Sponsor-gate is just one of many scandals

Monday, May 3, 2004


Written by Scott Piatkowski

Since the release of the Auditor General’s report into the Federal Sponsorship Program, the Reformatories have been focusing their attacks on the Liberals almost exclusively on this one issue. It’s as if every other national issue had disappeared from the national political scene in favour of attacking “Liberal corruption” (which, we are to presume, is different from Conservative corruption).

While I’m as disgusted as the next person with the waste of public funds on such questionable projects, and the diversion of a significant portion of those funds in the pockets of Liberal-friendly ad agencies, one wonders why the Official Opposition cannot view these scandals in a wider context or figure out that there are other issues in need of attention. Could it be that the Reformatories don’t think these issues are important, or are they content to leave these issues to the NDP and the Bloc?

Here’s a handy guide to just three of the OTHER reasons to be outraged at the Liberals (or, as they now prefer to be called, “Paul Martin’s Team”):

Misappropriation of Employment Insurance funds

Before Paul Martin got his hands on the program, Unemployment Insurance could be claimed by most unemployed people. That changed along with the name, as eligibility rules were rewritten to exclude the majority of potential claimants. According to the Public Service Alliance of Canada, “The only beneficiary in the Employment Insurance scheme is the federal government. While premiums continue to be collected, even from low income earners, and eligibility drops, the government keeps building a surplus.

“In 1992, the Unemployment Insurance account stood at $20.5-billion. Of that, $15.3 billion was paid out in benefits to unemployed workers, while the remainder covered costs associated with employment programs, administration, maternity, parental and sickness benefits. In 2002, the EI account stood at roughly the same amount - $20.4 billion. Except that now benefit payments accounted for only $7.2 billion and other costs remained the same at $5.2 billion. The remaining $8 billion - more than had been paid out in benefits - was allocated as a surplus. Without the EI surplus, the Liberal government would have to report a budget deficit, rather than an overall surplus. The EI surplus is now over $40 billion.” The Auditor General has estimated that this surplus is $25 billion more than it needs to be.

Tax breaks for themselves

In 1994, Martin pledged that he would close loopholes that allowed companies – including his own company – to shelter their income by nominally conducting their business in offshore tax havens such as Liberia. What he didn’t mention was that he was opening one loophole at the same time as he was closing another, by exempting Barbados from the new restrictions. Within months, Canada Steamship Lines had “packed up and moved” to Barbados (which is pretty easy to do when your operations in a country are on paper only). I’m sure that all Canadians currently completing their Income Tax Returns will be thrilled to know that their Prime Minister took care to ensure that his company would pay taxes in the neighbourhood of two-per-cent.

During the entire time that he was Finance Minister, Martin was routinely briefed on matters affecting his company, which was supposedly in “a blind trust”. Blind trust is a good name for what Martin is asking for from the Canadian people.

Lobbyists lobbying government from within

The Paul Martin Office (PMO) employs eight people who are or were registered as corporate lobbyists, including his Chief of Staff and his Deputy Chief of Staff. Martin’s transition team included another ten active or recently active lobbyists. Federal NDP Leader argues that “the only thing transparent in Paul Martin's government is the glass in the revolving door.”

As Duff Conacher of Democracy Watch points out, “What happens when you have these corporate lobbyists on the inside, as they have been on Martin's campaign, and with corporate money--all of these lobbyists are legally required by their contracts to advance and advocate the interests of their clients, which are large corporations. Martin, as a politician, is legally required to uphold the public interest. When you tie the two together, the public interest will always suffer and be ignored, because the private interests have the inside line. If you gain access to a politician, you automatically gain influence over that politician. Especially when you're doing favours for that politician, which all of these corporate lobbyists have been doing. They've been volunteering on his campaign, helping him raise money.”

As disturbing as the sponsorship scandal is (particularly given that no one appears willing to admit that they did anything wrong), it might be helpful if the Reformatories and the media spent a little more time dealing with some of the other scandals. If they fail to do so, the Liberals may well be able to count the sponsorship scandal as one of the great diversionary tactics in Canadian political history.

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