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Bill Morneau.

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Massive Capital Gains, donate to charity, I wonder what the tax will be on the gains?

er 26, 2017 1:11 pm
Updated: October 26, 2017 1:54 pm

Morneau says he will donate millions in capital gains amid ongoing controversy

By Monique Scotti National Online Journalist, Politics  Global News

Finance minister Bill Morneau says he will donate profits made on Morneau Shepell shares.

Finance Minister Bill Morneau is adding a new item to his to-do list following an uproar over his personal finances, saying he will donate some of the money he makes on the sale of his family’s shares in Morneau Shepell to charity.

Morneau made the announcement during Question Period in the House of Commons, following a meeting with Federal Ethics Commissioner Mary Dawson.

“I had a constructive discussion with the ethics commissioner this morning,” the minister said, adding that he informed Dawson of “the intent of myself and my family to donate any difference in value in my family shares from the time I was elected on Oct. 19, 2015, until now.”

It’s unclear exactly how much money that could represent, but the share price for Morneau Shepell in mid-October 2015 was $15.50 per share. Today, it sits at $21.10, meaning that Morneau’s over one million shares could net him a two-year profit of $5.6 million upon their sale.

But the opposition Conservatives fired back, saying that if Morneau hadn’t held on to the shares in his former company after he was elected, “he wouldn’t have had those profits in the first place.”

Conservative finance critic Pierre Poilievre then asked if after donating the profits to charity, Morneau would also donate any resulting tax savings he receives next spring via the federal charitable tax credit.

The minister did not answer that question directly.

Outside the House of Commons, Morneau said he has not decided which charity or charities would receive the money. He also would not confirm an approximate sum of $5.6 million, saying his financial advisors will need to connect with the ethics commissioner’s office first.

The NDP’s Nathan Cullen called the move “an admission of guilt.”

“From my experience, people don’t generally pay a fine or a fee if they’re innocent of something.”

The Conservatives and NDP have been attacking Morneau for weeks now over his failure to place his assets in a blind trust or sell them.

Morneau was able to retain indirect control over the shares legally by placing them in a corporate structure involving two companies, one registered in Ontario and the other in Alberta.

Amid the controversy, Morneau announced last week that he would move all remaining assets into a blind trust. He said he will then sell them off in a way that respects the law governing conflict of interest on Parliament Hill.

In doing so, the minister said, he is going above and beyond what Dawson initially told him was necessary after he was elected to the House of Commons

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The NDP’s Nathan Cullen called the move “an admission of guilt.”

“From my experience, people don’t generally pay a fine or a fee if they’re innocent of something.”

So what 'experience'  does Nathan Cullen have?


I am not one to criticize Morneau for anything he has done.  It is too bad that he is a Liberal and being controlled like a puppet by Trudeau's backroom team  of Lieberals.  I would not blame him for quitting and going back to non-public life.

I think of him as a Big f****** disappointment for not bucking the PMO and getting the job of controlling the government expenditures.

We are now set up for a replay of Trudeau 1st with a built in deficit.

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I don't begrudge him his $$$$$  , just wish I had some too. :D  As far as being a tax cheat, it appears that every thing he has done is allowed within the current laws, so def not a "cheat".  I too would be surprised that he does not say "piss on it" and return to a more peaceful existence. 

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The whole problem Jaydee is that even a critical minister of this government has no control over what he can say and do.

The PMO controls everything.

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“ Bill Morneau can't fix the problem, because clearly the problem is him

Had Morneau's failure to divest not been reported, he would still own the shares, still be legislating in ways that affect their value, still in secret “

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October 28, 2017 9:18 am
Updated: October 28, 2017 9:25 am

COMMENTARY: Liberals need to come clean on Morneau conflicts

News Talk 770
Rob Breakenridge By Rob Breakenridge Radio Host  Global News
<img class="story-img" src=";strip=all&#038;w=282&#038;h=188&#038;crop=1" alt="Canada&#039;s Finance Minister Bill Morneau receives a standing ovation before delivering the Fall Economic Statement in the House of Commons on Parliament Hill in Ottawa." />;Canada's Finance Minister Bill Morneau receives a standing ovation before delivering the Fall Economic Statement in the House of Commons on Parliament Hill in Ottawa.

Canada's Finance Minister Bill Morneau receives a standing ovation before delivering the Fall Economic Statement in the House of Commons on Parliament Hill in Ottawa.

REUTERS/Chris Wattie

There’s an old joke about Question Period in the House of Commons: something to the effect of “there’s a reason it’s not called Answer Period,” although I suppose you’d have to be pretty cynical to appreciate the humour.

Lately, the Liberals have become a living embodiment of that joke as they deflect and dodge legitimate questions about Finance Minister Bill Morneau and the potential conflicts of interest he may have placed himself in. Almost every time the opposition press the government on these questions, the Liberals instead fall back on their talking points about how well the economy is doing or how much the finance minister is doing to help Canadians.

READ MORE: Morneau Shepell: We won’t make big money off pension bill tabled by Bill Morneau It’s bizarre logic since it would follow then that if the economy was doing poorly or we were in a recession, then Morneau’s apparent ethical lapses would be more relevant. In reality, the two things have nothing to do with one another and the Liberals are making a mockery of Parliament — and insulting Canadians in the process — by refusing to answer these entirely legitimate questions.

