Victory: The power of one voice
In his 2013 budget, Finance Minister Flaherty announced sudden changes leading to the elimination of unintended benefits pertaining to the leveraging of insurance. These changes will result in the disappearance of a tax avoidance strategy (called 10-8 strategy) promoted by Insurance Companies and sold by unscrupulous advisors at an unimaginable cost to the taxpayers.
What you will not read in the newspapers such as Investment Executive is an important question. Why have these changes suddenly happened now? This tax avoidance strategy had been in existence for more than 15 years. Nobody was criticizing this strategy or asking for its removal. Well this was not entirely true. As part of my objective to clean up the insurance industry and the commercial practices of insurers, I had decided that the 10-8 strategy had to go. I was the only voice of reason but I intended to be heard unequivocally.
I was upset with the last budget of Finance Minister Flaherty which constituted an attack on the poorest in our society. As a socialist, I could not accept this state of affair. I could not accept that the poor were going to have to share the greatest of the burden of getting the budget balanced when the richest could implement tax avoidance strategies to avoid paying their share of taxes using the 10-8 strategy. I could not accept that the richest in this country could do this with the complicity of the Department of Finance and Revenue Canada. I could not accept to see teachers losing their position and jobs because of education cuts while Insurance Companies were telling their top advisors to sell this strategy to their richest clients in order to avoid paying taxes.
There is a point when enough is enough and you have to make a stand. I wrote a letter that I forwarded to Finance Minister Flaherty and the leaders of the major political parties and to different newspapers and journalists across Canada. I was never contacted by any journalists who seemed uninterested by such an unimportant topic as tax fairness. I was however told that Finance Minister Flaherty had forwarded my letter to the Department of Finance asking some very hard questions. I don’t believe Minister Flaherty likes to be surprised and I imagine what would have happened if this situation had been brought up in the parliament.
How could you defend a 10-8 strategy who would cost hundreds of millions of dollars in tax revenues and try to tell the poor they would have to retire later because we can’t afford paying them a retirement benefit.
No you will not find this story or my story in the newspapers because leaders fear such stories of what one person can accomplish.
However I am still angry. The Harper governments intends to offer a bailout to the people who have cheated the tax system. The people who entered into these arrangements, the advisors who sold them, the insurance companies who created these arrangements knew the risks and had been told by the Department of Finance it was tax avoidance. They still went ahead with these arrangements because they believe that they had the influence with the government to get a bailout when this arrangement was prohibited by the government. We, the taxpayers are rewarding the cheaters. This is what the Harper government has done by allowing these cheaters to withdraw funds from their life policies without paying taxes. How much is this going to cost the government? This is kept a secret from us. Would you rather have your taxes bailout your local school, your local business, go towards child hunger in Canada, health services or do you want your tax dollars go the rich and greedy cheaters?
I say NO to the Flaherty’s plan to bailout the cheaters!!!!
There is no way to change and to defeat the right wing agenda that now prevails in Canada until 2015. We can’t stop the cuts to our social programs. However my actions demonstrate that we can make a difference. We can win by fighting on another battlefield. This battlefield is the one where the rich avoid taxes. This battlefield is on the corporate welfare.
The more the Harper government asked sacrifices from the poor the more we have to put pressure on this government to close the tax loopholes available to the rich. This is a battle we can win.
I am proud of my contribution to this battle even if it will remain for the most part anonymous. Another one of my anonymous victories on the commercial practices of insurers is that I have literally force the Insurance Industry to acknowledge the existence of orphan policies and to declare these orphan policies as being illegal.
I am continuing my fight for
1) Orphan polices: now that the existence has been recognized I am working on addressing the problem through judicial procedure 2012-049
2) Segregated funds guarantees disclosure: I will start a very aggressive campaign to make disclosure of these guarantees mandatory.
3) One Pan Canadian regulator that would also include the insurance. I now have proof that provincial regulators have been complicit in letting insurance companies violate provincial insurance laws. I have started a judicial procedure to address this issue in the Superior Court of Quebec 200-17-016395-121 (to be soon published)
4) I am now working towards the creation of an organization of the defense of consumer rights in the financial industry.
5) Updating of insurance laws.