Canadian corporations dodged up to $11B in taxes in a year, CRA report finds

Tax agency looked at data from 2014 tax year to assess role of corporations in tax leakage

Source

 CBC News

Pete Evans

Jun 18, 2019 

The Canada Revenue Agency found tax leakage with companies big and small in the report released Tuesday.(Chris Wattie/Reuters)

Canadian companies avoided paying up to $11.4 billion worth of taxes they should have paid in the single tax year of 2014, according to the federal tax agency.

The Canada Revenue Agency released its fifth and final report on the tax gap, this one focusing on corporate taxes. Previous reports examined factors such as sales tax fraud, domestic tax evasion, and the use of offshore tax havens to look at how much leakage Canada’s taxation system has.

Tuesday’s report estimates that in the 2014 tax year, Canadian corporations managed to pay somewhere between $9.4 billion and $11.4 billion less than they should have in taxes.

Broadly speaking, bigger companies seem to be responsible for a bigger chunk of corporate tax leakage. The CRA report says small companies avoided paying between $2.7 billion and $3.5 billion in taxes. By the CRA’s definition, there were just over two million small companies in Canada that filed taxes that year.

Big companies, meanwhile, avoided paying between $6.7 billion and $7.9 billion. According to the CRA, there were about 14,000 big companies that filed some sort of income taxes in 2014.

A CRA analysis has found Canadian corporations managed to dodge paying roughly $10 billion in taxes in a single year. (Fabrizio Costantini/Bloomberg)

The tax agency is cracking down on that sort of behaviour, and says it thinks it will be able to recoup between 55 and 65 per cent of the corporate taxes it feels it is owed for 2014. That brings Canada’s corporate tax gap bill down to $3.3 billion and $5.3 billion in 2014.

The CRA says Canadian corporations earned $298 billion in taxable income that year, and paid about $40.9 billion in federal taxes. That means if their estimates about tax leakage are correct, the taxman missed out on about a quarter of the corporate tax revenue that could have been recouped.

• Loblaws squares off with CRA in $400M tax fight

“Our government is committed to cracking down on tax evasion and aggressive tax avoidance, in Canada and offshore,” said Diane Lebouthillier, Canada’s minister of national revenue.

Along with previous reports, Tuesday’s corporate tax data “will help the CRA evaluate its approaches and better target compliance actions to ensure a tax system that is fair and equitable for all Canadians,” she said.

• Wealthy Canadians hiding up to $240B abroad, CRA says

While the government is eager to recoup that money, even the tax authority admits not all of that $11-billion unpaid tax bill happened because companies were knowingly trying to defraud the system. Often, honest mistakes are to blame, including ignorance of tax law changes, accidentally overclaiming of deductions and credits, and even an inability to file taxes properly when businesses fail or go bankrupt during the year.

“Like other taxpayers, corporations may be non-compliant with their tax obligations due to both intentional and unintentional actions ranging from honest mistakes to aggressive tax avoidance,” the CRA said.

Sonia Dhaliwal, an accounting professor at the University of Guelph in Ontario, said the $11-billion figure was higher than she thought it would have been, but in and of itself, it isn’t enough to make her think Canada has a rampant problem with corporate tax evasion.

• EXCLUSIVE

  BMO didn’t inflate losses or dodge tax in $1.7B loan arrangement, judge rules

Dhaliwal has previously worked with countless companies on tax issues and said that on the whole, companies big and small “try their best to be compliant.”

While corporate tax rates are comparatively lower in Canada than they are elsewhere, she said, the country actually has among the more complex tax systems in the world.

“Complexity could perhaps lead to non compliance because they’re not familiar with the rules.”

• THE FIFTH ESTATE

  CRA signs secret settlement with wealthy KPMG clients involved in offshore tax scheme

Paul Craig Roberts: “That America” is Gone

Source

http://www.zerohedge.com

Authored by Paul Craig Roberts,

June 6, 2019

 

The story line is going out that the economic boom is weakening and the Federal Reserve has to get the printing press running again.  The Fed uses the money to purchase bonds, which drives up the prices of bonds and lowers the interest rate.  The theory is that the lower interest rate encourages consumer spending and business investment and that this increase in consumer and business spending results in more output and employment.

The Federal Reserve, European Central Bank, and Bank of England have been wedded to this policy for a decade, and the Japanese for longer, without stimulating business investment.  Rather than borrowing at low interest rates in order to invest more, corporations borrowed in order to buy back their stock.  In other words, some corporations after using all their profits to buy back their own stock went into debt in order to further reduce their market capitalization!

Far from stimulating business investment, the liquidity supplied by the Federal Reserve drove up stock and bond prices and spilled over into real estate.  The fact that corporations used their profits to buy back their shares rather than to invest in new capacity means that the corporations  did not experience a booming economy with good investment opportunities. It is a poor economy when the best investment for a company is to repurchase its own shares.

Consumers, devoid of real income growth, maintained their living standards by going deeper into debt.  This process was aided, for example, by stretching out car payments from three years to six and seven years, with the result that loan balances exceed the value of the vehicles.  Many households live on credit cards by paying the minimum amount, with the result that their indebtedness grows by the month. The Federal Reserve’s low interest rates are not reciprocated by the high credit card interest rate on outstanding balances.