Now, with every step Morneau takes to try and make this controversy go away — announcing that he’s selling off his shares in his family company Morneau Shepell Inc. (MSI), announcing that he’s establishing a blind trust for his assets, announcing that he’ll donate any capital gains he hears from selling those shares — it simply begs more questions. Why didn’t he do all of this two years ago? Is this an admission that he made a mistake by not doing so?

At least on the latter, we have an answer. Morneau told Global’s Vassy Kapelos that he does not believe he did anything wrong, or that any mistakes were made along the way. So presumably then this is all for show, which just makes the whole exercise seem even more cynical.

READ MORE: Journalists are Canadians too, Finance Minister Bill Morneau acknowledges

So, if the Liberals are going to sound like broken records with their scripted and irrelevant answers, then it forces the opposition and the media to sound like broken record by repeatedly asking the same questions — questions to which Canadians deserve answers.

For example, why did Morneau own the shares in MSI through numbered companies? Why was one of those numbered companies registered in Alberta (a lovely province, but one in which the finance minister has never resided)?

Moreover, though, has Morneau recused himself from decisions that could potentially impact MSI, most notably Bill C-27, which Morneau himself personally tabled? That legislation would allow for so-called target benefit pension plans, something that’s right up MSI’s alley. So if Morneau didn’t recuse himself from shaping decisions that could benefit MSI, why not? What did the prime minister know, and what did he advise his finance minister?

Even the ethics commissioner herself has now expressed concerned with regard to Morneau’s involvement with Bill C-27.


Additionally, we’ve since learned of contracts MSI has with none other than Bombardier, again raising questions about whether Morneau would have recused himself from any government decision to assist Bombardier, which would, by extension, be of benefit to MSI.

We have no idea the answers to these questions and there’s no reason at all why that should be the case.

It was obvious two years ago that this was a potential minefield for the Liberals, and the most charitable explanation for their bizarrely blasé handling of all of this is that they were extremely naïve. The fact, though, that they cannot answer even the most simple and basic questions about their decisions on whether Morneau recused himself when obvious conflicts arose suggests something much more damning than mere naivety.

Justin Trudeau himself promised Canadians two years ago that his government would “set a higher bar for openness and transparency in Ottawa.” It would appear, then, that we can add another to the list of broken Liberal promises.

Rob Breakenridge is host of “Afternoons with Rob Breakenridge” on Calgary’s NewsTalk 770 and a commentator for Global News.

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Jaydee: since you started this topic, I know you will find the following interesting:

October 29, 2017 9:09 am

Bill Morneau: ‘No regrets’ about choice to pursue political career after another tense week

By Monique Scotti National Online Journalist, Politics  Global News

WATCH: Finance Minister Bill Morneau tells Vassy Kapelos that he has not yet decided where he will donate his company earnings following his meeting late last week with the ethics commissioner.

Bill Morneau says he has “no regrets” about entering politics in late 2015 and becoming Canada’s finance minister, in spite of another long week of turmoil surrounding his personal finances and alleged conflicts of interest.

During an interview with The West Block‘s Vassy Kapelos, Morneau stopped short of addressing possible regrets surrounding the decisions he made linked to his stock portfolio, registered companies and other personal financial matters.

“We don’t have do-overs in life,” Morneau said when asked if he might make different choices.

“Let me tell you what I absolutely don’t regret. I don’t regret deciding to get into public life. I don’t regret having the opportunity to make a huge difference for our country.”

WATCH: Morneau to donate millions but says that’s no admission of wrongdoing


Morneau has faced more than two weeks of sharp criticism after it was revealed he had maintained indirect control of his shares in his former company, Morneau Shepell, via two registered corporations, and failed to disclose a company in France that held his private villa.

On Thursday, things got even worse as Ethics Commissioner Mary Dawson’s office confirmed she will look into the possibility of investigating Morneau for his involvement in a bill that would affect pensions and have a direct impact on his former firm.

WATCH: ‘Ethical cloud’ looms over Morneau despite strong economic outlook, says NDP


Morneau maintains he has always followed Dawson’s recommendations “to the letter,” that he broke no laws and that he has maintained appropriate conflict of interest screens.

“People are asking whether that’s good enough for a finance minister, and that’s new,” Morneau noted.

“I believe that when people have questions, you need to listen to those questions and decide if there’s a way that you can assure people that they’re not something they need to be concerned with.”

He would not say, however, if he understood why concerns were raised in the first place.

Charitable donation

The minister also addressed his pledge to donate a portion of the profits he makes on the sale of his shares in Morneau Shepell (which he says will be placed in a blind trust first) to charity. The amount is estimated to be over $5 million, but Morneau said he doesn’t know for certain yet where it will go.

READ MORE: Will Morneau’s political naivety be his downfall?

Some possibilities include Covenant House, a shelter for at-risk youth in Toronto and St. Michael’s Hospital, which serves inner-city Toronto, he said.

“Right now my wife and I are working to bring some refugee girls from a school that we founded in a refugee camp in Kenya to Canada in order to get a university education,” he added.

