Cheers & Jeers

Cheers: to good decisions. Canada’s Senate is in a kerfuffle about the way some senators are soaking up a little extra cash. The Senate pays up to $20,000 a year in housing benefits to senators who have to maintain a second residence in Ottawa. Seems that some senators who live in Ottawa already — including Tory Mike Duffy — have been designating other properties as their primary residences so they can get the money. In Duffy’s case, he claims his P.E.I. summer cottage as a primary residence, even though he’s lived in Ottawa for years. Ever the charmer, here’s part of an email Duffy wrote to the Ottawa Citizen when they asked about the behaviour: “I have done nothing wrong, and am frankly tired of your B.S.” (It’s a concept that may be familiar to anyone with a knowledge of politics in this province: at least one former Liberal cabinet member did the same thing with his cottage while living full time in St. John’s). Now, the Senate has set up a committee to investigate the practice, and one of the three committee members will be Senator (and former Newfoundland auditor general) Elizabeth Marshall. It would be better to get someone outside the Senate to review the workings of the Red Chamber, if for no other reason than to rule out conflict of interest. But if you need someone with a keen eye for auditing, Marshall’s a good pick.

Jeers: to financial surprises. Imagine the situation Toastmasters Inc. finds itself in: the company says it got bad tax advice, and didn’t know it had to pay Canadian taxes. When it found out it did, it filed a series of tax returns, paying out $42,000 in tax. It was then ordered to pay $600,000 in interest. Luckily, we have the able judges of Canada’s Federal Court to explain what went wrong: “The essence of the appellant's position is that the interest charge of over $600,000 on an ultimate tax balance of approximately $42,000 is absurd. However, this result reflects the fact that large losses sustained in the 2003 and 2004 taxation years were carried back to the 2001 and 2002 taxation years, and losses in the 2006 and 2007 years were applied to the 2005 taxation year. Had the appellant filed its tax returns when required in 2001, 2002, and 2005 it would have had taxable income in those years and been required to pay tax thereon. Only in subsequent years when a loss was incurred could a request for a loss carry back be made, which would result in a reassessment for the earlier years. The result of the late filing therefore benefited the appellant in that it was able to claim the loss carry back in the late filed 2001, 2002 and 2005 tax returns.”

Cheers: to interesting questions. Here’s how the St. John’s Port Authority describes itself: “As the St. John’s Port Authority, we are the federal agency responsible for administering the port in St. John’s, the capital city of Newfoundland and Labrador. We are financially self-sufficient and operate as a commercial enterprise. We derive all our revenue from port activities and re-invest all earnings into port infrastructure and operations.” So, since the City of St. John’s doesn’t own a ship, why are its taxpayers being asked to chip in up to $425,000 to build a security fence for a “commercial enterprise”?