nations and the Global South, many of which would be globalization of difficult to resolve in just a few days. On food systems top of that, the negotiating process was essentially designed to marginalize or has become the ignore poorer nations. This created a single biggest dynamic that contributed to the failure. driver of increased It seems like corporations and neoliberal free-traders have learned little from greenhouse gas Seattle, except to take measures emissions. to remove themselves further from 46 accountability and scrutiny. The decision U.S. and EU) to the prior commitments of to locate their next (post-Seattle) summit no agricultural subsidies, no protectionist in Doha is an obvious example. measures or unilateral sanctions; and the resistance mounted against going ahead Although the WTO has taken a back as is with the pending issues of trade seat, it is still part of a process that rather than a development agenda. has continued to push for an agenda largely designed to favour multinational We did not foresee, nor could we corporations and investors. So far, have guessed, the great impact that regional agreements like the Trans- ALEJANDRO VILLAMAR CALDERÓN the unusual growth in academic Pacific Partnership and its successor eattle viewed with the benefit of and intellectual criticism focused CPTPP (which excluded the U.S.), as well hindsight can be considered to on neoliberal political/ideological as other plurilaterals (like TiSA and the be a first victorious battle against dogmas—as reflected in the multilateral Environmental Goods Agreement) and the transnational corporate and regional agencies of the UN system, bilateral negotiations, have included Sagenda in the WTO. It was made and even in the mainstream media— many of the same principles and WTO possible by a convergence between the would have. Although we knew about language, even as the emergence of demands of an incipient but very active and fought against NAFTA’s neoliberal nationalist leaders has put parts of the transnational citizens’ movement and agenda, and had in the months preceding agenda on hold. the resistance displayed by a majority Seattle succeeded in stopping the other of the governments in underdeveloped major part of the corporate pincer, Companies still have unparalleled countries. the MIA, most in the social movement influence over national trade authorities, did not seem to anticipate either the so that when leaders like Trump claim Though apparently a social movement proliferation of parallel bilateral and leadership in effecting long-standing of organizations with very diverse regional agreements, or the so-called demands of civil society, like eliminating profiles and different experiences, as plurilateral agreements, all of them the NAFTA investor-state regime, it’s well as sometimes divergent demands, tactical maneuvers in the service of not surprising that the new agreement it nonetheless had a binding glue in constructing a global corporate agenda. (USMCA or CUSMA) ends up riddled with the phrase “Fair trade, not free trade.” exemptions for the fossil fuel industry, Ecological demands symbolized by Despite being aware of the importance while other proposed changes (e.g., turtles, dolphins and forests amounted to of the need for the social movement to NAFTA’s intellectual property rules an explicit and systemic rejection of the to act in unison at a global level while for pharmaceuticals) would only make WTO: “No WTO,” “Power to the people,” simultaneously working to build itself things worse. “Global Resistance.” These and many and expand, we did not grasp the more slogans showed that we all fit in as complexity in needing to address global Whether global (WTO), plurilateral, part of the protest. as well as regional diversity in political regional or bilateral, no matter what form, and ideological experience. Which, it the legitimacy of any agreement will be It was a victorious battle, which made turns out, was a necessary factor in being questioned so long as the process: a) visible on a worldwide scale the refusal effective at neutralizing or overcoming shuts out public interest voices while to buy in to neoliberal policy, with its the transnational agenda over the including corporate lobbyists in secretive embedded ideological messaging, while subsequent two decades. consultations; b) fails to acknowledge rejecting the structure of the WTO as a commitments established by the Paris global institution. This struggle made Traditional multilateral, global or Agreement on climate, the 2030 Agenda evident the political possibility that regional institutions including the WTO for Sustainable Development and its 17 mass mobilization, despite the brutal have displayed different variants of Sustainable Development Goals, and police repression that even affected dysfunctionality in responding effectively other environmental and human rights government representatives, could cause to the crisis brought on by the current accords; and c) includes unaccountable the failure of the official summit. It was a neoliberal and transnational capitalist tribunals (ISDS) that prioritize the one battle in a long war that is not over. model. Here we are speaking in terms of interests of investors and transnational geopolitical, socioeconomic/financial, Even though international groups were corporations. environmental, global, regional or in close contact with local organizers, national crises, as well as about calls ANNIE LEONARD IS THE EXECUTIVE DIRECTOR OF we could not have anticipated what GREENPEACE USA, WHERE SHE BEGAN HER CAREER for change demanded by the majority of IN 1988. HER FILM, THE STORY OF STUFF, BLOSSOMED proved to be a determining political social actors, and even by the interests of INTO THE STORY OF STUFF PROJECT, WHICH WORKS co-factor, that being the strength of TO EMPOWER PEOPLE AROUND THE GLOBE TO capital and its transnational class. FIGHT FOR A MORE SUSTAINABLE AND JUST FUTURE. the intergovernmental contradictions LEONARD CURRENTLY SERVES ON THE BOARDS OF WALLACE GLOBAL FUND, BEN & JERRY’S ICE CREAM, and the potential for resistance by Trump, his trade