KL Corner with Chris Malciw
This column needs no introduction. Here he is, Kirkland Lake Chris on Income Trusts.
"Oh since there's been a few political comments made here I thought I'd add something I found interesting in the Nations Capital of Ottawa. A 15 month RCMP prope into the Finance Department has revealed a possible breach of trust on the part of a senior public servant. That public servant has been suspended without pay and charged with criminal breach of trust.
These allegations stem from the previous Liberal governments policy towards income trusts. Word is the Liberals were about to announce a reduction or nullification of tax on income trusts or a reduced tax on dividened distributed from income trusts. The problem stems from the charged public servants use of that confidential information to incur personal gains from these securities. The investigation was, however, initially prompted by allegations of a possible leak in the department to market players and other stakeholders prior to the Minister of Finance at the times (Ralph Goodale) announcement in the house. This announcement was thwarted, however, as an election was called so the Liberals were never able to put any of these initiatives into practice.
The now Conservative government came under fire when in October 2006 they announced a tax on income trusts would be created. The Conservativees were criticized for this since they promised not to tax income trusts. There were a number of businesses in the process of converting into income trusts, such as BCE and Telus who have now since ended this process. Many investors were hurt, but the market appears to have settled on this issue.
These new events, however, have led to much criticism of the Liberals since the breach of trust occurred on their watch. With a possible election on the horizon it would appear that the Liberals have lost some steam over the Conservatives on this issue and will now have to try and explain a further scandal (in addition to the Sponsorship scandal which is said to have heavily contributed to their ousting after being in power for over 10 years).
Sorry for the long comment but I thought it was interesting. "
posted by The Vitamin's Blog @ 7:36 p.m.
12 Comments:
Gord, glad to see the blog is still lives. Thought I'd update with some Ameri-Aussie news from Illinois.
As you know, each year Australia appears in the US media exactly once each year (croc hunter dying doesn't count). This year it was Johnny H's comments about Obama that were greeted even by conservative pundits by, "who the hell does he think he is?" followed by "what/where is australia?".
Better luck next year.
It costs $8 to see the blackhawks in chicago if you're a student. yeah.
Gord; You are looking like a public school kid. For the love of God wash that damn hat. It's about to grow legs.
Today I attended a discussion with the Canadian Judge Advocate General (JAG) it was very informative. Australian Defence lawyers are always excited when they here about the Canadian Military Justice system as there are some real differences. The question is whether the Canadian military justice system is one we want to follow. Canadian law students that the JAG says he is keen to recruit full-time military lawyers as well as reserves.
The Canadian Armed Forces are approximately the same size as Australia’s. However, the legal core in Australian is more robust than that of the JAG’s. For example in Canada there are approximately 140 permanent full-time legal officers and about 71 reservists. In particular the JAG said they are fining it difficult to recruit reservists. The JAG also commented that there have some very eminent senior counsel who do a lot of work for the Armed Forces in Canada. The JAG also emphasised that they are experiencing real difficulty in recruiting legal officers from provincial areas. Comparatively speaking Australia has approximately 300 legal revisits and 100 permanent military legal officers. In addition to this, reserves in Australia pay no income tax on their reserve earnings while there Canadian counterparts receive 85% of the full-time wage equivalent. In my experience many lawyers undertake legal reserve work to supplement their incomes or to be involved in Boards of Inquiry in the case of senior counsel. Indeed some junior legal reserve counsel have earned up to $500,000 per annum tax free for working on boards of inquiry.
One of the more interesting points which the JAG raised was that in Canada they have formed a Commission of the Military Police which essentially polices the police. I find this intriguing as much of the criticism about the Australian military justice system has been focused on the military police. In fact, there has been serous criminal neglect of cases in the past as certain people think that the military have some kind of diplomatic protection. In Australia our Defence legislation is linked to our defence power in the constitution which is completely separate from the judicial system. In my opinion, it is better to refer criminal matters to the civil criminal system as:
a) there is no constitutional power to try people for crimes committed against civilians in a court marital,
b) the military police have limited forensic capabilities to investigate crimes and;
c) the matters which are dealt with in the Australian military justice system are best handled in the Federal Court jurisdiction and serious criminal matters deserve the attention of a Supreme Court Judge.
Professor Robyn Creke from the Australian National University (ANU) made the observation that civil courts tend to deal very conservatively with criminal matters involving military personnel.
Finally, another point of difference between the Australian and Canadian military justice systems is that the JAG is appointed by Cabinet. In Australia the JAG must be a Federal or Supreme Court Judge and is appointed by the Chief of Defence.
Very interesting point raised by Anon above concerning the Canadian JAG. I didn't know a whole lot about that area of our legal system here in Canada. One thing doesn't surprise me. Canadians pay a lot of tax and it hits everyoone. If I could supplement my income by $500K per annum tax free I'd be in the reserves right now and work at Mackers part time for the rest of the year hahaha...
In any event thanks for the information. Goood thing lawyers in Canada generally make a lot of money lol.
oops! I forgot to mention. A new poll was conducted yesterday and published this morning which indicates that if there was an election today the Conservatives would be re-elected. I think it was something like 34% to 28% Conservatives over the Liberals?