“So these are all ideas, but I don’t actually have an answer to your question yet.”

For now, Morneau said, he remains eager to refocus attention on the work the government is doing. The opposition NDP and Conservatives, however, aren’t so eager to change the channel.

“If there’s something that I can do to make sure that people have absolute confidence, I’ll do it,” Morneau said.

— Watch the full interview with Finance Minister Bill Morneau

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For a guy that is allegedly at the top of his game, h sure has problems answering a straightforward question.

He still thinks he can get away with it.

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Appears that there are others who will need to step up to the table.

Morneau not the only cabinet minister using conflict-of-interest loophole: ethics watchdog

Mary Dawson's office says 'fewer than five cabinet ministers' hold controlled assets indirectly

CBC NewsPosted: Oct 30, 2017 1:53 PM ET Last Updated: Oct 30, 2017 2:27 PM ET

Ethics Commissioner Mary Dawson is considering whether to launch a formal investigation into whether Finance Minister Bill Morneau had a conflict of interest in sponsoring a pension bill known as Bill C-27 while still owning shares in his family's pension company. (Sean Kilpatrick/Canadian Press)

Finance Minister Bill Morneau isn't the only cabinet minister who used a conflict-of-interest technicality to maintain control of their assets while in power, the ethics watchdog confirms.

The office of Conflict of Interest and Ethics Commissioner Mary Dawson wouldn't identify who else at the cabinet table holds controlled assets indirectly. It would only confirm "fewer than five cabinet ministers" do so, and they are not required to sell those assets off or put them in a blind trust.

The story was first reported by the Globe and Mail on Monday morning.

The Conflict of Interest Act covers assets that are directly held, a loophole Dawson has complained about.

The act defines controlled assets as "assets whose value could be directly or indirectly affected by government decisions or policy," and include things like publicly traded securities of corporations, registered retirement and education plans and stock options.

After being dogged by controversy over the shares and his use of private corporations to hold his assets, Morneau announced earlier this month that he would place his assets in a blind trust and divest shares worth about $20 million in his family-built company.

He later said he would donate to charity the difference in the value of his shares in Morneau Shepell between when he was elected in October 2015 and the day they're sold.

Dawson is now considering whether to launch a formal investigation into whether Morneau had a conflict of interest in sponsoring a pension bill known as Bill C-27 while still owning shares in his family's pension company.

Conflict screen used by Morneau in place for at least three other ministers


The Canadian Press
Published Monday, October 30, 2017 3:55PM EDT

OTTAWA -- At least three other members of Prime Minister Justin Trudeau's cabinet have personal financial arrangements similar to the setup that has landed Finance Minister Bill Morneau in hot water, despite the blessing of the federal ethics commissioner.

Fisheries Minister Dominic LeBlanc, Justice Minister Jody Wilson-Raybould and Infrastructure Minister Amarjeet Sohi are using so-called conflict-of-interest screens, a step short of the blind-trust gold standard for politicians seeking to avoid the sort of controversy Morneau now finds himself in.

Sohi says he has a screen in place to prevent him from participating in decisions that could benefit his wife's holdings in a company that is also a partial owner of farmland in Alberta.

He says the screen is an effective tool that has already seen him removed from the approval process for an infrastructure project, proposed by the province, that would be in close proximity to the farmland.

In response to accusations that he's personally profited from decisions he's taken as finance minister, Morneau has promised to sell off $21 million worth of shares in his family's company and place the rest his substantial assets in a blind trust.

Morneau, who says he was never in a conflict of interest amid questions about his work to spearhead pension-reform legislation, has promised to donate to charity any gains in the value of his Morneau Shepell shares since he was elected two years ago.

Ethics commissioner Mary Dawson has said she told Morneau a blind trust wouldn't be necessary, since his shares were indirectly held through private companies and were therefore not considered a controlled asset under the Conflict of Interest Act.

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enough about Bill :D

Former Liberal Party chief fundraiser Stephen Bronfman implicated in Paradise Papers Staff
Published Sunday, November 5, 2017 1:53PM EST
Last Updated Sunday, November 5, 2017 2:07PM EST

Queen Elizabeth II, former Liberal Party fundraiser Stephen R. Bronfman and several of Donald Trump’s allies are said to be among 120 international figures and companies who have been exploiting secret offshore tax havens to protect their wealth, an international team of journalists has learned.

The secretive financial dealings are documented in the so-called “Paradise Papers,” a trove of 13.4 million documents originally leaked to the German paper Süddeutsche Zeitung from an offshore law firm called Appleby. The documents have been the subject of a massive investigation by the International Consortium of Investigative Journalists – the same group that dropped the Panama Papers bombshell in April of 2016.

The Paradise Papers include nearly 7 million financial documents and emails revealing the offshore interests and activities of “more than 120 politicians and world leaders, include Queen Elizabeth II,” according to the ICIJ. The group says details about the Queen indicate that her “private estate indirectly invested in a rent-to-own loan company accused of predatory tactics.”

The federal Liberal Party’s former chief fundraiser, Stephen R. Bronfman, was the first high-profile Canadian name revealed from the Paradise Papers. The documents suggest Bronfman’s private investment company, Claridge, moved millions to offshore entities owned by his godfather, Leo Kolber, another former Liberal fundraiser. The ICIJ says Bronfman “may have avoided taxes in Canada, the United States and Israel, via a family trust, shell companies and accounting moves questioned by experts.”

