A Canadian study in greed. Tthey make over $100,000 as senators. Did they really need to cheat on expense claims as well?

By Ray Rivers.

Burlington, ON.  June 13, 2012.  – The one thing about giving advice on the economy is that you usually can find at least one person to agree with you and a lot of others who will disagree – almost no matter what advice you give.  Ergo, I got a healthy response to my message last week – that if we are contemplating adding to the tax burden; to build transportation infrastructure, pay off the debt, or whatever; we need to be thoughtful about how we do it.  We are a wealthy society, by anyone’s account; that is, unless you are middle-class or poor. 

Don’t you just love the political process.  These  are the few, the ones you hear about – there are thousands who serve diligently and honestly year after year.

 A 2008 study by Statistics Canada concluded that between 1980 and 2005, median earnings among Canada’s top earners rose more than 16 percent while those in the bottom fifth saw their wages dip by 20 percent.  Armine Yalminizyan, a senior economist at the Canadian Centre for Policy Alternatives, concluded that… “The biggest economic boom since the 1960’s has basically only boosted the rich, leaving the middle class stagnant and the poor worse off.  In the 1960s. as the economy grew this rapidly, almost everybody got a bigger piece.  In this generation of economic growth, the gains are accruing primarily to those on top.”  While we are looking forward to an updated report from Stats Can, we should be confident that this picture hasn’t improved.

 In the 1980‘s our governments, in Canada and the US, slashed the top tax rates and shifted the tax burden onto the middle classes.  Any first year economics student could have predicted the outcome of this deliberate adventure in retro-grade social engineering, and the winners and the losers that were created.  Trickle down economics, the silly notion that the poor live better when the rich get richer, is bogus and it’s nonsense.  The poor aren’t better off watching the wealthiest get even wealthier.  Cheap credit and cheap imports may make their lives seem richer, but in the end it is just more debt to pay back.  We are engaging in class warfare – not yet war, but wait for it.  Remember the ‘Occupy Movement’?

 According to a 2006 documentary, The One Percent, a mere 1% of Americans owned almost half the wealth in the USA.   In 2009 they earned 17% of the national gross income and took home over a trillion dollars.  Middle-income earners, by contrast have had to live on lower household incomes, adjusted for inflation, than they did in 1996.  The Conference Board of Canada places Canada sixth worst, behind the US and UK on their ‘inequality index’.  Still, the rapid growing decade from 1997 to 2007 saw the top income earning 1% of Canadians take home fully a third of our increase in national income, a greater proportion than in the US.

 This is a serious issue and requires a serious discussion and serious action.  Inequality spurs more inequality – greed leads to more greed.  Wallin and Duffy earned healthy incomes as respected journalists and, no doubt, each receives a healthy pension from those jobs.  In addition, Wallin reportedly earned hundreds of thousands (Editors note: It was actually more than $1 million) as a board director while she was a senator.  And, they each make over a hundred thousand dollars as senators.  Did they really need to cheat on their expense claims as well?  

 But then isn’t this what greed does to us? 

Ray Rivers writes weekly on both federal and provincial politics, applying his more than 25 years as a federal bureaucrat after which he decided to write and has become a  political animator. Rivers was a candidate for provincial office in Burlington where he ran against Cam Jackson in 1995, the year Mike Harris and the Common Sense Revolution swept the province.


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6 comments to A Canadian study in greed. Tthey make over $100,000 as senators. Did they really need to cheat on expense claims as well?

  • Navigator

    Chris, the definition of fair you have provided sounds quite saintly, an ideal that should be approached, but unlikely to be achieved. Just for the record, I have no special interest in protecting the so-called 1%ers, I am far from being one of them. I am just addressing myself in a general fashion to the question of tax policy and its perceived impact on various segments of the community. If it really only amounts to a rounding error as you describe applied to Canada, then may I suggest that there would not be much gained in the way of significant additional taxation from this segment even if you greatly increased the rates. It might make you feel better, but it would have little impact on the economy. In fact, there have been some analysis published indicating exactly that. Secondly, if this sector is so unimportant, I am left wondering why the French government beat such a hasty retreat on its marginal rates. Perhaps France has a larger and more significant entrepeneurial class than Canada? In any event, I also don’t intend to carry this on. I think we have made our positions clear.

  • Chris Latour

    Let’s start with another quote from Merrian Webster;

    Fair – marked by impartiality and honesty : free from self-interest, prejudice, or favoritism

    Using your example of France I did some quick research (https://goo.gl/TF6Wc). The 75% is on those making more than 1.3M Euros annually. I have no hesitation judging that to be an excess. The next bracket down is 45% on ~200k+. If we applied rates similar to that in Canada and all those who make greater than 1.3M after all the loop holes and deductions decided to leave, the impact on the Canadian population would be little more than a rounding error to StatsCan. And as the current economic situation is causing most of these people to sit on their money, not invest it, I see little lose to our economy. And the fact that French millionaires leave France is because other countries have not had the common sense to levy high taxes on the ultra rich. Globalization may some day leave them no where to hide.

    I also have more confidence than you in our legislators (not me) to determine fair tax rates. As we know average incomes and have a set poverty rate it would simple for legislators to set extreme tax rates at somewhere between 10-15 times the poverty rate and get support of the majority of Canadians. You’re concerns are about the rules impacting the 1% referenced in this article.

    And our government is not unaccountable. Every 4 years we hold them to account and with upstanding civil servants like Kevin Page who work to pierce the veil of government secrecy we do eventually find out what’s going on. The responsibility then falls to the electorate to do something about it.

