Canadians are right to be angry over the Panama papers leak

Canadians are right to be angry over the Panama Papers leak

The offshore accounts behind the Panama Papers may be legal. But they’re not fair.

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Canada Revenue Agency“Leak” is hardly the right word. The Panama Papers, as they are being called, are more of a Noah-style great flood. A full 2.6 terabytes of computer files, encompassing 11.5 million documents relating to 200,000 offshore companies operating in tax havens like Switzerland, Cyprus and the British Virgin Islands.

Once the property of Mossack Fonseca, a law firm based in Panama City, and now in the hands of the International Consortium of Investigative Journalists and 100 media outlets around the world, the documents give an unprecedented glimpse of how the wealthy protect and hide their money. The names involved are already dazzling—soccer god Lionel Messi, filmmaker Pedro Almodóvar, Iceland’s Prime Minister Sigmundur David Gunnlaugsson, Jackie Chan, Ian Cameron, the father of David, the British PM. And the many friends of Vladimir Putin, with fortunes totalling US$2 billion that are always at the Russian president’s disposal.

The eye-popping revelations will continue for weeks, if not months. But let’s not lose sight of the 350 or so largely unknown Canadians whose shell companies have been caught up in the data dump. Ottawa’s official figures say $200 billion in Canuck wealth currently sits offshore and out of reach of the Canada Revenue Agency. The actual amount, however, appears to be much, much higher, with annual tax losses somewhere in the $6-billion to $7.8-billion range—roughly a quarter of the current federal deficit—according to an estimate obtained by the Toronto Star, a partner in the consortium.

As of yet, none of the media outlets have put forward evidence that these people have done anything illegal. Taking full advantage of regulatory loopholes and byzantine tax-minimization schemes can certainly be characterized as clever. Although one wonders whether the Canadian public will be inclined to see it that way.

We are, after all, a country that jettisoned a cabinet minister over a $16 glass of orange juice. Not to mention one that spent $23.5 million on an auditor general’s investigation that uncovered $991, 917 in “inappropriate” expenses from 30 current and former members of the Senate. (A figure that was reduced by $144,713 in an arbitration chaired by a former Supreme Court justice, that surely cost a whole bunch more.) Quebec—Canada’s Most Corrupt Province™—held a public inquiry into the awarding of government construction contracts that heard from 291 witnesses over 261 days of testimony, and generated a 1,741-page final report at a cost of $45 million, while documenting $15 million in dubious contributions to political parties.

Just this past week, the media has been full of outrage over tales of fundraising by Liberal governments in British Columbia and Ontario. The annual “Heritage Dinner” with Premier Kathleen Wynne in Toronto raised more than $2.5 million for party coffers in a single night—and more than a few questions about why 1,500 business people and lobbyists might be willing to pay $1,600 a plate for rubber chicken and a canned speech, or an extra grand to rub shoulders with members of her cabinet at a 30-minute-long “pre-reception.” Honestly, they’re finally efficient and effective at something, and all we do is complain.

Related: So why do the rich hide money offshore, anyway?

Canadians are, on the whole, awfully worried about people lining their pockets. Transparency International’s last Global Corruption Barometer survey from 2013 found that 53 per cent of respondents said that corruption has increased “a lot” or “a little” over the previous two years. And 62 per cent identified our political parties as the most rotten apples in a stinky, spoiled barrel.

Which is all a little odd, given that Transparency International’s other big survey—the Corruption Perceptions Index—ranked Canada as the world’s ninth-cleanest nation in 2015, behind Denmark and Sweden, but well ahead of the United States and Japan. (North Korea and Somalia tied for last, in 167th place.) In fact, only three per cent of Canadians reported paying a bribe in the last year, and mostly on the local level like “land services.”

Alesia Nahirny, Transparency Canada’s executive director, says she gets asked a lot about that apparent gulf between perception and reality. One part of her answer is that the organization actually has a rather narrow definition of corruption—the use of publicly vested power for private gain. The other is that Canadians, with little real-life experience with Africa’s corrupt cops, Russia’s on-the-take bureaucrats, or South American kleptocrats, believe their country is capable of more. “We are a democracy. We really do have higher expectations,” says Nahriny. “And that’s fair.”

The Panama Papers suggest that shady, self-interested behaviour, like so many other things, has gone global; wealthy people, whose first allegiance is to their bank books, working in concert with accountants, lawyers, and each other, to put their money beyond the reach of governments. Maybe it’s not illegal, but it’s clearly not fair—yet another advantage conferred upon the already obscenely overprivileged.

It might be time for Canadians to broaden their horizons and start getting angry about what happens behind oak-panelled doors in Geneva, or in air-conditioned offices in the Caymans. By all means, let’s keep watching the politicians. But to put it in terms we can all understand, $7.8 billion a year buys 487,500,000 glasses of overpriced orange juice.