Some European countries now have negative interest rates, which means that the bank does not pay you interest on your deposit, but charges you a fee for holding your money.  In other words, you are charged an interest rate for having money in a bank.  One reason for this is the belief of neoliberal economists that consumers would prefer to spend their money than to watch it gradually wither away and that the spending will drive the economy to higher growth.

What is the growth rate of the economy?  It is difficult to know, because the measures of inflation have been tampered with in order to avoid cost-of-living adjustments for Social Security recipients and the payment of COLA adjustments in contracts. The consumer price index is a basket of goods that represents an average household’s expenditures.  The weights of the items in the index are estimates of the percentage of the household budget that is spent on those items.  A rise in the prices of items in the index would raise the index by the weight of those items, and this was the measure of inflation.

Changes were made that reduced the inflation that the index measured.  One change was to substitute a lower price alternative when an item in the index rose in price.  Another was to designate a rise in price of an item as a quality improvement and not count it as inflation.

Something similar was done to the producer price index which is used to deflate nominal GDP in order to measure real economic growth.  GDP is measured in terms of money, and some of the growth in the measure is due to price increases rather than to more output of goods and services.  In order to have a good estimate of how much real output has increased, it is necessary to deflate the nominal measure of GDP by taking out the price rises.  If inflation is underestimated, then real GDP will be overestimated. When John Williams of Shadowstats adjusts the real GDP measure for what he calculates is a two-percentage point understatement of annual inflation, there has been very little economic growth since 2009 when a recovery allegedly began, and the economy remains far below its pre-recession level in 2008.

In other words, the belief that the US has had a decade long economic recovery is likely to be an illusion produced by underestimating  inflation.  Indeed, every day experience with the prices of food, clothing, household goods, and services indicates a higher rate of inflation than is officially reported.

The low unemployment rate that is reported is also an illusion.  The government achieves the low rate by not counting the unemployed.  The economic and psychological cost of searching for a job are high.  There are the economic costs of a presentable appearance and transport to the interview. For a person without a pay check, these costs rapidly mount.  The psychological costs of failure to find a job time after time also mount.  People become discouraged and cease looking.  The government treats discouraged workers who cannot find jobs as no longer being in the work force and omits them from the measure of unemployment.  John Williams estimates that the real rate of US unemployment is 20%, not 3.5%

The decline in the labor force participation rate supports Williams’ conclusion.  Normally, a booming economy, which is what 3.5% unemployment represents, would have a rising labor force participation rate as people enter the work force to take advantage of the employment opportunities.  However, during the alleged ten year boom, the participation rate has fallen, an indication of poor job opportunities.

The government measures jobs in two ways: the payroll jobs report that seeks to measure the new jobs created each month (which is not a measure of employment as a person may hold two or more jobs)  and the household survey that seeks to measure employment. The results are usually at odds and cannot be reconciled. What does seem to emerge is that the new jobs reported are for the most part low productivity, low value-added, lowly paid jobs. Another conclusion is that the number of full time jobs with benefits are declining and the number of part-time jobs are rising.

A case could be made that US living standards have declined since the 1950s when one income was sufficient to support a family.  The husband took the slings and arrows of the work experience, and the wife provided household services such as home cooked nutritious meals, child care, clean clothes, and an orderly existence.  Today most households require two earners to make ends meet and then only barely.  Saving is a declining option.  A Federal Reserve report a couple of years ago concluded that about half of American households could not produce $400 cash unless personal possessions were sold.

As the Federal Reserve’s low interest rate policy has not served ordinary Americans or spurred investment in new plant and equipment, who has it served? The answer is corporate executives and shareholders.  As the liquidity supplied by the Federal Reserve has gone mainly into the prices of financial assets, it is the owners of these assets who have benefited from the Federal Reserve’s policy.  Years ago Congress in its unwisdom capped the amount of executive pay that could be deducted as a business expense at one million dollars unless performance related.  What “performance related” means is a rise in profits and share price.  Corporate boards and executives achieved “performance” by reducing labor costs by moving jobs offshore and by using profits and borrowing in order to buy back the company’s shares, thus driving up the price.

In other words, corporate leaders and owners benefited by harming the US economy, the careers and livelihoods of the American work force, and their own companies.

This is the reason for the extraordinary worsening of the income and wealth distribution in the United States that is polarizing the US into a handful of mega-rich and a multitude of have-nots.

The America I grew up in was an opportunity society.  There were ladders of upward mobility that could be climbed on merit alone without requiring family status or social and political connections.  Instate college tuition was low.  Most families could manage it, and the students of those families that could not afford the cost worked their way through university with part time jobs. Student loans were unknown.

That America is gone.

The few economists capable of thought wonder about the high price/earnings ratios of US stocks and the 26,000 Dow Jones when stock buy-backs indicate that US corporations see no investment opportunities.  How can stock prices be so high when corporations see no growth in US consumer income that would justify investment in the US? 

When President Reagan’s supply-side economic policy got the Dow Jones up to 1,000 the US still had a real economy. How can it be that today with America’s economy hollowed out the Dow Jones is 25 or 26 times higher?  Manipulation plays a role in the answer. In Reagan’s last year in office, the George H.W. Bush forces created the Working Group on Financial Markets, otherwise known as the “plunge protection team,” the purpose of which was to prevent a stock market fall that would deny Bush the Republican nomination and the presidency as Reagan’s successor.  The Bush people did not want any replay of October 1987.