representative PUBLIC CITIZEN, AND THE DEMOCRACY INITIATIVE, underdeveloped countries. These Lighthizer, and some other U.S. AND HAS PREVIOUSLY SERVED ON THE BOARDS OF THE GRASSROOTS RECYCLING NETWORK, GAIA, THE countries, inside the WTO meetings, were lawmakers have been working with ENVIRONMENTAL HEALTH FUND, GLOBAL GREENGRANTS aware of the negative impact stemming the European Union and Japan to INDIA, GREENPEACE INDIA, AND THE INTERNATIONAL FORUM ON GLOBALIZATION. from the official “agreed upon” rules; the pressure the WTO and other institutions noncompliance by rich countries (the to unilaterally break the fundamental 47 rules found in international agreements activist, I lost faith that if we were to and treaties. In the WTO, using China, inherit the reins of power that we would Mexico and other countries as a do things differently…. We didn’t grapple pretext, those actors aim to end the with how to navigate power in gentler, fundamental principle of recognizing the more humane, more psychologically diversity of development represented by sophisticated ways, and this was also part common agreements with differentiated of the movement’s undoing. responsibilities. We need to rebuild collective power The future of the WTO falls in between, ANNAHID DASHTGARD structures. But rather than just a on the one hand, the geopolitical clash e were right about the increasing single movement focused on a trade between a declining block that falls back handover of power from elected organization like the WTO, we need to to false nationalism and an authoritarian governments to corporate link many smaller, disparate movements and imperial unilateralism—one hands. We’re seeing this now in together. The anti-corporate globalization that seeks to destroy the principle of Wthe active denial of the climate crisis movement professed to be representative negotiation, agreement and multilateral by governments (in Ontario, the U.S., of all levels of society, but the reality is action—and, on the other hand, the new etc.) that are able to remain legitimate that it was overwhelmingly white people, and old blocks made up by the majority somehow despite pandering to business driven by middle-class young activists of underdeveloped countries working to interests over the health of our society from academic backgrounds. maintain the advantages of multilateral and its future occupants. The question is, how do we push back trade regulations. Overall, there is more general public against increasing corporate hegemonic While the ongoing strategy undertaken distrust of corporate interests because powers by linking Black Lives Matter, Idle by the old empires and by transnational of Seattle, but the movement got cut No More, the environmental movement interests is and will continue to be to off at the knees by the 9-11 “terrorist” and migrant justice, for example? Part pressure, to threaten, and to punish, this conversation, before we had the chance of the answer lies in change-makers approach is being increasingly resisted. to really protect key democratic rights doing more inner work to remain humble The enormous challenge to be met by from encroaching corporate capitalism. enough to remember that not a single underdeveloped nations and their allies one of us, nor a single movement, has the As a Western democratic movement, we in furthering a winning formula for a new power to recreate the future we all dream failed to strategize around the pushback global arrangement can be made possible of. We need to do it together, through of state powers. The escalating police only if the emerging policies are based on relationship, one small victory at a time. response at civil protests was something real support flowing from a new agenda I write about much of this in my new many, especially younger activists built by the social sectors through memoir, Breaking the Ocean. (including myself!), were unprepared for. collective action, and by using the new It was traumatizing, and after 9-11 we lost The reality is that we need each other, global instruments of communication, all focus and ability to push back. and we have to fight to stay connected. co-ordination and mutual support. Because the core impact of oppression In the activist world, we also didn’t pay There is a need to recoup an is the breakdown of relationship—and enough attention to relationship as a understanding that a globalized social because of this, our ability to have strategy. We recreated the pecking order movement is required in order to rewrite widespread impact. that exists in society, except in activist these rules. But it must be a globalized circles it was about how sharp one’s ANNAHID DASHTGARD (MED) IS A RENOWNED social movement acting in unison, while AUTHOR, CHANGE-MAKER AND CO-FOUNDER OF critique is of capitalism or patriarchy, ANIMA LEADERSHIP, AN INTERNATIONAL CONSULTING respecting diversity and differentiated rather than how well-dressed one is. Same COMPANY SPECIALIZING IN ISSUES OF DIVERSITY AND responsibilities, for it to be decisive in INCLUSION. PREVIOUSLY SHE WAS A LEADER IN THE beast, different clothes. As a younger ECONOMIC GLOBALIZATION MOVEMENT, RESPONSIBLE defining the future for the WTO. FOR SEVERAL NATIONAL POLITICAL CAMPAIGNS AND FREQUENTLY REFERRED TO AS ONE OF THE TOP ACTIVISTS ALEJANDRO VILLAMAR CALDERÓN IS A MEXICAN TO WATCH IN THE 1990S. HER FIRST BOOK, BREAKING SOCIAL POLICY ANALYST AND ACTIVIST WITH A DEGREE THE OCEAN: A MEMOIR OF RACE, REBELLION AND IN BIOLOGY AND A PHD IN DEVELOPMENT POLICIES. The militarized police presence in Seattle RECONCILIATION, WAS PUBLISHED BY HOUSE OF ANANSI A FORMER UNION LEADER AND RETIRED PROFESSOR, THIS AUGUST. DASHTGARD LIVES IN TORONTO WITH HER HE ALSO WORKED FOR 16 YEARS AS A NATIONAL was shocking to many, but it became the PARTNER AND TWO CHILDREN. PARLIAMENTARY ADVISOR. HE IS A FOUNDING MEMBER norm for future trade negotiations. OF THE MEXICAN ACTION NETWORK ON FREE TRADE STEVE KAISER, FLICKR CREATIVE COMMONS (RMALC), AND THE AUTHOR AND CO-AUTHOR OF NUMEROUS TRINATIONAL AND NATIONAL ANALYSES OF NAFTA AND OTHER REGIONAL AND BILATERAL TRADE AND INVESTMENT TREATIES.