A lawyer for the Bronfman and Kolber families told the ICIJ that “none of the transactions or entities at issues were effected or established to evade or even avoid taxation,” and that they “were always in full conformity with all applicable laws and requirements.”

Any “suggestion of false documentation, fraud, ‘disguised’ conduct, tax evasion or similar conduct is false, and a distortion of the facts,” he said.

A spokesman for Trudeau declined to comment.

At least 13 allies of U.S. President Donald Trump are also included in the Paradise Papers, the ICIJ says. The ICIJ mentioned Trump’s commerce secretary, Wilbur Ross, by name in their release on Sunday, saying that he holds “interests in a shipping company that makes millions from an energy firm whose owners include Russian President Vladimir Putin’s son-in-law and a sanctioned Russian tycoon.”

Further details about the figures implicated in the Paradise Papers are expected to come throughout the week.

CBC Investigates

Trudeau's chief fundraiser linked to Cayman Islands tax scheme

Massive offshore leak reveals secrets of Stephen Bronfman's company

By Harvey Cashore, Chelsea Gomez, Gillian Findlay, CBC NewsPosted: Nov 05, 2017 1:00 PM ET Last Updated: Nov 05, 2017 1:49 PM ET

Stephen Bronfman, left, is the chief fundraiser for the Liberal Party and a long-time friend of Prime Minister Justin Trudeau, right.

Stephen Bronfman, left, is the chief fundraiser for the Liberal Party and a long-time friend of Prime Minister Justin Trudeau, right. (Andrew Vaughan/Canadian Press)

In the early summer of 2015, Justin Trudeau was the star attraction at a private fundraiser in Montreal hosted by philanthropist and financier Stephen Bronfman.

Bronfman, an heir to the Seagram family fortune and a close Trudeau family friend, was revenue chair of the Liberal Party. That day, according to news reports, the two men raised $250,000 in under two hours.


Within weeks, the Liberals would launch their federal election campaign, sweeping to power on a "Real Change" platform that focused on the middle class and a promise to tax the rich.

"Our government has long known — indeed, we got elected — on a promise to make sure that people were paying their fair share of taxes," Trudeau said shortly after his election victory. "Tax avoidance, tax evasion is something we take very seriously."

But an investigation by the CBC, Radio-Canada and the Toronto Star has found that Bronfman and his Montreal-based investment company, Claridge Inc., were key players linked to a $60-million US offshore trust in the Cayman Islands that may have cost Canadians millions in unpaid taxes.

Paradise Papers-logo





It's a 24-year paper trail of confidential memos and private records involving two prominent families with Liberal Party ties that experts say appear to show exploitation of legal tax loopholes, disguised payments and possible "sham" transactions.


Among the key questions raised:


  • Is the trust subject to Canadian tax law?
  • Was the trust managed offshore — or in Canada?
  • Were "gifts" made to disguise payments?
  • Were there false invoices?
  • Are taxes owed in Canada?


"I would say there are lots of red flags, and I would expect tax authorities specifically to be very interested in following up," said University of Florida trust law professor Grayson McCouch after spending two days examining the files.

Denis Meunier, a former senior enforcement official at the agency who also reviewed key documents in the leak, said "this definitely merits an audit by the [Canada Revenue Agency]."


Part of massive financial data leak


The documents are part of a massive offshore leak released today dubbed the "Paradise Papers," which was obtained by the German newspaper Sueddeutsche Zeitung and shared with the International Consortium of Investigative Journalists (ICIJ). It's a cache of nearly 13.4 million files from two offshore services firms and 19 different tax havens.

Seven million of the leaked files come from the corporate law firm Appleby, which has operations in Bermuda, the Cayman Islands and other offshore jurisdictions. 


Paradise Papers: The scope




The CBC/Toronto Star investigation also reveals how Bronfman's longtime law firm — which also represented other offshore clients — helped mount a lobbying campaign in Ottawa that for several years fought legislation designed to crack down on offshore trusts.




At the centre of the revelations is an offshore entity in the Cayman Islands called the Kolber Trust. It was set up in 1991 by Leo Kolber, who at the time was Claridge chairman and also a Liberal senator. Kolber had been a major Liberal Party fundraiser and once jokingly referred to himself as the Bronfman family's "consigliere."


The Paradise Papers show that Leo Kolber's children, Jonathan and Lynne, were the beneficiaries of the trust. Internal financial records show they received millions of dollars in "disbursements."


In 2007, for example, $3 million US was wired to Jonathan Kolber for "living expenses" and to help purchase a Manhattan apartment. In total, he received $16.5 million US tax-free from the trust. The documents also show his sister Lynne received $1.2 million US.

The Kolber Trust had another purpose, too. The Bronfman empire was expanding into Israel and, after working for Claridge in Montreal alongside his father and Stephen Bronfman, Jonathan Kolber then moved to Israel in 1991 to head up the Bronfman efforts.