The plunge protection team brought together the Federal Reserve, Treasury, and Securities and Exchange Commission in a format that could intervene in the stock market to prevent a fall. The easiest way to do this is, when faced with falling stock prices, to step in and purchase S&P futures. Hedge funds follow the leader and the market decline is arrested.

The Federal Reserve now has the ability to intervene in any financial market.  Dave Kranzler and I have shown repeatedly how the Federal Reserve or its proxies intervene in the gold market to support the value of the excessively-supplied US dollar by printing naked gold contracts to drop on the gold futures market in order to knock down the price of gold. A rising gold price would show that the dollar support arrangements that the Federal Reserve has with other central banks to maintain the illusion of a strong dollar is a contrived arrangement rejected by the gold market.

What few, if any, economists and financial market commentators understand is that today all markets are rigged by the plunge protection team.  For at least a decade it has not been possible to evaluate the financial situation by relying on traditional thinking and methods.  Rigged markets do not respond in the way that competitive markets respond.  This is the explanation why companies that see no investment opportunities for their profits better than the repurchase of their own shares can have high price/earnings ratios.  This is the explanation why the market’s effort to bring stock prices in line with realistic price/earnings ratios is unsuccessful.

As far as I can surmise, the Federal Reserve and plunge protection team can continue to rig the financial markets for the mega-rich until the US dollar loses its role as world reserve currency.

*  *  *

We live in a Matrix of Lies in which our awareness is controlled by the explanations we are given.  The control exercised over our awareness is universal.  It applies to every aspect of our existence.  In the article above I showed that not only is our understanding of the economy controlled by manipulation of our minds, but also the markets themselves are controlled by official intervention. In brief, you can believe nothing that you are officially told.  If you desire truth, you must support the websites that are committed to truth.

Bayer Discovers “Black Ops” Division Run by Monsanto, Initiates Internal Investigation as Law Enforcement Prepares Criminal Charges Against the Chemical Giant

Source

http://www.naturalnews.com

By Mike Adams

May 18, 2019

 

For over a decade, Monsanto has been engaged in building and maintaining “hit lists” of journalists, lawmakers and regulators to be taken out if they opposed the evil agenda of GMOs and toxic glyphosate weed killer chemicals that now inundate the world food supply. Any influential person who opposed the Monsanto agenda was subjected to one or more of the following:

• Attempted bribery
• Death threats and intimidation
• Character assassination through well-funded “negative P.R.” campaigns
• Defamation via coordinated Wikipedia attacks, run by Monsanto operatives
• Career destruction, such as getting scientists blacklisted from science journals
• Being doxxed, having their home addresses publicized and their families and co-workers threatened

In other words, Monsanto has been running a “black ops” division for over ten years, spending perhaps $100 million or more on efforts to silence, destroy or assassinate anyone who interfered with the agricultural giant’s market dominance.

Now, the criminal mafia activity that Monsanto has carried out for years is finally being exposed as law enforcement closes in on the crimes of this evil agricultural giant now owned by Bayer, a corporation that appears to be making an effort to “clean house” and end the Monsanto crimes that targeted journalists, lawmakers and regulators with intimidation and bribery campaigns.

Law enforcement preparing criminal charges against Monsanto division operatives

“French prosecutors said on Friday they had opened an inquiry after newspaper Le Monde filed a complaint alleging that Monsanto – acquired by Bayer for $63 billion last year – had kept a file of 200 names, including journalists and lawmakers in hopes of influencing positions on pesticides,” reports Reuters.

This “hit list” of journalists and lawmakers was directly translated into action to intimidate, threaten or bribe these individuals, just as happens in the United States. In fact, a Monsanto spokesperson now confirms the Monsanto mafia used the list to take out anyone standing in the way of the Monsanto agenda. “There have been a number of cases where – as they would say in football – not the ball was played but the man, or woman, was tackled,” admitted Matthias Berninger to Reuters. Berninger is the “head of public affairs and sustainability” of Monsanto.

Further into the statement, Berninger admits Monsanto collected “non-publicly available data about individuals” and then issued an apology from Bayer for the activity. “Following an initial review, we understand that this initiative has raised concerns and criticism,” said Bayer in a May 12th public statement. “This is not the way Bayer seeks dialogue with society and stakeholders. We apologize for this behavior.”

What Natural News can reveal is that Monsanto hired black ops teams and private investigators to dig up the personal locations of individuals and their families, then engaged in activities to threaten and intimidate those individuals while publicly smearing them online through coordinated, well-funded character assassination campaigns.

This author believes that, over the last decade, I have been personally hunted by Monsanto-funded black ops teams who intended to destroy my credibility and physically harm my person in order to silence my public criticism of Monsanto and end the publishing of MonsantoMafia.com, GMO.news, Glyphosate.news and the dozens of other websites that Monsanto did not want to see published.

See my full video here, which explains more:B

Health Ranger: I am willing to share details with Bayer’s investigation team in exchange for a public apology and a retraction of the smears

I am willing to consider the possibility that Bayer is genuine in its attempts to clean up the “Monsanto mafia” mess that it has inherited. It is possible that the culture of Bayer is not nearly as evil and corrupt as the culture of Monsanto, which is why I am willing to sit down with Bayer’s internal investigators and privately detail the illegal tactics that have been used against myself and others who spoke out against the multiple criminal activities carried out by Monsanto’s “black ops” teams.