48 GOPAL DAYANENI here is no question that we got a bunch of things right! First, I think this was one of the most visible expressions of a broad intersectional Tmovement that demonstrated the inextricable relationship between social inequity and ecological erosion—that they share root causes and common solutions—and that corporate concentration, deregulation, privatization, enclosure and militarism must be confronted by a broad alliance of diverse forces. I think we were also right to recognize that our outside actions could and should give support to forces on the inside to take bolder action, including many of the Southern states. I want to be clear that intersectional politics and analysis greatly pre-date this moment, of course, and were embodied by the environmental justice movement, Indigenous rights and sovereignty (Top) Indian farmers shout slogans contraction and collapse. This is not movements and radical feminist and against the WTO during a protest in something to necessarily celebrate. racial justice movements. But I do New Delhi, September 1998. (Above) Collapse sucks. And I while I see new think this was an important moment Rally in front of the Philippine senate forms of organizing emerging to help to visibly express that politic in a mass building in downtown Manila, March communities build resilience and the mobilization. I also think that after 9-11, 1996, to protest the WTO and Asia-Pacific capacity to navigate the collapse, I think the shift from anti-globalization to anti- Economic Conference. we have to put much more energy in that war as the container for a global uprising OMEO RANOCO (TOP) AND SUNIL MALHOTRA, REUTERS. direction. against corporatism and militarism was We have to focus on living into the very important. world we need—the daily practice of I think we did not have a clear enough self-governance and meeting peoples’ understanding of the role of technology needs. We have to focus on disrupting One of the biggest challenges, I think, in enabling corporate concentration and ever expanding enclosures, particularly was that we didn’t necessarily have a way the destruction of living systems and those enabled by finance and technology, to take the momentum from mobilization life-ways. I think the rapid development by creating new commons—of land and and turn it into stronger organizing. We of certain technologies, the role of capital in particular. didn’t necessarily have the infrastructure M these technologies as new platforms of to capture the excitement and energy GOPAL DAYANENI IS A CO-FOUNDER OF THE OAKLAND, corporate control and the ways in which CALIFORNIA–BASED MOVEMENT GENERATION JUSTICE and channel it toward the hard and & ECOLOGY PROJECT, A FOUNDING MEMBER OF THE they would fundamentally alter the important work of everyday organizing. CLIMATE JUSTICE ALLIANCE, AND CURRENTLY SUPPORTS nature of the struggle is something most MOVEMENT-BUILDING ORGANIZATIONS THROUGH HIS WORK WITH THE ALLIANCE, ETC GROUP, AND THE of us missed at the time. I think we knew With respect to the future, the endless CENTER FOR STORY-BASED STRATEGY. GOPAL TEACHES that the WTO was not going to be the end frontiers of extractivism demanded by IN THE URBAN SUSTAINABILITY PROGRAM AT ANTIOCH UNIVERSITY IN LOS ANGELES, WHERE HE WAS THE FIRST in and of itself, but I don’t think we were capitalism have managed to infringe CLIMATE JUSTICE FELLOW (2014–2016), AND IS A TRAINER ready for the shift from globalization/ upon every aspect of our lives and the WITH THE RUCKUS SOCIETY. HE LIVES IN OAKLAND IN AN INTENTIONAL, MULTI-GENERATIONAL COMMUNITY OF poverty-alleviation to climate (UNFCCC) living world. However, the limits of a NINE ADULTS, EIGHT CHILDREN—INCLUDING TWO OF HIS as the container for a corporate agenda. finite system will inevitably lead to a OWN—AND A BUNCH OF CHICKENS.

49 Feature

SABRINA WILKINSON Monetizing the social network What risks does Facebook’s Libra currency pose to the public?

N RECENT YEARS, Facebook has made the their “shared concerns about the pri- “Facebook’s involvement is par- daily news more regularly than at any vacy risks posed by the Libra digital ticularly significant, as there is the time in its 15-year history. Very rarely currency and infrastructure.” The potential to combine Facebook’s vast have these reports been positive. Priva- European Commission is looking into reserves of personal information with cy scandals (like Cambridge Analytica, whether the cryptocurrency reflects financial information and cryptocur- Ifor example), regulatory non-compli- anticompetitive behaviour. The U.S. rency, amplifying privacy concerns ance and algorithmic bias are just a House Committee on Financial Ser- about the network’s design and data few of the issues that have engulfed vices will continue its examination of sharing arrangements,” said Elizabeth the social media company, heightening Libra when Congress resumes this fall. Denham, U.K. Information Commis- concerns about the risks the firm poses These inquiries are warranted and do sioner, in August. Denham further to democratic institutions. well to highlight the threats prompted noted the lack of detail surrounding It might be a surprise to some, then, by the social media company’s recent how the association plans to handle, that Facebook chose this June to efforts in the financial services sector. secure and protect user information. formally introduce a cryptocurrency Indeed, Facebook’s entrance into this Anxieties about the crossover of called Libra. Beginning in 2020, con- market poses real risks to consumer financial and personal data are es- sumers will be able to pay for goods and privacy and financial regulation. Not pecially pertinent because Facebook services through the Libra app or over least, Libra has the potential to provide has historically shared information Facebook Messenger or WhatsApp. even more power to a firm that has between its affiliated platforms. -In That includes individuals who don’t repeatedly exploited the public trust. stagram and Facebook accounts, for have a bank account. According to a instance, are automatically linked in white paper released alongside the order to, amongst other things, target announcement, the effort promises to The separation users with more accurate personalized “[t]ransform the global economy [so] of personal and financial ads. It’s impossible for users to de-link people everywhere can live better lives.” The emergence of Libra raises a num- their accounts. At the same time, the Built on blockchain and backed by a ber of privacy concerns related to the social media company has announced