According to one memo, "for every dollar the Bronfmans invested in Israel Jonathan's reward was a 15 per cent share" paid through the trust. "This is how and why the trust was set up."


The Paradise Papers show that senior executives of Stephen Bronfman's company, Claridge, were routinely offering advice and arranging business transactions between the Bronfman family and the Kolber Trust.


In addition to the beautiful beaches, the Cayman Islands are known as a 'tax neutral jurisdiction,' where foreign companies pay no tax. (David McFadden/Associated Press)


The leaked documents reveal that while Claridge had no official role in the Kolber Trust, most of the initial funding came from the Bronfman family in various forms. Stephen Bronfman personally gave a $5 million US interest-free loan to the Trust in 1997, which was repaid in five months.


Over the lifetime of the trust, the Bronfman family and their U.S.-based trusts loaned the Kolber Trust more than $34 million US. And all of it ended up in the no-tax Cayman Islands.


Stephen Bronfman and Leo Kolber declined requests for an interview. William Brock, a lawyer representing Stephen Bronfman and Jonathan Kolber, denied any impropriety. "My clients have always acted properly and ethically, including fully complying with all applicable laws and requirements."


He stated that any "suggestion of false documentation, fraud, 'disguised' conduct, tax evasion or similar conduct is false."


Managed in Canada?


Offshore trusts can be perfectly legal. They are not subject to Canadian law so long as they meet certain conditions.

And for the Canada Revenue Agency, the most important rule for offshore trusts is that they really did have to be offshore — that's where the decisions, the so-called "mind and management," had to be made.

Yet the Paradise Papers — which contain more than 5,000 documents from the Kolber Trust file alone — reveal numerous examples where decisions were made and approved not in the Caymans, but in Canada.

There are memos seeking the "approval," "authorization" and "written confirmation" for business decisions from Montreal-based investment manager and accountant Don Chazan. The Paradise Papers also show there are phone calls and meetings in Montreal between Chazan and Jonathan Kolber.

Leo Kolber

Leo Kolber was a major Liberal Party fundraiser, and once jokingly referred to himself as the Bronfman family’s 'consigliere.' (Fred Chartrand/Canadian Press)


Chazan also kept a set of Kolber Trust books in Montreal, two former colleagues told the CBC.


"He was the advisor. He's the guy who made the decisions," Jonathan Kolber told the CBC in a phone interview.


Tax experts consulted by the CBC and the Toronto Star say that admission could spell tax trouble for the Kolber Trust.


"If that's true, then obviously there's a strong argument the trust was managed in Canada and potentially resident in Canada," said Dalhousie tax law professor Geoffrey Loomer.


William Brock, the lawyer for Stephen Bronfman and Jonathan Kolber, said that "all investment and other decisions" in the Kolber Trust were made by Cayman Islands trustees.

He also denied suggestions that Montreal accountant Don Chazan kept a set of Kolber Trust books in Montreal.

"Contrary to your unfounded assertion there was no second set of books," Brock said.






However, Rick Doyle, a former vice-president of Claridge told CBC that Chazan was keeping a second set of books. "That's what my understanding [was of] why Don Chazan was there."


Ken Shettler, an accountant who worked with Chazan, also said that Chazan did bookkeeping in Montreal, at the request of Jonathan Kolber, who was skeptical of records kept in the Cayman Islands. "He [Jonathan Kolber] didn't have confidence in their accounting so basically we were another set of books."


All that activity in Montreal could spark the interest of the Canada Revenue Agency, said Sherbrooke University professor Marwah Rizqy.


"If at the end of the day the major decisions are taking place here, the mind in management is in Canada," Rizqy said. If so, said Rizqy, that could have tax implications for the Kolber Trust in Canada.

In a second letter to CBC News, Kolber's lawyer, William Brock, said Chazan was engaged by Jonathan Kolber directly, and not through the Kolber Trust, to "confirm that all financial transactions of the Kolber Trust had been properly recorded."


Disguised payments?


The Paradise Papers appear to show that the Bronfmans and Kolbers were themselves concerned about links from Canada to the Cayman Islands and the possible tax implications.


One Paradise Papers memo states, "tax advisers for the Bronfmans and the Kolber family advised" that the work of a Montreal accounting firm not be billed as expenses of the trusts.

Emails and documents show in 2006, they were concerned about an $81,750 US invoice for work on the Kolber Trust paid out to Don Chazan.


The tax advisors recommended the payment be taken off the books and "allocated" instead as "loan repayment" to a third party. "This results in one less formal link between the trusts and entities outside Cayman," says the memo.


"That looks very suspicious," said McCouch, the University of Florida tax expert. "It looks like it was intended to mislead. It looks as if it was intended to conceal and to misrepresent the nature of the payment."

Kolber's lawyer, William Brock, said there is "nothing inappropriate in noting" there would be "one less formal link" between Canada and the Kolber Trust. Brock stated that essentially all of Mr. Chazan's services were rendered in the Cayman Islands."

The Paradise Papers show that Chazan visited the Cayman Islands trust company once a year.  



Avoiding U.S. taxes?


In 2007, the Kolber Trust had a tax problem south of the border. Lynne Kolber was living in the U.S., but had apparently failed to declare payments of $1.27 million US out of the trust for the previous decade. She paid the back taxes, but the trust managers devised a plan to make sure that going forward, she would keep getting funds tax-free.