I will do this in exchange for a public apology from Bayer that specifically names myself, the Food Babe, Jeffrey Smith and other individuals in the independent media (there are about twenty) who have been specifically targeted, smeared and threatened by Monsanto operatives over the years. Bayer may contact my legal team for more details of what we are requesting.

This is a rare opportunity for Bayer to hear directly from the victims of the Monsanto “black ops” division that Bayer likely was not aware it was acquiring when it purchased Monsanto, since the entire division operated in secret and relied on internal corporate money laundering to obfuscate its operations.

Bayer’s attorneys may reach out to Natural News through our public contact page. Our attorneys are also initiating contact with Bayer’s legal team to initiate discussions.

Bayer says it will support criminal indictments of Monsanto operatives

If you read the Bayer announcement that went public on May 12, you’ll find that Bayer is openly supporting the criminal indictment of Monsanto operatives who ran its black ops division. “Bayer will fully support the public prosecutor’s office in France in its investigation,” says the statement.

That same statement also explains:

As an immediate measure, we have decided to suspend our cooperation with the involved external service providers for the time being. The responsible Monsanto manager left the company shortly after the acquisition.

The “external service providers” were, Natural News has learned:

• Negative P.R. firms hired to engage in online character assassination.
• Rogue private investigators tasked with geo-locating targeted individuals.
• “Wet work” intimidation / assassination teams that were directed to threaten violence and / or carry out direct violence against “enemies” of Monsanto, including the targeting of innocent family members.

Bayer goes on to explain, “We are also currently investigating further appropriate consequences both internally and with regard to external parties. Bayer stands for openness and fair dealings with all interest groups. We do not tolerate unethical behavior in our company.”

If true, this would stand in great contrast to Monsanto itself, which was run like a criminal mafia organization, complete with “hit men” and terror campaigns that focused on critics of the biotech company.

Perhaps Bayer is hoping to clean up the Monsanto nightmare and initiate a new era of operations where public debate replaces the intimidation, threats and murder campaigns run by former Monsanto operatives. As someone who has been routinely targeted, threatened and smeared by Monsanto, I am willing to entertain the possibility that Bayer is looking to right past wrongs. Even though I may never agree with the widespread use of herbicides and pharmaceuticals across society, I don’t go out of my way to criticize corporations unless they are engaged in acts of extreme evil.

McDonald’s for example, sells all sorts of garbage food products that are unhealthy for society, but McDonald’s doesn’t hire hit teams to hunt down and try to assassinate critics, for example. McDonald’s just runs ads and tries to get the public to focus on social happiness instead of the chemical pesticides found in their products. And for the most part, it works. Nobody goes to McDonald’s expecting an all-organic diet in the first place. McDonald’s is a “voluntary compromise” where a consumer is obtaining convenience and low cost in exchange for surrendering a bit of their own long-term health. But no one from McDonald’s puts a gun to their head and demands, “EAT HERE OR DIE MUTHA F##KA,” which is essentially the way Monsanto was run for over a decade.

Investigating “the project Monsanto commissioned”

Finally, I want to draw your attention to one more line in the Bayer press release. It refers to “the project Monsanto commissioned” and promises to “evaluate the allegations.”

I can report to you that this “project” is the black ops unit of Monsanto. It was commissioned by angry, evil Monsanto managers whose personal hatred and violence is only exceeded by the violence of the Monsanto corporation itself, which unleashed Agent Orange on the world, along with a long list of other deadly chemicals that were used against innocent civilians as weapons of war.

Monsanto was run by some of the most evil, criminal-minded people in the history of the world. These people, I believe, are directly responsible for acts of extreme violence — both online and offline — that specifically targeted Monsanto critics like myself. They belong behind bars, and it looks like Bayer may actually be willing to help put them there.

It’s time for Bayer to close the chapter on this Monsanto era of disinformation, destruction and death. Otherwise, the anger against Monsanto that is well deserved and widely publicized across the activist community will continue to reflect on Bayer and its share price. Monsanto has committed acts of tremendous evil against innocent, well-meaning individuals who only advocated a cleaner food supply and honest labeling. If Bayer does not open a dialogue with these activists and help resolve some of these issues, Bayer will continue to pay the price for crimes that it inherited through its acquisition of Monsanto, which has already proved disastrous from a financial point of view.

I believe the only way Bayer can resolve this is to talk to those of us who suffered through these malicious attacks and still somehow made it out alive. Bayer needs to publicly apologize, set the record straight, admit the crimes of the Monsanto black ops managers, and retract all the smear articles and Wikipedia entries it funded.

It’s time for Bayer to come clean.

 

Judge restores Obama-era drilling ban in Arctic and Atlantic

‘The president cannot just trample on the Constitution to do the bidding of his cronies,’ says lawyer

Source link

CBC.ca

The Associated Press

Mar 30, 2019

In this Feb. 15, 2018 file photo, Judith Enck, centre, former regional administrator for the Environmental Protection Agency addresses those gathered at a protest against President Trump’s plan to expand offshore drilling for oil and gas. A U.S. judge in Alaska says Trump exceeded his authority when he reversed a ban on offshore drilling in vast parts of the Arctic Ocean and dozens of canyons in the Atlantic Ocean. (David Klepper/The Associated Press)

 

President Donald Trump exceeded his authority when he reversed bans on offshore drilling in vast parts of the Arctic Ocean and dozens of canyons in the Atlantic Ocean, a U.S. judge said in a ruling that restored the Obama-era restrictions.