reserve of assets, Libra will be governed blending of personal and financial data. plans to integrate the chat platforms by the independent not-for-profit Libra In contrast to regular financial service in Facebook Messenger, WhatsApp Association based in Geneva, Switzer- providers, which deal predominantly and Instagram, which some have sug- land. Association member organizations with financial information, Facebook gested could prompt the co-mingling include a range of payments, technolo- collects and uses personal information, of metadata. gy, telecommunications, blockchain, such as social and political views, as a In July, David Marcus, who heads venture capital and non-profit organ- part of its core business model. Facebook subsidiary Calibra, assured izations. Alongside Facebook, which This is not to say that banks haven’t members of the U.S. Senate Committee operates the cryptocurrency through admitted to sharing sensitive consumer on Banking, Housing and Urban Affairs its regulated subsidiary Calibra, other data with other companies, or that the that “[they] do not expect Calibra to notable names on the roster are (or were data they collect isn’t also personal. make money at the outset, and Cali- when the Monitor went to print) Mas- In 2013, Barclays informed 13 million bra customers’ account and financial tercard, Visa, Paypal, Uber and Spotify. customers that it would be selling infor- information will not be shared with The cryptocurrency has provoked a mation about their spending habits and Facebook, Inc., and as a result cannot slew of reactions from central banks other data that “may include images of be used for ad targeting.” and politicians, ranging from appre- [them] or recordings of [their] voice[s]” While this affirmation and others hension to calls for an immediate to third parties. But it’s important to related to consumer privacy sound pause on the project. In early August, note that the breadth of personal data promising, it’s far from clear we policy-makers from Canada, the EU, the held by Facebook is much more signifi- should treat them as a reliable and U.S. and other countries, including Pri- cant than that collected by banks. Such complete picture of Facebook’s plans vacy Commissioner Daniel Therrien, data sharing practices also don’t form a given the firm’s missteps and broken released a joint statement to express central part of banks’ business models. promises. CEO Mark Zuckerberg was 50 recently accused of withholding the truth during his highly publicized April 2018 congressional testimony, following news this August that the social network has been paying contractors to transcribe audio clips from users. In another instance, the social media company publicly stated it would not share data between WhatsApp and Facebook, before reneging on that promise in 2016.

L’état, c’est Facebook Facebook is a huge company with incredible reach and market value. As of the second quarter of 2019, the firm had 2.41 billion monthly active users, with 2.7 billion people using at least one of the company’s three core platforms— Facebook, WhatsApp or Instagram—every month. (The Canadian Internet Registration Authority estimates that 71% of Canadians are on the social network.) In the same quarter, the company made US$2.6 billion ($3.44 billion), a drop from previous quarters but still a significant sum. With stats like that, it’s not surprising that some have Do we trust our money to Facebook and other tech firms compared the firm to a nation-state. Zuckerberg himself has (Apple, Amazon and Telegram have shown similar interest said, “in a lot of ways Facebook is more like a government in financial services) when we’re not sure they can, or care than a traditional company.” Certainly, the company plays to, protect our privacy? a significant role in how people communicate with each other and consume information, including news coverage. The organization also has substantial influence over the Regulatory backlash success of firms in a variety of sectors, not least journalism. It is promising that regulators have given many of the risks Yet, unlike democratically elected governments, Face- presented by Libra their due weight. In July, the chair of the book is largely unaccountable to the public. And despite G7 working group on stablecoins, Benoit Coeuré, affirmed statements to the contrary, the social media company has that the cryptocurrency should meet stringent regulatory shown itself unwilling to fully co-operate with regulatory standards, hold a strong legal basis and be underpinned by a bodies around the world. Moreover, the governance struc- “governance and risks management framework,” among other ture of the organization itself is unusually centralized. conditions. Coeuré noted that Facebook and others involved Zuckerberg controls 58% of the firm’s voting power at in the project are far from meeting these requirements. shareholder meetings. Such reactions have undoubtedly forced the Libra Asso- To be sure, Libra won’t just be controlled by Facebook. ciation to backpedal on some of its plans. In late August, The aim of the Libra Association is to bring membership to the Financial Times reported that regulatory scrutiny about 100 organizations by the cryptocurrency’s planned caused three unnamed members of the association to look launch in the first half of 2020. And all major policy and into ways to loosen their ties with the venture. Facebook technical decisions made by the association will require also hadn’t, as the Monitor went to print, announced the approval from at least two-thirds of members. addition of any new organizations to the group since the But Facebook has said it will continue holding a leader- introduction of the cryptocurrency, which could signal a ship role in the group until launch day. This arrangement reticence by potential members to attach their names to the suggests that the social media company may play an out- effort. In any case, it’s possible that regulatory barriers will sized role in the policies and principles that shape the initial delay the launch date or put a stop to the project entirely. operations and aims of the body. At the same time, despite In other instances, policy-makers have used the dialogue the Libra Association being not-for-profit, the majority of around Libra as an opportunity to outline alternatives to current members are private companies. such schemes. In a speech in late August, Bank of England Writing in New York Magazine this June, Max Read Governor Mark Carney considered the benefits of a global claimed Libra has the potential to become something monetary system