CBC used a slightly different methodology than ICIJ and found more than 100 additional Canadian entities in the data.



In 2007, Lynne Kolber was removed from the paperwork as a beneficiary. A memo contained in the Paradise Papers stated that Lynne will be "taken care of in other ways" and her brother Jonathan "will arrange to make gifts to her instead."

"Jonathan will arrange to make gifts to her instead of the trust making the present distributions to her," the 2007 Paradise Papers document states.

Gifts between family members are not taxable in the U.S., so it might have seemed like a simple solution. But McCouch said it may have violated tax rules.


"I would think the IRS would be very interested in this," he said, describing it as "precisely the sort of abusive transaction" U.S. authorities have tried to crack down on.

The answers CBC News received from Jonathan Kolber's lawyer about these gifts appear contradictory.

In a first letter to the CBC, William Brock defended the decision in 2007 to make gifts to Lynne Kolber through her brother, instead of direct "distributions" from the trust.

"Jonathan Kolber made gifts to his sister, who is an artist and a writer," Brock wrote. "Making a gift to your sister is not tax evasion and any pretention [sic] to the contrary would clearly be improper."

In a second letter, Brock stated that after 2007, there were "no gifts made by Jonathan Kolber."


False invoices?


The Paradise Papers also describe how two of Bronfman's senior executives intervened to help sort out another problem Jonathan Kolber was having in the U.S. In 2002 Claridge agreed that a $4 million US loan to the Kolber Trust would be interest free.


In the U.S., however, that debt had to be interest-bearing.

So the executives at Claridge came up with a plan. Their solution: Jonathan Kolber would get the interest payments back by invoicing Claridge a fee "for services rendered" equal exactly to the interest payments.


As one email to Kolber in the Paradise Papers states, the loan was "only in form" and not in "substance."


"Well, that's a smoking gun right there," said Rizqy, noting that kind of transaction might have broken tax laws. "Actually, it is very bold to write down."


Kolber's lawyer, William Brock, insisted that "no invoices were sent and nothing was paid."


But former Claridge executive Rick Doyle confirmed that Jonathan Kolber did indeed invoice Claridge for services. "He started charging services at a small amount," Doyle told CBC News. "We are not talking gobs of money here. He wasn't making a profit on it, he just wasn't losing money at the end of the day."


McCouch said there is a legal risk that any such side agreement between Claridge Investment and Jonathan Kolber may be viewed as "sham."


"To an observer, particularly a revenue service, it could look like evidence of fraudulent intent."


Taxes owed in Canada?


Through his lawyer, Jonathan Kolber said that  when the trust was set up in 1991, it was not for tax reasons but  because "new residents migrating to Israel were recommended to establish trusts" because of volatility in the Middle East.

After more than two decades of a tax-free existence in the Caymans, the Kolber Trust faced political headwinds of a different kind in 2013 when the House of Commons passed legislation, retroactive to 2007, that would tax Canadian-sourced contributions to offshore trusts.


Stephen Bronfman at the Liberal caucus

An investigation by CBC/Radio-Canada and the Toronto Star has found that Stephen Bronfman and his investment company Claridge Inc. were key players linked to a $60-million US offshore trust in the Cayman Islands. (Andrew Vaughan/Canadian Press)



In 2014, Israel also tightened its offshore trust laws, and by 2016, the Kolber Trust was shut down.


The Paradise Papers show that Jonathan Kolber, an Israeli citizen, had been worried his connection to certain investment funds held by the Kolber Trust would present a "major difficulty" with Israeli tax authorities.


Kolber and his lawyers decided to prepare a draft "settlement agreement" for Israeli tax authorities. But in so doing, they may have exposed themselves to problems back in Canada.


Kolber's disclosure to Israel includes one line that directly links the trust to Canada: "The source of the Trust's assets is the father of the Beneficiary, who is a resident of Canada," the draft settlement stated, referring to former Senator Leo Kolber.


The new tax legislation in Canada had targeted Canadian-sourced contributions to offshore trusts. So, did Kolber or any of his Canadian advisers notify the tax authorities in Ottawa about his settlement with the Israelis?


"We understand that the application was not sent to anyone in Canada," his lawyer William Brock said. He said that according to their interpretation of the tax rules, Kolber's trusts were never "liable for Canadian taxation."  

Dalhousie tax professor Loomer said CRA might take a different view on the Israeli settlement, adding there's a possibility millions may be owed in Canada.

"I think the CRA would be interested to see that statement," Loomer said.

CBC News and the Toronto Star asked Prime Minister Trudeau for a comment on what he thought about Stephen Bronfman's involvement in an offshore trust, in light of his position as chief fundraiser for the Liberal Party.

"Given you are referring to Mr. Bronfman's role in the Liberal Party, I would direct your questions to the party," Trudeau's spokesperson, Cameron Ahmad, said.

The Liberal Party spokesperson, Braeden Caley, said Bronfman serves on the party's national board "as a volunteer" and assists the party on "fundraising support, not policy decisions."

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4 hours ago, Fido said:

So what.