Judge Sharon Gleason in a decision late Friday threw out Trump’s executive order that overturned the bans that comprised a key part of Obama’s environmental legacy.

Presidents have the power under a federal law to remove certain lands from development but cannot revoke those removals, Gleason said.

“The wording of President Obama’s 2015 and 2016 withdrawals indicates that he intended them to extend indefinitely, and therefore be revocable only by an act of Congress,” said Gleason, who was nominated to the bench by Obama.

A message left Saturday for the Department of Justice was not immediately returned.

The American Petroleum Institute, a defendant in the case, disagreed with the ruling.

• Trump signs order to expand drilling in Arctic, Atlantic oceans

• U.S. judge says groups can sue to keep Arctic, Atlantic drill ban

Continue:

Source link

Median CEO pay in US tops $1 million a month

Attacks on workers are paying off for the bosses at Ford, Boeing, Blue Cross Blue Shield and other giant corporations.

Source: Median CEO pay in US tops $1 million a month – World Socialist Web Site

http://www.wsws.org

By Patrick Martin
18 March 2019

The median income for 132 CEOs of major US corporations jumped to $12.4 million in 2018, more than $1 million a month, according to an analysis published Sunday by the Wall Street Journal. The CEOs, representing about one-quarter of the S&P 500 firms for which figures have thus far been released, saw pay rises of about 6.4 percent apiece compared to 2017.

The CEO gains were driven by rising stock prices for the year, despite a sharp drop in December 2018, the worst December for the financial markets since the Great Depression. Assuming the pay rises for the remaining CEOs in the S&P 500 match those of the first group, 2018 would mark the third consecutive year of record CEO pay in the United States.

Bob Iger, CEO of Disney

Among the biggest payouts were $66 million for Robert Iger, longtime CEO of Walt Disney Co., $44.7 million for Richard Handler, CEO of Jefferies Financial Group, and $42 million for Stephen MacMillan, CEO of medical equipment maker Hologic Inc. Patrick McHale of Minneapolis-based manufacturer Graco Corp. made $34.9 million in 2018.

Some CEOs outside the S&P 500 received even bigger windfalls, topped by the $125 million for Nikesh Arora, a former Google executive who became CEO of Palo Alto Networks, a cybersecurity company, only in June 2018.

Corporate criminals like the CEO of Boeing and the heads of the major banks suffered no consequences from the devastation that their actions have caused for their own workers and the population as a whole.

Boeing CEO Dennis Muilenburg received $23.4 million after a year that ended with the crash of a 737 Max jetliner operated by Lion Air of Indonesia, killing 189 people. Two weeks ago, a second crash of a 737 Max, this time in Ethiopia, killed 157 people and led to the worldwide grounding of all the 737 Max 8 and Max 9 jets made by the company. Boeing stock plunged 10 percent, wiping out $25 billion in stock market value.

Jamie Dimon, CEO of JPMorgan Chase

Among bankers, Jamie Dimon of Citibank topped the list with $31 million, while Brian Moynihan of Bank of America received $23 million. Along with Goldman Sachs, these banks played central roles in precipitating the 2008 Wall Street crash.

Wells Fargo CEO Tim Sloan saw a pay rise to $16.4 million, including his first-ever bonus, despite the company’s stock plunging 24 percent due to the scandal involving the creation of millions of false accounts for customers, leading to fines and regulatory penalties.

Ford President and CEO Jim Hackett received a 10 percent raise in 2018, raking in $17.75 million, while the company continues to slash jobs both in the United States and internationally. According to press reports, the Ford CEO received 276 times the median pay for all Ford employees. General Motors has yet to report the 2018 compensation for CEO Mary Barra, who made $21.9 million in 2017.

Jim Hackett, CEO of Ford

A study reported last month in the magazine Institutional Investor found that median CEO pay at major US corporations has soared over the past four decades—from $1.8 million in the 1980s to $4.1 million in the 1990s, reaching $9.2 million in the early 2000s.

Following a drop after the 2008 Wall Street crash, when CEO compensation was driven down by falling share prices, the combined compensation from pay, stock options and bonuses for corporate bosses has returned to the level that prevailed before the financial crisis. In contrast, most workers have seen no significant recovery.

CEO pay has risen nearly 72 percent since the low point in 2009 and is now just 3.3 percent below the record levels set in 2007, on the eve of the financial collapse. According to the study reported in Institutional Investor, CEO pay grew 17.6 percent between 2016 and 2017 alone, while average pay for workers rose by only 0.3 percent.

The ratio of CEO pay to the pay of the average worker has risen from 20-1 in 1965 to 30-1 in 1978, 58-1 in 1989, 112-1 in 1995 and a record 344-1 in 2000. After the dip following the 2008 crash, the CEO-to-worker pay ratio rose back to 312-1 in 2017.