run by the public sector. Advantages of very close to a global reserve currency, an international- the proposed approach include a decreased reliance on ized central banking system, with vast implications for the U.S. dollar and reduced volatility in capital flows to national currencies and monetary policy. Even when we emerging market economies. put aside recent indiscretions involving members of the Such a proposal would be an immense undertaking and Libra Association (Mastercard is being sued for more than require extensive cross-border collaboration. Yet it does $22 billion in the U.K. for charging excessive fees), we need seem like a project well-suited for a diverse and globalized to consider whether we are willing to give weighty fiscal world, and an effort with the potential to foster a secure responsibilities typically taken up by governments to an global currency run by accountable entities. Time will tell organization predominantly run by powerful corporations. whether Carney’s vision, or Facebook’s, wins out. M 51 Books

REVIEWED BY FRANK BAYERL Let’s mix it up a little

TEARDOWN: REBUILDING introduction of proportional rep- always usurp a deliberative legisla- DEMOCRACY FROM THE GROUND UP resentation. “In almost any country in ture, says Meslin, who suggests that DAVE MESLIN the Western world, if one party takes members of Parliament in Canada complete control of the government should be selected on a rotating basis Penguin Canada, May 2019, $27.00 against the will of the people, it’s called to fill the position of prime minister. a coup,” Meslin writes. “In Canada, Meslin uses the issue of homeless- ONALD TRUMP, Bernie Sanders, however, we just call it an election.” ness to distinguish between upstream the Tea Party, the Occupy move- He goes on to weigh the merits and and downstream solutions to political ment. What do these seemingly disadvantages of the various forms of problems. Some might hand out sleep- disparate actors have in com- PR, concluding that any such system ing bags or set up food banks to address mon? According to Dave Meslin, would be a vast improvement on our the problem, but these are temporary Dit’s the belief that the political system current first-past-the-post model. This fixes (downstream solutions) that is rigged in favour of (choose one): is hardly a controversial view now, but don’t get at the root of the problem. the elites, the one per cent, the estab- Meslin also advocates extending the Others might work to increase lishment. And what term is usually franchise to permanent residents and affordable housing and tenant pro- invoked to characterize, almost always youth over the age of 16—more than tections or redistribute wealth. These pejoratively, the impulse behind these two million Canadians in all. are upstream solutions, but there are actors? “Populism,” of course, whose The author makes some familiar far fewer organizations working on root meaning is simply support for the points about Canada’s political sys- them than there are groups who tackle concerns of ordinary people. tem, such as the excessive power of downstream approaches. Meslin says Meslin is on the side of those who political parties and party discipline the tax rules governing non-profits vs. feel our democracy is broken, hence in the House of Commons and the charitable groups are the major culprit he argues a teardown, not tinkering consequent powerlessness of indi- in underfunding upstream solutions. around the edges, is required, with vidual MPs, and he points out that The former can engage in advocacy the goal to correct the cynicism things were not always thus. The but cannot provide tax receipts, while that infects so many citizens today. Constitution hardly mentions the of- the latter can offer tax deductions but Like these people, Meslin wants to fice of prime minister. And before 1970, must follow strict rules limiting their disrupt the system, but in a positive parties were not listed on ballots, only advocacy activities. direction. In this book he lays out his the individual candidates’ names. He In his final chapter, Meslin returns suggestions for opening up politics advocates various sensible measures to to his roots as a community organizer to ordinary citizens from the local, restore the independence of MPs and to tie together the disparate threads of community level to the federal level. rebalance the triangular relationship the book. He talks about some ways At the municipal level, Meslin notes between constituency wishes, person- he has tried to promote community the many amalgamations that have al opinion and party loyalty. engagement in his Toronto neighbour- taken place in recent years, almost Readers with a theoretical bent hood, through projects to de-fence always against the wishes citizens, will find Chapter 10 of Teardown the neighbourhood and to produce and looks at various ways to bring local fascinating. In it Meslin describes maple syrup by tapping local sugar government closer to the people. Mon- how the British parliamentary system maples, for example. The aim in both treal, he feels, has the best approach, has been transformed from one where cases was to create a greater sense of with its 19 borough councils. Each has parliament was clearly supreme (early community. All Meslin’s suggestions a local mayor and councillors elected 19th century) and the concept of a in Teardown are intended to replace by neighbourhood residents every “prime minister” did not exist, to one top-down control with bottom-up four years. Borough council meetings where that office now has extraordi- empowerment. The book is an unusual allow any citizen to raise issues and nary powers. Similarly, in the nascent combination of the very practical and question councillors directly. From United States, having just overthrown the theoretical, and its suggestions de- Meslin’s experience, they receive polite a dictatorial king, there was at first serve serious consideration whenever and meaningful answers. great resistance to the idea of a chief we vote to elect a new government. M At the federal level, no doubt the executive with any significant powers. most important reform would be the An executive structure will almost 52 REVIEWED BY SHOSHANA MAGNET AND ALLISON PILON Lots of love for queer memoir