News polls mean nothing, The Howard government has gone into every election just under Labors ratting and has been in power for 12 years, whilst this is the first real challange we have had from Labor in a good while, we will win another
You're right about the polls. They're not always the best indicators. However, there has been a rather large shift from Liberals to Conservatives over the past few weeks due to a few factors. One the newly elected Liberal leader, Stephen Dion, was riding the wave of the honeymoon stage of his victory in December. That has since died out. It appears that since he can't formulate a coherent sentence in English (He's very French) and is not too well known through out the country and the party's policies under his leadership don't really impress people enough to see anything better than the current governments. Two, since the recent income trust scandal hit the tabloids people are reminded of the previous Liberal government and the Sponsorship Scandal, whether or not the Liberals had anything to do with the income trust issue is irrelevant. Simply by being in power at the time of it's alleged occurrance hurts their character and credibility. Three, the Conservatives have done a good job at portraying to Canadians, through advertising, their image of Dion. Since Dion's not well known it's more difficult for him to show otherwise. He's would have to be on the defensive and that could make him appear worse, even if he isn't.
So basically, although polls are not always the best indicators I think the surrounding context must be understood.
Here, I think they do provide a more accurate picture of Canada's political climate at this time for the above reasons as well as for others, such as environmental and tax policy initiatives.
The budget, if deafeated (would require all opposition parties to gang up on the Conservatives) may be the deciding factor. If it is deafeated then a vote of confidence may be made dissolving the government and making way for an election. I suppose time will tell?
Jb- I think you will find that the last time the polsters saw a similar set of figures to Rudd's was with John Howard in 1995.
Questions relating to the $500,000 dollar GI were raised in Parliament. Believe me if I was earning that sort of money I wouldn't be able to wipe the Colgate grin off my face.
By way of background the unidentifie person is a nice guy. However, I think we could all be nice if we were earning that sort of money. I think most junior barrieters could only dream of earning $500,000 in their first year at the bar. To put things into perspective our star counsel like Sandy Street QC doesn't even earn that amount of money tax free.
In fact, the real story is the unidentified person was a regular military lawyer with about 5 years post admission exeprience. He decided to resign from the military and join up as a reservist for personnel reasons. During this period he went to work at the bar where he qucikly set up practice with another reservist. The Board of Inquiry which investigated the death of a member overseas lasted for approximatley one year. After the inquiry was over the unidentified person decided to rejoin the military legal core and was successful.
I am not sure about what lawyers in Canada earn but it would be pretty hard to beat $500,000 per year.
It is noted that reserves in Canada earn 85% of the permanant officer salary. In Australia reserves perform training days where they aern less than 85% however, they are compensated by paying no tax. The really lucrative work can be obtained if you are lucky enough to pick up sessional fees as counsel for Defence. Also if you are a public servant working for the JAG you can also work as a reservist. As you can imagine there are some public servants who are very eager to perform legal work and they are well placed to know when it is coming up. You might want to see if the Canadian JAG has similar arrangments.
"ratting" - Gordon you promised!
Anon – Why rat when you can win the day simply by being very clever. For instance, as a law student and Commonwealth Public Servant I was absolutely appalled about the lack of ethics being displayed and potential misuse of public resources. In fact, I was so bothered about this that I arranged a briefing with the Office of Legal Services Coordination (OLSC). Essentially, OLSC regulates and sets the fees for all Commonwealth counsel and are empowered to do this under the Judiciary Act. The regulation and scales for setting fees are laid out under the Legal Services Directions (LSDs) which is a binding legislative instrument. This includes reservists who are acting as Commonwealth counsel for the Department of Defence. As I am very familiar with the LSDs I suggested that fees for reservists should be reduced by 40% to take into account that they are paying no tax on the income derived from being a Commonwealth Counsel. As you can imagine this caused a huge uproar and I waited to see how long it would take for the reservists to challenge the decision made by the Attorney-General. People were claiming that they would be going bankrupt and wouldn’t be able to service their mortgages in Double Bay or pay their professional insurance. They came up with the very predicable argument from an eminent counsel who suggested that there may be some constitutional issues challenging with challenging the tax free status of reserve counsel rates. This argument is tenuous at its best as the reserve personnel legislation never envisaged Commonwealth counsel rates. Also the intention behind doing reserve work is that it is occasional and it was never envisaged by parliament that reservists would sit on a Board of Inquiry for a year. Apart from anything else the reservist are employed and paid by the Commonwealth so when they perform court work they are counsel for the Commonwealth.
Some might say that I am a narrow minded bureaucrat. In fact, this is not the case as it doesn’t stop at counsel fees. For example, for those of you who are not familiar with Boards of Inquiry (BOI) they are usually held after there has been a major fatality like a Blackhawk plunging into the sea. Several years ago there was a huge stink after a reservists and senior junior counsel in Sydney decided that a BOI needed to be established in Nepal after a major aircraft fatality had occurred their in the mountains. This might seem reasonable on the face of it but instead of conducting a routine BOI it became more of a Himalayan trekking exhibition. To my horror members of the deceased family and friends and groups of people from Defence had a trekking holiday. I am not kidding either as there are even slides. As you can imagine the Chief of the Defence Force was very annoyed about this especially when it was raised in Senate Estimates as it is embarrassing and made a mockery of the system. To conclude I am pleased to say that individuals are no longer allowed to host inquiries where incidents occur. By all means forensic experts can visits the scene of the accident to collect evidence but there are no longer anymore free overseas holidays for reservists and their families.
"I am very familiar with the LSD" - this is becoming more and more evident.
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