One corporate CEO’s record pay package deserves particular attention: Daniel Loepp, CEO of Blue Cross Blue Shield of Michigan, the largest insurer in the state, covering the majority of autoworkers and other industrial workers, as well as auto retirees. Loepp has seen his annual compensation rocket from $1 million in 2006, when he became CEO, to $9 million in 2015, $13.4 million in 2017 and $19.2 million in 2018, including a staggering bonus of $16.2 million.

Daniel Loepp, CEO of Blue Cross Blue Shield of Michigan

Loepp’s bonus was “only” $10.4 million in 2017, and the $5.8 million raise in his bonus was due to meeting “performance targets” set by the corporate board. These targets included slashing corporate expenses by $360 million over the past three years, through cuts in jobs and employee compensation. Loepp also pushed through a cut in the health care coverage for Blue Cross retirees, who had expected, having worked for a health care company, that their benefits would be secure.

Loepp is by far the best-paid chief executive officer of a company that is still nominally not-for-profit—but posted an “operating margin” last year of $605 million—and which, because of its longstanding relationship with the auto industry, the UAW and the AFL-CIO, has eight union executives on its board of directors.

These union officials approved the bonus and other compensation for Loepp and set the “targets” that Loepp had to meet, which were achieved by cutting the jobs and benefits of Blue Cross Blue Shield workers, many of them members of the UAW, as well as benefits for workers insured by the company, which is the principal health insurer for unionized workers across the state.

The Detroit Free Press contacted the eight union officials, including those from the UAW, Michigan Education Association, Michigan Building Trades Council, and Michigan AFL-CIO, to question them about the basis for Loepp’s whopping bonus and raise. Seven did not respond, while the Teamsters Union representative on the board of directors defended the $19.2 million payout.

William Black, executive director of Michigan Teamsters Joint Council 43, said in an email to the newspaper: “We at the board are sensitive to compensation issues, and we have emphasized that pay be tied to performance… His compensation is heavily weighted against company performance, as it should be. That performance has been very strong in recent years.”

This statement underscores the scurrilous and thoroughly corrupt role of the unions in supporting the profit system and the gouging of union members to enrich the capitalists and the corporate bosses. The union executives have far more in common with Loepp than with the workers they claim to represent. In institutions like the UAW Retiree Medical Benefits Trust, the union officials preside over multibillion-dollar corporate entities with salaries and bonuses that are modeled on those of the Loepps, Hacketts and Jamie Dimons.

Trudeau’s Cabinet Tempest

On a global scale, the current events within Canada’s Justin Trudeau cabinet are not much more than the proverbial tempest in a teapot.

“For true justice, corporate citizenship should be annulled and the managers and shareholders be held responsible for criminal actions and other damages created by the company…”

Source: Trudeau’s Cabinet Tempest – Global ResearchGlobal Research – Centre for Research on Globalization

http://www.globalresearch.ca

On a global scale, the current events within Canada’s Justin Trudeau cabinet are not much more than the proverbial tempest in a teapot. While receiving saturation coverage on Canada’s CBC and some national newspapers, it is not totally noteworthy with global significance, other than some slipping and tarnishing of Trudeau’s halo with foreign media.

Having said that the problem’s within the Trudeau government do demonstrate a few political truths common to many governments and government parties. Concurrently it also reveals some problems deep – but not too deep – within Canada’s governance. Superficially it is a squabble internally within the Trudeau cabinet but it has threads and connections that incorporate much of what is wrong with Canadian governance.

It started innocently enough, at least on the surface, with the resignation of a cabinet minister for straightforward reasons. Positions were reassigned and shortly thereafter another resignation occurred, setting the current problems into motion – which is another way of saying the problems surfaced into the public sphere, old problems and new problems.

Canada’s Minister of Justice and the Attorney General Jody Wilson-Raybould was reassigned to a new position as Minister of Veterans’ Affairs, an assignment many considered was a demotion. MS Wilson-Raybould appeared to accept the change with equanimity. However, shortly thereafter, she resigned from that position, keeping her position guarded behind the inability to speak as per the legalities of client confidentiality and cabinet confidentiality.

It quickly became understood that the problem concerned her decision to allow the prosecution of a Canadian multinational corporation, SNC Lavalin, to proceed. Trudeau attempted to appease the situation but considering the strong character of Ms Wilson-Raybould and his own shifting explanations the media ran with the story, creating a significant impact across the country.

I watched Ms Wilson-Raybould’s presentation to the House of Commons Justice Committee, followed by presentations from Gerald Butts, Trudeau’s best friend and right hand man in the Prime Minister’s Office (PMO) and from Michael Wernick, Clerk of the Privy Council, one of the more powerful positions in the bureaucracy. Butts testimony seemed vague, more because he was not in attendance at many of the conversations discussed. Wernick was abrasive and abrupt, arrogant, and quite comfortable being so. He struck me as being someone who would be a partisan supporter of either the Liberals or the Conservatives, whoever was in power, as long as they followed the neoliberal agenda.

What I took away from all this so far are ramifications that spread throughout the Canadian political and business community, and indeed into the international community.

Jobs, jobs, jobs

The original problem stemmed from charges against SNC Lavalin for bribery of foreign officials that the Prosecutor’s Office were proceeding with. It quickly became mixed up with a hastily thought up and recently passed bill creating the possibility within the judicial system of a “deferred prosecution agreement” (DPA). Trudeau and the PMO argued publicly that a DPA would save many jobs, directly, and indirectly through service providers to SNC Lavalin. Ms Wilson-Raybould stood fast in Committee to her position that the prosecution should proceed.