LOVE LIVES HERE In this sense, Knox’s book functions AMANDA JETTÉ KNOX as a guiding light for all of us in our struggles to decide how to be in this Viking, July 2019, $24.95 beautiful, broken world. Like Knox, we too are part of a queer HERE’S A LOT of crying in our family, one that has few templates. story. That day was no excep- Shoshana had a baby on her own, her tion. But it was the happy kind best friend fell in love with her baby of crying.” and they now co-parent him while Summing up her partner’s living in an intentional community. “Ttransition to becoming a woman, this Allison had her baby with her beloved sentence also succinctly describes our partner Steve, who died when her son experience of reading Amanda Jetté was not yet two years old. We met on- Knox’s life-sustaining, life-affirming line (does anyone meet anywhere else memoir of her family’s attempts to these days?) and have fallen wildly in build a more socially just world for love. trans people. Here is that rare book, support they received from friends, Two queer women, one trans man, moving in all senses of the word, that extended family, their workplaces and two kids, two households (for now). will have readers continually leaking the educational system. What does the future look like for fam- happy/sad tears while frantically Of course, as Knox herself would ilies like ours? Like Knox’s family, ours turning the pages. note, part of the reason their family is shielded by our own middle class and Love Lives Here is about a queer has been able to thrive stems from the race privilege. When we think about family that has survived and thrived ways in which they are supported by queer futures, this work must also after going through two transitions— systems of class and race privilege. involve ongoing social justice efforts Knox’s daughter’s, at 11, and her wife This privilege shields Knox’s family aimed at combatting racism, hetero- Zoe’s shortly after that—and one from the ways that so many trans peo- sexism and patriarchy. While we might coming out: her own as a lesbian. ple living in poverty and trans people disagree on what queer inclusion looks The book details the heavy toll that of colour are forced to live—subject like, it is helpful to think alongside society’s homophobia and transpho- to police violence, criminalized, denied Knox about how queer families can bia can take on queer lives, from access to housing, kicked out of the ed- provide meaningful challenges to the forcing a young Zoe to hide her true ucational system and fired summarily status quo. And like everyone else, we self, resulting in years of depression from their jobs. hunger for representation. Our family and anger, to keeping Knox in denial Still, in describing the fears she has does not need to look just like Knox’s about her own sexuality, to leading a for her family, notably the impact of family for us to be inspired and moved tearful and scared young girl to email transphobia on her children, Knox by the ways her memoir details their her parents about her gender identity helps us think about some of the unwavering commitment to love and while fearing their rejection. questions that continue to preoccupy to social change. For many trans folks and queer many queer families. How out should We found ourselves immensely youth, hatred and abuse from society we be? Should we have no gay shame grateful to the bravery of the Knox leads to a range of mental health strug- because this is who we are? And how family. Thank you to Knox for a gles including depression, anxiety, and should we protect our children from courageous, kindhearted, empathetic thoughts of suicide. Knox and her queerphobic and transphobic hatred? booked aimed at inspiring change by family had to deal with brutalizing Knox forefronts ethics in her answers example. We certainly found ourselves homo- and trans-phobic backlash to to such intimate questions and en- among the inspired, even as we contin- their activism. If they were able to courages readers to do the same, the ue to think about what other forms of completely turn things around it was ultimate goal being to try to better substantive change will look like for because of the positive and welcoming the world for queer and trans people. families like ours. M 53 REVIEWED BY MADELINE LANE-MCKINLEY Unthinking the Family

FULL SURROGACY NOW: family.” Certainly, the thought stim- less collectively enact, revolutionary FEMINISM AGAINST FAMILY ulates a wide range of frustrations struggle. Through these productive SOPHIE LEWIS and anxieties, along with the familiar and often painful frictions with “re- proclamations of hysteria. Recalling alism,” the text “stands for the levelling Verso Books, May 2019, $35.95 a 2014 conference in London, for in- up and interpenetration of all of what stance, Lewis describes an unnamed are currently called ‘families,’” Lewis EALISM”—AND ITS attendant speaker in strong opposition to fam- asserts, “until they dissolve into a demand for plausibility, ily-abolitionist thought: “We are not,” classless commune on the basis of the imaginability and appeals the speaker cried out, “about to march best available care for all.” to common sense—taunts around with placards saying ‘Abolish In this framing of a feminism a version of feminist his- the Family,’ which would be crazy.” against family, Full Surrogacy Now un- “Rtory. “Softhearted and softheaded,” Inspiringly, Lewis’s critical utopian derstands the work of “baby-making” feminism has been perennially re- impulse is to face up to this “crazy.” precisely as work, ultimately asking of cast, Kathi Weeks suggests, as “more The supposed craziness of family the possibility for all baby-making to precisely, softheaded because soft- abolition is not so much challenged be reimagined, through revolutionary hearted”—like utopianism, it is “at as profoundly integrated into the comradeship, as surrogacy. Always in best naïve and at worst dangerous.” problem around which Full Surrogacy contrast to Surrogacy™—the com- As doomed to such rebukes as any Now orbits: primarily, the problem of mercial surrogacy industry which other text of its ambition and political its own imaginability. generates an estimated one billion scope, Sophie Lewis’s Full Surrogacy Of course, the thought of family dollars a year—“full surrogacy” is a Now anticipates and thoroughly abolition is crazy—and to sit with queer communist speculative future: rejects this anti-utopianism that— it is crazy-making. As Lewis makes “We are the makers of one another,” specifically through gender—fancies clear, it is a matter of bumping up she writes. “And we could learn collec- itself somehow “realist.” Her debut against, rather than shutting down, tively to act like it. It is those truths text is a more properly historical our capacity to even think, much that I wish to call real surrogacy, full materialist case against this “realism” surrogacy.” on the one hand, and something of