Panama Papers

LawNews

2016 is ending and we can collectively agree it’s been a shitty year. Cops are spying on journalists, our Prime Minister has turned his back on the young people who elected him, comedians are being punished for their jokes, and icons from Prince to Bowie to Muhammad Ali to Carrie Fisher have left us. In the legal world it’s been an ongoing ugly parade and with the year FINALLY coming to an end, it’s time for a recap of some of the major legal issues affecting us this past year.

Syrian Refugee Crisis

The ongoing crisis in Aleppo has led to tons of refugees fleeing Syria. Unlike the US where debates regarding the refugee crisis were fraught with concerns about terrorism and an emphasis on keeping victims of Aleppo out, the Trudeau government took the moral high ground and pledged to welcome twenty-five thousand Syrian refugees. The Canadian government ended up going above and beyond this pledge and have thus far taken in thirty-eight thousand seven hundred and thirteen Syrian refugees.

Trans-Pacific Partnership

On February 3, 2016, Federal Trade Minister Chrystia Freeland signed the Trans-Pacific Partnership agreement on Canada’s behalf. Canada’s participation in the treaty was negotiated by the Harper government before its colossal defeat by the Liberals in 2015. Whether Parliament ratifies the agreement thus legally binding Canada remains to be seen.

Uber Crisis

Montreal taxi protest (photo Chris Zacchia)

Quebec cities were rife with cab drivers protesting Uber, a car service that is not bound by the ridiculous and expensive rules that must be obeyed by taxi drivers and company owners that specify everything from pricing and car specs to what the driver wears. In September 2016 Uber made a deal with the Quebec government which included Uber acquiring 300 taxi permits and obliging drivers to get a class 4C license and insurance. With the cab industry in Montreal already flooded, it remains to be seen whether this tentative deal will create peace between taxi companies and Uber.

Panama Papers

In April 2016 the decryption of the Panama Papers revealed the Panamanian law firm Mossack Fonseca to have helped many of the world’s wealthiest people hide their assets from governments. Those named included terrorists, CEOs, politicians, and athletes. Canadian tycoon and political wannabe Kevin O’Leary is dismissive of the papers, possibly because he too is hiding wealth from Canadian taxpayers for his own benefit.

Anti-Vaxxers and Naturopathic Remedies

David and Collet Stephan were convicted of failing to provide the necessaries of life for failing to get their son medical attention for bacterial meningitis. As the Stephans are anti-vaxxers distrustful of modern medicine, their 19-month old boy Ezekiel was instead treated with echinacea, garlic, onions, hot peppers and horseradish. By the time he was brought to a hospital it was too late and the boy died. David Stephan has since been sentenced to 4 months in prison while Collet to 3 months of house arrest. They have been ordered to bring their kids to a medical doctor once a year and a nurse every 3 months.

OQLF

Quebec Culture Minister Hélène David announced modifications to Quebec language laws that would force businesses with trademarked non-French names to add French to their signs. Though the proposal is clearly in retaliation for the government’s legal defeat against Best Buy in 2014, it remains to be seen whether the changes will go through in a province exhausted and fed up with language and cultural debates.

Ghomeshi Verdict

In May 2016 former CBC radio host Jian Ghomeshi signed a peace bond to settle a sexual assault trial. Though for many this is a slap on the wrist, his former victim Kathryn Borel celebrated the bond as a public acknowledgment of Ghomeshi’s guilt. The 12 month long bond guarantees Ghomeshi will go to prison should he violate its terms and does not limit the prosecution from going after him for other sexual assaults.

Mike Ward

Mike Ward (photo Cem Ertekin)

In July 2016 Montreal Comedian Mike Ward was ordered to pay $42 000 to a disabled kid and his mother for making fun of him in one of his jokes. The verdict, which Ward has sworn to appeal, has turned the Quebec Human Rights Commission from a means of social justice to one of censorship. No one has questioned why the kid went after Ward and not the bullies who used his joke to hurt him, but it’s likely due to Ward’s celebrity status and wealth.

Pitbull Ban

Following the death of a Pointe-Aux-Trembles woman after she was mauled by a dog, the City of Montreal has adopted a ban on dangerous breeds. The ban is hugely unpopular and has resulted in protests, the latest being the SPCA’s refusal to take in dogs following the Quebec Court of Appeal’s reinstatement of the ban after the Superior Court overturned it.

STM Fines

On September 7, 2016 the Municipal Court of Montreal ruled that fines given by STM rent-a-cops to people unable to produce their transfer is unconstitutional. The STM has vowed to appeal the decision.