There was no argument about the innocence of SNC Lavalin. The argument presented by the government concerned the usual political mantra used by all parties – “jobs, jobs, jobs.” Wernick argued that it was in the “public interest” while the overall testimony seemed to indicate it was purely political interest carrying the argument.

From my perspective it is not at all about jobs, and many good arguments were made in Committee indicating that employment and the economy were not the issue, at least not in the usual usage of the language. What struck me was that the PDA is another means by which corporations, their managers, and their shareholders, can escape responsibility for actions undertaken by the legality known as the “corporation.”

It is what corporations are designed for: to escape personal responsibility for errors, mistakes, illegal actions et al, and to maximize profits. The PDA, while excused as being something other countries have (which does not necessarily make it a good thing), is simply another layer to protect the managers and shareholders of SNC Lavalin from prosecution and responsibility for damages. With the PDA, a slap on the wrist, some form of promises and conditionalities to meet and then business will proceed as usual.

For true justice, corporate citizenship should be annulled and the managers and shareholders be held responsible for criminal actions and other damages created by the company. Certainly that creates problems on the shareholder side as many citizens are shareholders simply through the practice of pension and other investment pools being involved with the markets. I won’t sort that out here. SNC Lavalin’s directors, whichever one offered the bribe, should be held criminally responsible.

Neocolonialism and Canada’s Indian Act

Ms Wilson-Raybould has an undergraduate degree in political science and history, and a graduate law degree. She has served as B.C. Crown Prosecutor, a Treaty Commissioner, and a Regional Chief for the B.C. Assembly of First Nations. She speaks with the authority of a person well versed in European based law and well versed in First Nations traditions and governance. That introduces another broad thread to the story.

As a First Nation leader, Ms. Wilson-Raybould has consistently spoken against Canada’s Indian Act (1876), still in force with amendments. When the cabinet shuffle occurred, Trudeau offered her the position of Minister of Indigenous Affairs, a position she declined for obvious reasons of not wanting to be the ‘enforcer’ of an act she abhorred. In short, the Indian Act is one of the larger means to continue with Canada’s unstated political acts of maintaining the First Nations as subjugated people, a unilaterally imposed set of rules theoretically dealing with the various treaties made as European ‘civilization’ spread across the continent. Ms Wilson-Raybould does come from British Columbia, a province where the vast majority of the land has never been ceded by treaty.

Underneath Trudeau’s attempts at reconciliation for all the colonial depredations imposed on the indigenous people of Canada – land theft, imposition of reservations, many legal limitations, ethnic cleansing and cultural genocide – Canada remains a racist state. It is not overt and obvious to many, but it rests beneath the surface of Canadian civility. The Indian Act needs to be repealed and the federal government needs to negotiate with the First Nations in order to honour the treaties across Canada, and not impose unilateral regulations. Reconciliation should proceed to reparations – financial and territorial.

Resolution

How this affair resolves itself is an unknown. Beside the legal affairs of SNC Lavalin and the reconciliatory pretenses of the Trudeau government, there is also the factor of Trudeau’s avowed feminism. After MS Wilson-Raybould’s departure, another high level and highly respected cabinet minister, Jane Philpott, resigned over the handling of the SNC Lavalin affair.

So far, both women are staying in caucus and are indicating they will run again in the approaching general election, October 21, 2019. Polls indicate Trudeau’s ratings have dropped considerably, while the Liberal party itself has already rebounded somewhat from an initial drop. With a weak opposition – a divided Conservative camp, and a wandering NDP, there may yet be time to straighten the halo, albeit with some tarnish.

*

Jim Miles is a frequent contributor to Global Research.

The original source of this article is Global Research

Copyright © Jim Miles, Global Research, 2019

The reality of capitalism: GM makes $11.8 billion in profits while closing plants, eliminating 14,000 jobs

“Workers in the US, Canada, Korea and Brazil are thrown onto the streets, their communities are destroyed, and the profits they have produced are handed over to the financial aristocracy that lords over society.”

The huge profits, side-by-side with the destruction of entire communities, expose the real character of the capitalist system and why the working class must abolish it.

Source: The reality of capitalism: GM makes $11.8 billion in profits while closing plants, eliminating 14,000 jobs – World Socialist Web Site

http://www.wsws.org

Jerry White

7 February 2019

 

General Motors made $11.8 billion in profits in 2018, according to a company statement released yesterday. This included $10.8 billion in North American earnings last year and a 9.5 percent profit margin in the final quarter. These giant profits were announced as GM accelerates it plans to shut five factories in the US and Canada and destroy more than 14,000 jobs.

GM’s corporate board initiated the jobs massacre two days before the release of the profit report, which showed an eight percent decline over last year’s profits. The aim is to reassure Wall Street that GM will not bow to popular outrage over the plant closings and mass layoffs.