a Never hiding from full surrogacy’s science fiction on the other. Without lurking sense of unthinkability, Lewis naming itself as such, Full Surrogacy calls for a mode of thinking about Now is a manifesto. And in the spirit of family abolition through an ongoing Donna Haraway’s A Cyborg Manifesto, friction with nihilist visions of with- it explores a multiplicity of feminisms drawal, negation or abandonment. and possible futures, through vi- “Couldn’t there be more (rather than brant moments of genre-bending, less) opportunity for bonding and speculation and immanent critique. connecting,” she asks, “in a surrogacy Provocatively, and with an often wick- context?” However “crazy,” her version ed sense of humour, Lewis historicizes of the end of the family is not at all and taunts back that which renders the end of care. Rather, “full surrogacy her project seemingly impossible, now” takes the standpoint of a “plural modelling (as her subtitle promises) womb and a world beyond propertar- a “feminism against family.” ian kinship and work alienation.” As The speculative future staged by Lewis maintains, this is not the end Full Surrogacy Now is that of family of care but the beginning of real care. abolition. As an addendum to Fredric To today’s Marxist-feminist focus Jameson, Lewis conjectures that “it on social reproduction, this demand is still perhaps easier to imagine the for full surrogacy marks a crucial con- end of capitalism than the end of the tribution: a “multigender feminism in 54 which the labour of gestation is not policed by well-meaning Lewis challenges trans- ethicists but, rather, ongoingly revolutionized by struggles seeking to ease, aid, and redistribute it,” as Lewis describes exclusionary radical it. The question of “life-making,” which Tithi Bhattacharya feminism as a dangerous and Susan Ferguson raise in defining social reproduction theory, might be elaborated through this expansionary and conservative strain theory of surrogacy. The term “surrogate,” Lewis suggests, in the battlefield of has the potential to bring together millions of precarious and/or migrant workers—gestators along with, to start, contemporary feminisms. “cleaners, nannies, butlers, assistants, cooks, and sexual as- sistants”—whose work “is figured as dirtied by commerce, in contrast to the supposedly ‘free’ or ‘natural’ love-acts of an angelic white bourgeois femininity it in fact makes possible.” In a moment charged with feminist revivalism, as well Entering into a love-hate relationship with Firestone is as competing and recuperative feminisms, Full Surrogacy something of a rite of passage—and for this, I appreciate Now is as much a demand of the impossible as a meditation Lewis’s nuance and care, never at the cost of critical rigour. on radical disinheritance. “Wanting a mode of gestation that After publishing The Dialectic of Sex, with severe anxiety, itself contributes to family abolition makes my little book at the age of 25, Firestone only published one more book, a clear descendant of disparate elements of the Second 28 years later, after years of institutionalization—not un- Wave,” Lewis acknowledges playfully, while calling the text common in her Women’s Liberation cohort. Certainly, there a “disloyal, monstrous, chimerical daughter indeed.” Not is an exhaustive list of low-hanging problems to pull at in only de-centering but fully eradicating the mother-child The Dialectic of Sex: Firestone’s contribution to “sex class” relation from how she conceptualizes gestation—that is, theory, her appeals to nature and her optimism toward as labour—Lewis is consistently disloyal, to borrow her technology are among the many. own phrasing, to the feminist theorists who made her work But what I have grown to feel about The Dialectic of possible. She does not abandon but, in Haraway’s terms, she Sex—which is perhaps more apparent in Firestone’s later “stays with the trouble.” It is a loving disloyalty, seeking to work, Airless Spaces—is that its antagonism toward genre unimagine, in broader terms, the labour of love. It is also a has been tragically overlooked if not misread. What she source of enduring conflict and ambiguity. perhaps felt had to be framed as a grand synthesis of “fem- inism” with Marx, Engels and Freud, becomes ultimately mong her disloyalties, Lewis finds fault with Shulam- something more akin to the work of Charlotte Perkins ith Firestone’s The Dialectic of Sex (1970) and Marge Gilman: a feminist utopian thought experiment, which APiercy’s Woman on the Edge of Time (1976), calling both she describes as “the case for feminist revolution.” This texts “insufficiently ambitious” in their determination to mutiny against genre is something that Full Surrogacy Now wish away the labour of gestation in search of what she shares in common with this flawed masterpiece from 1970, describes as a “gestational fix.” In each case, she suggests, and quite knowingly. the problematic of pregnancy—whether figured as labour, Lewis has a much keener sense of her genre trouble love, nature, etc.—is estranged and displaced, rather than than Firestone. While Lewis promises her text will not fully dealt with. As Lewis observes of Firestone, what will be a matter of case studies, she offers plenty, along with be unfortunately most remembered of her “flawed master- autobiographical interludes, theoretical conjectures, forays piece” is the proposal that “childbearing…be taken over by into various debates and generative conflicts. Fluidity is technology.” Quite powerfully, Lewis launches a consistent hardly to be missed as a motif that especially comes to attack on the trans-exclusionary implications of Firestone’s life in her conclusion. Noting that “all humans in history work, as well as Piercy’s, both of which trade in biological have been manufactured underwater,” Lewis postulates determinism in differently problematic ways. Throughout that “[o]ur wateriness is our surrogacy. It is the bed of our the text and elsewhere, Lewis challenges trans-exclusionary bodies’ overlap and it is, not necessarily—but possibly—a radical feminism (TERF) as a dangerous and conservative source of radical kinship.” In these musings on wateriness, strain in the battlefield of contemporary feminisms. she offers a hermeneutic for the text. Staging direct confrontations at several instances in her It is no coincidence that some of the primary texts Lewis text, Lewis models for us a way forward which takes on the draws from are in some manner science fictions like hers. radical kinship at stake in “full surrogacy”—not of cancelling, Besides Firestone and Piercy, Octavia Butler