Judge Robin Camp

In November 2016, Judge Robin Camp was recommended for removal from the bench by the Canadian Judicial Council following an inquiry into his conduct during a rape trial. Though the judge promised to reform, his behavior demonstrated such contempt for victims of sexual assault the Council ruled no amount of sensitivity training would repair his damage to the judiciary’s reputation.

Seafood and Civil Liability

In May 2016 Simon-Pierre Canuel ingested salmon at a bistro in Sherbrooke sending him into anaphylactic shock. He is now suing the restaurant and waiters for $415,000 though his negligence regarding his food allergy and rumours that he has tried to scam restaurants in the past make it unlikely he will get the full amount.

This past year has been full of legal debates that are as fascinating as they are numerous and outrageous. For every dispute brought before courts and councils we come closer to what we all strive for: a just society.

In 2017, let’s aim for just that.

LawNews

The upper one percent – society’s richest people – are in deep shit. Over a year ago an anonymous source contacted Süddeutsche Zeitung, Germany’s largest broadsheet newspaper, with a juicy gift.

It consisted of encrypted internal documents from Mossack Fonseca, a Panamanian law firm that specializes in selling anonymous offshore companies to interested buyers. These companies allow individuals and organisations to hide wealth from those with a legal right to it including tax collectors and spouses in divorce proceedings.

When the documents were decrypted they pointed the finger at politicians like British Prime Minister David Cameron and Russian President Vladimir Putin, as well as rich company owners and CEOs, terrorist organisations, and even athletes like Lionel Messi, the Argentinian soccer player.

The world is understandably outraged. Everything we suspected about the upper one percent: that it’s a group consisting mostly of sanctimonious older males who will do anything to keep their wealth so they can continue to screw us turned out to be absolutely true.

Having said all that maybe it’s time we take a look at our own laws to see what the offenders in our back yard will be facing if a few Canadian names turn up in the Panama Papers.

There are three kinds of charges a Canadian found in the Panama papers would likely face: tax evasion, tax avoidance, and maybe fraud.

Tax evasion is deliberately hiding income so you don’t have to pay taxes.

It can have many forms as defined by the Federal Income Tax Act and the Quebec Tax Administration Act. This includes failing to file or make a tax return, making false or deceptive statements in tax returns, destroying records to avoid paying taxes, or conspiring to do these things. The penalties are different depending on whether the violation involved federal or provincial taxes.

A person convicted of federal income tax evasion will be facing a maximum prison sentence of five years. The fines they will face depend on the type income tax evasion they are convicted of.

If the person is convicted of failing to file a tax return, for example, the maximum fine is twenty-five thousand dollars plus any little penalties for specific violations related to the evasion. If you’re convicted of providing false information or destroying documents to avoid paying taxes, the maximum fine is double the amount you sought to evade.

Quebec law comes down a little harder on income tax evaders. The maximum penalty for income tax evasion is a million dollars, but sadly the prison sentence is as ridiculously short as in federal law: five years less a day.

Income tax avoidance is a little different.

Income tax avoidance is abusively taking advantage of a legal loophole to avoid paying taxes or to pay less of them, and it’s only listed as a separate offense in the Federal Income Tax Act. This can take the form of making arrangements that would result in a tax benefit or exemption for example.

If a person is caught doing this, the penalty is going to depend a lot on the judge because the federal Income Tax Act says that the consequences will be determined “as is reasonable in the circumstances.” Sadly, the wording of the rules regarding tax avoidance suggests that the worst case scenario is being denied the benefit or having to pay the taxes.

Fortunately, the Canadian Criminal Code’s rules regarding fraud are MUCH tougher.

Fraud is defined as being committed by someone who “by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service.” The maximum penalty for fraud is a prison sentence of fourteen years.

And it gets better.

The Criminal Code allows our courts to take into account certain aggravating circumstances such as whether the fraud had a negative impact on the Canadian economy or affected a large number of victims.

A Canadian who partook of Mossack Fonseca’s services to get out of paying a healthy chunk of their taxes would certainly be guilty of both because every penny they keep out of the tax collector’s hands is a penny they keep out of the public purse. The public purse is where the money for stuff like health care, passport offices, and salaries for judges and public defenders comes from.

Wealthy Canadians like Conservative Leader Wannabe Kevin O’Leary have been trying to minimize the impact of the Panama Papers. In an interview with the CBC on April 6, 2016, he boldly said:

“These [tax] structures are legal… So what? That’s the bottom line.”

The “so-what” is that the money rich guys are hiding so they can pay for their golf clubs and matching country club-appropriate outfits is money they are keeping from hardworking Canadians who need to know that they have to pay taxes like everyone else and that those taxes will be proportionate to their actual wealth (like everyone else). In order to make sure of that we need to punish those who can afford to pay the taxman but don’t…

…And maybe investigate Kevin O’Leary too.