So this::D


CRA says it won’t hesitate to investigate Canadian tax cheats exposed in Paradise Papers

‎Today, ‎November ‎5, ‎2017, ‏‎2 hours ago | The Canadian Press

OTTAWA — The Canada Revenue Agency says it won’t hesitate to investigate new evidence of offshore tax evasion in the wake of a second massive leak of tax haven financial records.

The leak of some 13.4 million records, dubbed the Paradise Papers, lifts another veil on the often murky ways in which the wealthy — including more than 3,000 Canadian individuals and entities — stash their money in offshore accounts to avoid paying taxes.

Among the names that pop up in the records with some connection to offshore accounts are former Canadian prime ministers Brian Mulroney, Paul Martin and Jean Chretien, the Queen, U.S. commerce secretary Wilbur Ross, and the past and current chief fundraisers for the federal Liberal party.

Neither the CRA nor any court has determined the Canadians did anything wrong.

Offshore accounts are used by wealthy individuals and corporations around the world as a perfectly legal way to reduce their tax burden, although the anonymity provided to account holders has also led to associations with tax evasion, money laundering and organized crime.

The Paradise Papers were obtained by German newspaper Suddeutsche Zeitung and the International Consortium of Investigative Journalists, including CBC/Radio Canada and the Toronto Star which published details on Sunday.

The media outlets did not disclose how they acquired the documents, which consist primarily of client records of offshore law firm Appleby, as well as some records from offshore corporate services firms Estera and Asiaciti Trust.

In an apparent attempt to pre-empt the news reports, the CRA issued a statement last Friday, detailing the agency’s efforts to crack down on tax evasion and tax avoidance, which intensified following the first huge leak of tax-haven records, known as the Panama Papers, in April 2016.


The agency said it’s invested $1 billion to tackle the problem and currently has more than 990 audits and more than 42 criminal investigations underway related to offshore tax havens.

As a result of audits over the last two years, the CRA said it identified some $25 billion in unpaid taxes, interest and penalties. And last year, it levied more than $44 million in penalties on tax advisers who facilitated non-compliance with Canadian tax laws.

The agency said it’s also working closely with 36 other countries in the Joint International Taskforce on Shared Intelligence and Collaboration on more effective ways to detect and deal with tax evasion and avoidance.

Evidently anticipating Sunday’s release of the Paradise Papers, the CRA promised to do more should new details of questionable practices emerge.

“In the event that further details come to light, CRA will not hesitate to investigate and take further action as warranted,” the agency said.

“The government of Canada will continue to work with the provinces and territories, as well as other tax administrations and all other partners, to ensure a tax system that works for Canadians. In addition, the CRA will continue to build on its capacity to detect and crack down on tax cheats and ensure that those who choose to break the law face the consequences and are held accountable for their actions.”

A spokesman for National Revenue Minister Diane Lebouthillier, said on Sunday that “the CRA is reviewing links to Canadian entities and will take appropriate action in regards to the Paradise Papers.”

Tax avoidance measures involving offshore trusts are legal, provided that the trust is genuinely managed offshore and that Canadian taxes are paid on any Canadian contributions.

According to the Toronto Star and CBC/Radio Canada, the records suggest that Stephen Bronfman and his family’s Montreal-based investment company, Claridge Inc., were linked to an offshore trust in the Cayman Islands that may have used questionable means to avoid paying millions in taxes.


Justin Trudeau with Stephen Bronfman.

Bronfman is a close friend of Prime Minister Justin Trudeau, who tapped him in 2013 to fill the role of revenue chair — effectively, the chief fundraiser — for the federal Liberal party.

The offshore trust also involved former chief Liberal fundraiser and senator Leo Kolber and his son, Jonathan Kolber.

William Brock, a lawyer for Bronfman and Jonathan Kolber, denied any impropriety, telling the CBC that his clients “have always acted properly and ethically, including fully complying with all applicable laws.” Any suggestion of “false documentation, fraud, ‘disguised’ conduct, tax evasion or similar conduct is false,” Brock added.

The Prime Minister’s Office referred questions about Bronfman to the Liberal party.

Party spokesman Braeden Caley said Bronfman’s role is strictly a volunteer position devoted to fundraising, “not policy decisions.” The revenue chair is a “non-voting position” on the party’s national board, Caley added.

Conservative leader Andrew Scheer issued a statement on Sunday accusing Prime Minister Justin Trudeau of failing to crack down on “tax avoidance schemes used by his wealthy friends.”

“Justin Trudeau’s well-connected Liberal friends get away with paying less, and you pay more. There is nothing fair about that,” the statement said.


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Standard story; the rich guy is trying to keep his money in his pocket and not give it away to others that didn't earn it.

Right, wrong, or otherwise, someone may get their hand slapped, but nothing will change overall so long as the Left keeps requiring high earners to contribute ridiculously high percentages of their wealth in taxes.




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Please please please let the turds or Morneaus's name come up in the investigation.....thought we had them with the kpmg farce but that investigation was shut down by the party that is all for transparency.

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Just now, st27 said:

Please please please let the turds or Morneaus's name come up in the investigation.....thought we had them with the kpmg farce but that investigation was shut down.


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So let me get this straight... EVERYONE knew this was going on and the CRA only just figured it out?