and Ursula K. forgetting or forgiving, but of troubling. Reading Firestone’s Le Guin are crucial influences, alongside Haraway, Angela utopia against the grain of her political theory, Lewis recov- Davis, Mary O’Brien, Simone de Beauvoir, to name only a ers the most revolutionary elements from The Dialectic of few. As Lewis reflects, “While the name on the cover of this Sex as well. Most evocatively, Full Surrogacy Now continues book is mine, the thoughts that gestated its unfinished Firestone’s often overshadowed dream of collective belong- contents, like the labours that gestated (all the way into ing, outside the terms of the mother-child “social bond,” and adulthood) the thinkers of those ongoing thoughts, are through the abolition of the capitalist family. many.” Yes, the process described here is no different from 55 Lewis demonstrates how the solutions, she perseveres instead to- ward a troubling of her own language revolutionary possibilities of “full and key concepts, animated all the while surrogacy” and family abolition by a sense of futurity. The work of this project, as she notes herself continually, can merely be grasped at, precisely is necessarily collective—and whether because of the dystopia we find this project is to be continued is yet to be determined, but the prospects are ourselves in. good. Queer communist Jules Joanne Gleeson, for instance, has delved into the possibilities of this text already, not only underscoring Lewis’s commit- ment to a trans-inclusionary view of any other text: there is never a “mine,” thinking,” in that “it promises that a gestation, but asking of the “presently and there is always a “many,” though ‘universal’ (trans-erasive) feminist soli- unclear relation” between this work on often unacknowledged. darity would automatically flourish in womb-labour and Marxist-Feminist What is different, however, is how the worst of all possible worlds.” It is in thought in social reproduction theory. Full Surrogacy Now here and elsewhere this sense, as Lewis suggests, that “the Like Gleeson, I can’t help but hope actively seeks to be communized dystopia functions as a kind of utopia: that “Surrogacy” could bring together and de-individuated as a collective a vision of the vast majority of women some of the more disparate yet poten- project—not as the “death” of author- finally seeing the light and counting tially congruent “feminisms” today. ship (or private property) but as its themselves as feminists because soci- Yet to the extent that Full Surrogacy complete abolition. Just as Lewis asks ety has started systematically treating Now could provide such a point of us to unthink the proprietary bond them all—not just black women—like synthesis, it is likewise, quite clearly, between gestator and child, she begins chattel.” something of an outsider text. Perhaps to construct an epistemology of sur- These Atwoodian anxieties get us too occasionally, Full Surrogacy Now rogacy, at points brilliantly elaborated closer to understanding white femi- features moments of approximating through this analogy of motherhood nism’s humanitarian impulses, as in and making concrete the possibility and authorship. the anti-surrogacy campaign, Stop of its fundamental demands. “We need Fittingly, and from the start, one of Surrogacy Now, which Lewis detourns ways of counteracting the exclusivity Lewis’s central antagonists is Marga- like much else. Contending with these and supremacy of ‘biological’ parents ret Atwood. In her reading of Gilead, anti-surrogacy and anti–sex work in children’s lives, experiments in Atwood’s reproductive dystopia in The platforms, Lewis argues that these communizing family-support infra- Handmaid’s Tale, Lewis argues that political rhetorics have been used to structures; lifestyles that discourage “human sexuation is neatly dimorphic justify imperial wars and establish a competitiveness and multiply nonge- and cisgendered,” adding, “but that is “rescue industry,” seeking to “abolish netic investments in the well-being of apparently not what’s meant to be the commodification without abol- generations,” she writes, fully attuned dystopian about it. It’s the ‘surrogacy.’” ishing the work.” Entangled, quite to the rebukes of “realism” she finds The “universal” agony at the center of generatively, in this analogy between herself taunting back. Atwood’s narrative is the separation sex work and surrogacy, which Lewis These more practical moments are of a mother from her daughter, and takes on as anything but simple, she gestures throughout Full Surrogacy moreover, the breeder’s deprivation redirects us toward the abolition Now toward what is not-yet-conceiva- of motherhood. Lewis is not alone in of work: “All we really know is that ble, all with a built-in sense of urgency, reading The Handmaid’s Tale as a de- their articulation as work in the first potentiality, and familiar sorrow. Like raced slave narrative, tending toward instance will be key to abolishing them Butler, Le Guin or Samuel Delany— a version of “cisgender womanhood, (as work) in the long run.” queer, feminist, anti-colonial writers, united without regard to class, race, prone to science fiction precisely or colonialism, [that] can blame all its hat’s most frustrating about Full as a mode of abolitionist dreaming, woes on evil religious fundamentalists Surrogacy Now is also what’s untethered from chauvinist “real- with guns.” However, far more than Wmost remarkable about it: how ism”—Lewis pulls to the surface of taking up these questions in the 1985 it lingers with the discomfort induced, her text ideas and desires that cannot novel, Lewis targets the narrative’s so thoroughly, by the unimaginable. survive with us here, in this toxic resurgence as what today’s cultural Throughout, Lewis demonstrates atmosphere. But these longings for “a feminist front claims to be an “allegory how the revolutionary possibilities of world worth living in,” as she forcibly of our times” in the Trump era. “full surrogacy” and family abolition unravels, demand from us more than To the alarum “We are living in The can merely be grasped at, precisely a moment of thought. M Handmaid’s Tale,” she retorts, “Peo- because of the dystopia we find our- THIS ARTICLE WAS PUBLISHED IN JUNE BY THE LOS ple’s eagerness to assert that we are selves in. Where Lewis might slip easily ANGELES REVIEW OF BOOKS. IT IS REPRINTED HERE WITH THE PERMISSION OF THE AUTHOR. betokens nothing so much as wishful into programmatism or reform-based 56 HELP US SHED LIGHT ON THE ISSUES THAT MATTER TO YOU. (we’ve got some bright ideas)

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