    It is clear to me that you and I would take our society in very different directions. Instead of debating this further I will leave you the opportunity to the last word and bid you good day. I’ll not respond further but will read if you do respond.

  • Navigator

    Response to Chris Latour.

    Nobody has any objection to a fair tax system. But we need to examine what we mean by the word “fair” and to whom. We currently have a graduated income tax system that requires high earners to pay more. Could they pay some more without serious impact? Possibly. In France the new socialist government jumped on the old “make the rich pay for the crisis” mantra and instituted what it believed was a fair tax system that saw the rate of taxation of the higher income people approach 75%. Immediately this was followed by a serious flight of intellectual capital from France. Within a few months, the government tried to notch this down to something in the 60% range because they suddenly discovered that maybe, after all, it wasn’t fair. What this tells us is that fairness is very much is in the eye of the beholder. We live in a globalized economy where capital, intellectual capital, employment flows relatively freely across domains. We are not swimming in a fish bowl protected by thick glass walls. That means the we are not free to simply arbitrarily set our tax codes to suit our whims. We have to consider the impact it might have on segments of our economy that has other options available to it and members of society who can get up and leave the country. What good does it do for our poor if the people who create the wealth that provides the tax revenue decamp for more promising havens?

    On the subject of greed, it is also a slippery term. Who decides what is excessive? It is so subjective it is important to be clear on when the greed line has been crossed. Do we empower a government entity with appointed, unaccountable apparatchiks to declare by fiat when something is greedy? We did this with free speech, why not with money? Or do you, Chris, get to make that decision? What benchmarks and standards do we use? The author of the column point out that Pamela Wallin, in addition to her Senate salary, also received a large income from being a member of a board of directors of some private sector enterprise. There was no suggestion this was a conflict of interest, just that she was greedy. Some people thought Justin Trudeau was greedy by accepting payments for speeches when he is a member of Parliament. My personal view is that both of them are entitled to pick up extra income if other people are willing to offer it to them provided it does not constitute a conflict of interest.

    Finally, on the subject of who is the most honourable of the least honourable Senators, I would point out that the Conservatives required all their misceant members to resign. Where is the running for cover in that? We learn from Pamela Wallin today that she was given exactly one hour to make the nnouncement or be publicly booted from the caucus. There was never a suggestion of “all would be forgiven” once resitution was made. We also know that Wallin has been making resitution payments and not waiting for some “report” to tell her she was wrong. She apparently is able to distinguish right from wrong on her own and without the help of a committee. And it should be noted that the dispute is more than just housing allowances. Duffy has been accused of fraudulently claiming expenses for travel.

  • Chris Latour

    It is true that both the Liberals and Conservatives are facing the fact that some of their senators may have claimed housing expenses for which they were not eligible. To my knowledge, this fact has not been proven even for Duffy or Wallin. There is however a marked difference in how the parties are dealing with these revelations that are in my judgement an important gauge on the party morals.

    While the Conservatives have done little beyond “duck and cover” or write questionable cheques while their party leader remains silent or oblivious, Mac Harb has asked for the results of the audit and Trudeau has said that he would be welcome back in the party “once his spending woes are resolved”. It’s not the free pass those on the right like to pretend it is. Trudeau is calling for far more openness than is our Prime Minister.

    I’ll also provide a definition of “greed” for those who have yet to discover Google; “a selfish and excessive desire for more of something (as money) than is needed” – Merriam Webster

    To believe that the accumulation of wealth as the driving goal in life, whether the popular goal or not, as the right way to spend one’s life is, I would judge, a mark of one’s character. To try and keep accumulating wealth or privilege once you’ve reached a comfortable level regardless of the situation of your fellow citizens is crass and selfish. Equally disturbing is the belief that “less poor people than the US” is a good thing. Anyone suffering in poverty should be a concern for our society as a whole. Those in poverty cost more in our health system and are less able to contribute to the economy. Consider that according to StatsCan, in 2001 seven million working Canadians earned less than $20k per year.

    Taxes are not the evil some make them out to be. It’s a matter of creating a fair system and not being influenced by those too selfish to look for the common good.

  • Navigator

    So it all comes down to greed?

    I think when you look at the actions of the two Conservative Senators and the Liberal one who apparently owes an amount equal to the combined total of the two Conservative members, but who will be welcomed back into the Liberal caucus by Mr. Trudeau after his little financial “misunderstanding has been cleared up, you will see that criminality in the form of fraud (legal technicality — conversion) is involved. Not mere greed, whatever that word means.

    I know very few people who are not motivated to try to assemble throughout their life a fund of wealth to carry them through to their death and to look after their family members. I would much rather live in a society that supports that goal than one that puts out a message that that is merely greed and the state should be looking after people and putting an end to opportunities for greed (through rapacious taxation mainly). The term greed strikes me as rather a weasel word that is employed by self-righteous people who do not like the idea that other people work to get ahead financially and actually succeed at doing that.

    Incidentally, the middle class has always born the lion’s share of the tax burden because it has traditionally been the largest segment of society. Our current problem is that the middle class is shrinking, not because of silly notions regarding so-called class warfare or unequal tax burdens, but because the economy has been hollowed out by the loss of many idustries and the jobs that go with them and the inability to replace those losses with equally high wage economic activity.

    Finally, I get tired of a couple of things that I see are repeated as if they are mantras. First is conflating Canada with the United States. We are not a mirror image of that country when it comes to inequality of incomes and wealth ownership. Let us not continually confound American issues with Canada’s issues. The second is mixing income with wealth in essays that are intended to cast contempt or hatred towards the wealthy, they are not the same thing.