People were getting off cruise ships and running into town in tax havens to open accounts for years.  Some banks even catered to it.  Anyone could get in on the act.

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Ethics watchdog opens investigation into Bill Morneau over conflict-of-interest concerns

‎Yesterday, ‎November ‎10, ‎2017, ‏‎6:46:39 PM | Brian Platt

Canada’s ethics commissioner has opened a formal examination into whether Finance Minister Bill Morneau put himself into a conflict of interest by introducing pension legislation while holding a million shares in the human resources company his family started.

The announcement injects new fuel into a controversy that has dominated parliament for weeks, as Morneau has been bombarded with questions about why he hadn’t divested or placed his Morneau Shepell shares into a blind trust following his election in 2015. He sold off the shares in late October, but has insisted he never broke any rules.

Both the Conservatives and New Democrats had earlier written to Conflict of Interest and Ethics Commissioner Mary Dawson with concerns over Morneau’s personal finances. Late Friday, they released her response that confirmed an investigation.

“In light of the information provided in your letter as well as the information gathered by my office, I am of the view that I have reasonable grounds to commence an examination under subsection 45(1), and have so informed Minister Morneau,” says a letter to the NDP’s Nathan Cullen, dated Nov. 10, 2017. A similar letter was sent to Conservative MP Pierre Poilievre.

Citing 45(1) of the Conflict of Interest Act means Dawson is examining the matter because of her own information gathered about the incident, not simply because a parliamentarian requested her to.

“If the Commissioner has reason to believe that a public office holder or former public office holder has contravened this Act, the Commissioner may examine the matter on his or her own initiative,” the clause says.


Finance Minister Bill Morneau.

Poilievre said an investigation was basically inevitable once the facts were out.

“It’s actually really simple: The finance minister owned millions of dollars in shares in a pension administration company, while he introduced a bill on pensions,” he said. “Pretty cut and dry.”

Cullen said the Liberals have a lot to answer for — including why they haven’t yet committed to closing the ethics loophole that allowed Morneau to hold the shares in the first place. 

“It’s stunning, having a sitting finance minister under an ethics investigation,” he said.

The long-running saga over Morneau’s personal finances started in mid-October when his office acknowledged to the Globe and Mail that his Morneau Shepell shares had not been put into a blind trust, as had been widely assumed.

The opposition parties immediately pointed to the fact Morneau had introduced Bill C-27 in October 2016, legislation which would amend the Pension Benefits Standards Act by allowing federally regulated employers to set up target benefit plans. Morneau Shepell had publicly advocated for this change, though recently said in a statement it would not have “a material impact on our company.”

The legislation has not advanced to second reading debate since it was introduced.

On Oct. 19, Morneau held a news conference to say he would place all of his assets into a blind trust and divest his Morneau Shepell shares. He later met with Dawson to discuss whether more measures were necessary.

However, Morneau also shared a letter from Dawson’s office dated Feb. 2, 2016, where she had advised him a blind trust was not necessary. Dawson had determined the shares were not “directly held” by Morneau, because they were held by a numbered company (even though he was ultimately the sole owner of the company).

Instead, Dawson had advised Morneau’s office to set up a conflict-of-interest screen that required Morneau to be recused from decisions or discussions that specifically affected Morneau Shepell. These screens have been derided as ineffective by critics, however, because they don’t apply to decisions that have “general application.”

Morneau has been asked repeatedly whether he recused himself from discussions around Bill C-27, and has never directly answered the question. House of Commons records show he introduced C-27 for first reading on Oct. 19, 2016.

It’s not known how long Dawson’s investigation will take, but it may be lengthy. For most of the year, she has been examining the vacation taken by Prime Minister Justin Trudeau to the Aga Khan’s private island in December 2016, and it’s still not completed.

Further complicating matters, Dawson is serving as commissioner on an interim basis until January. Her term expired in 2016, but the Liberal government has been unable to find a permanent replacement, and still hasn’t named one.

In a statement, Morneau’s office said the minister has always followed Dawson’s recommendations and advice. “In this spirit, the Minister will answer any questions the Commissioner has on this matter,” it said.

• Email: | Twitter: btaplatt


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“ If Mr. Morneau is ultimately brought down by this, no one should cheer. It will not be a happy outcome. This isn't a case of a Finance Minister done in by terrible policy choices, nor does it appear to be the corruption of someone caught reaching into the cookie jar. Instead, it's been a kind of moral and procedural blindness – a blindness to the need to follow rules and principles that, when they were in opposition and somebody else was in power, the Liberals could clearly see. Everyone around Mr. Morneau gave him the benefit of the doubt, and he gave it to himself too – to such an extent that what's left is a lot of doubt.”

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Another perspective (taken from the above articles comments section):

"""". I take the opposite view to this editorial.

Mr, Morneau has been a terrible finance minister. Runaway deficits, marginal tax rates now well over 50%, not even a very long term plan to balance the budget. All this in the eighth year of an economic expansion and at a time where government revenues are being swelled by the unexpected windfall of higher tax revenues, largely due to the wealth effect associated with rising home prices. This is the time of the cycle where governments should be running surpluses. He should resign because he mismanaged the country's finances"

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