On Monday, the first of 4,000 engineers, technicians, managers and other white-collar workers, including 1,300 workers at the GM Tech Center in the Detroit suburb of Warren, were laid off and escorted out of their work locations. The half-century old Lordstown, Ohio assembly plant is scheduled to be closed next month. The Detroit-Hamtramck Assembly Plant is to be closed on June 1, and the Oshawa, Ontario plant shut down by the fourth quarter of 2019. The company also plans to close transmission plants in Baltimore and Warren by April 1 and August 1, respectively.

In 1979, during the first Chrysler bankruptcy, the corporations and the United Auto Workers (UAW) claimed that huge wage and benefit concessions were needed to “save” the auto industry. After three decades of endless givebacks, the UAW made the same claims as it collaborated with the Obama administration to slash wages during the 2009 restructuring of GM and Chrysler.

Now, even as the auto companies are flush with cash, the corporations are demanding even more sacrifices from workers and handing over billions to Wall Street.

Since 2015, GM squandered $10.6 billion on stock buybacks to boost the value of the company’s shares, more than double the $4.5 billion GM is expected to save next year from the job cuts.

Billions more have been spent on dividend payments to wealthy shareholders. This means even greater personal fortunes for top GM investors like Warren Buffett, the world’s third richest man (net worth $84.4 billion) whose Berkshire Hathaway owns 52.4 million GM shares, and Paul Schwarzman (net worth $12.4 billion) whose BlackRock investment firm controls 79 million GM shares.

In a conference call Wednesday, GM CEO Mary Barra told representatives from Goldman Sachs, Morgan Stanley, Citibank, Barclays, Deutsche Bank and other investment firms that company executives would “continue to deliver on our commitments that we made to you, our owners” to “create value in the short-term and long-term for our shareholders.”

Workers in the US, Canada, Korea and Brazil are thrown onto the streets, their communities are destroyed, and the profits they have produced are handed over to the financial aristocracy that lords over society.

Workers are being given an object lesson in the nature of capitalism. While the working class produces all of society’s wealth, the product of its labor is owned by the ruling class, which funnels vast sums into the hands of super-rich minority, while workers are condemned to poverty, servitude and social misery.

Predictably, no one on the investors’ call raised any objections to the devastation that would be wrought by the plant closings and mass layoffs. One analyst from Swiss-based UBS, however, did express concern about the “enormous push back” against the plant closings. He asked Barra, “How much of the $4.5 billion in savings is at risk if the unions don’t allow the closings or concessions?”

The GM CEO quickly assured him, saying, “I don’t see any risks,” making it clear the UAW had already signed off on closing what she said were underutilized plants. While the status of the plants would be finalized in negotiations with the UAW for a new labor agreement this summer, she said, “it’s a transition we have to go through” and “problem solve with the UAW.”

Far from fighting the plant closings, the UAW and the Unifor union in Canada have actively supported the decimation of autoworkers’ jobs and living standards. A substantial portion of the wages and benefits stolen from workers has found its way into the bank accounts and investment portfolios of the union executives themselves. When GM announced the plant closings in November, the value of GM shares controlled by the UAW increased by more than $200 million.

Facing the growing militancy of workers, the unions, discredited by decades of betrayals and bribery, are blaming the plant closings on Mexican workers for supposedly stealing the jobs of US and Canadian workers, echoing the nationalist rantings of the Trump administration.

This lie has been exploded by the courageous and ongoing struggle of Mexican workers in the “maquiladora” sweatshops in Matamoros. The workers have waged a three-week battle after rebelling against the unions, forming independent strike committees and calling popular assemblies to fight for improved wages and conditions.

Free from the stranglehold of the unions, these workers marched to the US border at Brownsville, Texas and appealed to their American brothers and sisters to join the fight against the global corporations. The struggle has now spread to grocery store workers, public employees and other sections of workers in Matamoros, with business publications warning about the spreading “contagion” of the class struggle.

The reemergence of the class struggle and political radicalization of the working class has struck fear in the hearts of the ruling class. Terrified that the growth of working-class struggle will acquire a conscious, anti-capitalist perspective, President Trump declared in his State of the Union Tuesday night: “We are alarmed by new calls to adopt socialism in our country.” His warning received the approval of the assembled representatives of the ruling class, Democrat and Republican, who hoped their clapping hands might stop the wave of working-class anger spreading throughout the country and internationally.

The answer to GM’s job massacre is the demonstration on Saturday, February 9, called by the Steering Committee of the Coalition of Rank-and-File Committees and the WSWS Autoworker Newsletter, to mobilize working class opposition to GM’s plant closings and mass layoffs. The march will oppose the supposed “right” of GM to shut down these plants.

The demonstration is not an appeal to GM and its corporate executives, beholden to Wall Street, but a call for workers to express their independent strength and determination to fight. It is also not an appeal to the UAW, the cheap-labor contractor and industrial police force, but is based on the call for auto workers and other workers to form independent rank-and-file committees to organize and unify their struggles.

The demonstration will demand a halt to all plant closures, the abolition of the two-tier wage and benefit system, the transformation of all temporary workers into full-timers, and the rehiring of all laid-off and victimized workers. In opposition to the shop floor dictatorship of corporate management, it will fight for industrial democracy, workers’ control of production and the transformation of GM, Ford and the other auto giants into public enterprises, democratically controlled and collectively owned by the working class.

This program is a critical part of the socialist transformation of world economy, to make social need and equality, not the accumulation of grotesque levels of personal wealth, the guiding principle of economic, political and social life.