An Oscar Worthy Performance

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By: Adam Aptowitzer

Readers will likely agree that the study and practice of taxation can be both interesting and, at least at times, exciting. It is therefore surprising that there are not more movies featuring tax lawyers and accountants. One would imagine these movies would show a tax litigator with a well-muscled calculator finger fighting off the faceless hordes of CRA auditors to free the unjustly reassessed taxpayer in distress. Yet, despite the self-image of those in private practice as the Luke Skywalkers of the tax world, a recent movie has portrayed us more as servants of the dark side.

The Great Canadian Tax Dodge is clearly a polemical movie building on the recent mainstream media stories of international corporate tax avoidance and the so-called 1% movement. It should go with saying that any movie dealing with taxes could not possibly canvass the fundamental issues necessary to understand the higher level tax saving strategies (although this movie does do a good job of it). Thus the movie defaults to a much more populist theme by making private practice tax lawyers and accountants – especially of large corporations – out to be the bad guys. The good guys, perhaps predictably, are those who believe that corporations should be paying more tax.

Tax avoidance as described in the movie is effectively the use of standard corporate tax planning. And the plans we draft take advantage of a legislative regime not designed for such corporate manipulation and a bureaucracy that seemingly cannot keep up with the legerdemain of the private tax bar. Those in the industry know that the international nature of tax planning is such that different regions compete against each other for the express purpose that corporations will move into those jurisdictions. Tax professionals simply navigate those laws. In a point made by Al Meghi[1] (called the Wayne Gretzky of tax litigators in the movie) if lawmakers think this immoral then they should not be legislating in such ways that provide such incentive.

In painting the industry as nefarious the producers state that the private tax professionals prefer to work in the shadows and were only dragged into the limelight by corporate media crusaders. (They were apparently serious about this. Did the producers not see the plethora of advertisements of the big four accounting firms and law firms at airports and hockey rinks? Advertising hardly seems like a good way to hide). It is easy to see a narrative being built that those who seek to structure their affairs to pay the least tax legally possible are the bad guys and the professional that help them are the servants of evil.

The movies attacks on corporate tax avoidance are predictable. It couches the typical tax plans as being unfair to government revenues and the social services which the government funds. The basic idea being that these corporations are not paying their fair share of taxes to the detriment of the poor, homeless and underprivileged. While the documentary makes some headway in pointing out the international nature of this problem it also takes shots at Canada’s good faith in resolving this issue taking shots at both Jim Flaherty and Paul Martin’s good faith in filling the role of Finance Minister. Indeed, the movie even derides the typical corporate tax line that they are paying all tax legally required. That this should be a concept worthy of ridicule would be laughable…if the Great Canadian Tax Dodge were a comedy.

That this is the first movie review in 35 years of the Canadian Taxpayer is indicative not of a general lack of interest in the moving pictures but rather the dearth of good quality tax movies.  Not since the great Day After Tomorrow film proposed the burning of the Internal Revenue Code to keep warm has tax figured so prominently in a movie for public consumption. While the slightly less fictitious Great Canadian Tax Dodge served to fill the greatly underserved market for tax movies this reviewer gives it one thumb down (it gets one thumb up just for being a tax movie!). It appears though that the producers thought better of practicing what they preach given that the very last listing in the credits is an announcement that they took advantage of the Canadian Film or Video Production tax credit.

[1] Interviews were also obtained from Michael Wilson, David Dodge, Bob McMechan and Linda McQuaig

Originally published in “The Canadian Taxpayer” Volume XXXVII, March 20, 2015, p.46-47