True or False: There aren’t always absolutes

The complainant, Stephen Birch, took issue with a Metro Morning interview with Finance Minister Bill Morneau. He said the minister had made a false statement about how Canadians are taxed and it was the responsibility of the program host to challenge it. It is not at all clear that in this context the reference was wrong.

COMPLAINT

You were concerned that a statement made by the Minister of Finance, Bill Morneau, during an interview with Metro Morning host Matt Galloway, went unchallenged. The interview was broadcast April 7, 2016, shortly after the tabling of the federal budget and one day after the release of the Panama Papers. The Panama Papers is the collective name given to tens of thousands of documents leaked about tax evasion and avoidance. Some Canadians were featured in the documentation. You took issue with the Minister’s statement that the “tax system is aimed” at ensuring people pay their taxes in the jurisdiction where it is earned. You noted: “this is patently false.” You explained that the Canadian Revenue Agency (CRA) taxes people on their income, no matter where it is earned.

You added that you had contacted Metro Morning directly, but no one had responded to you. You believe that there is an apology owing for failure to respond, and that the programmers have a responsibility to let the listeners of Metro Morning know the “Minister was not being 100% truthful.” You believe it is the duty of CBC journalists to challenge policy makers in the course of an interview:

As a public, and publicly funded, broadcaster I believe they have a duty to ensure accuracy and transparency in the information conveyed to the public. I also believe they have a duty to challenge Ministers of the Crown when they fail to provide the truth about government policies and programs.

You added, in later correspondence:

As it is the Minister realises he can get away with falsehoods like this that appear to make his Ministry’s policies ever so reasonable when in fact they are draconian.

MANAGEMENT RESPONSE

The Executive Producer of CBC Radio in Toronto, Joan Melanson, replied to your complaint. She apologized for the delay in providing an answer.

She provided context for the interview with Bill Morneau, the Minister of Finance. She explained the interview occurred one day after the Panama Papers leak. She explained that was the context for the interview -- there was quite a lot of anger and outrage that some Canadians had either avoided or evaded collection of taxes in this country by moving the money offshore. She added that the questions, and the minister’s responses, focused on the issue of paying taxes in Canada on money earned here:

Mr. Galloway asked him what does “appropriate” and “inappropriate” mean in this context. Mr. Morneau replied, “We want to make sure that people pay their taxes in the jurisdiction where they earn their money and that’s the broad principle that we’re focused on here”. He came back to repeat the point a few minutes later saying, “We have to have laws that are clear and that allow us to be sure that people are paying taxes within the jurisdictions in which they’re earning money.”

Of course, Mr. Moreau is in the best position to explain what he means, but as I understand his remarks, he is saying that if you earn money in Canada, you should pay taxes on it in Canada at the Canadian tax rate, not send it to a tax haven in another country that mandates a lower tax rate. As an example, Quebec has a long standing agreement with Barbados that allows companies with assets in both jurisdictions to be taxed in only one. The highest tax rate in that Caribbean country is 2.5 percent.

REVIEW

Your complaint raises the question of accuracy. This is what CBC Journalistic Policy has to say on the subject:

We seek out the truth in all matters of public interest. We invest our time and our skills to learn, understand and clearly explain the facts to our audience. The production techniques we use serve to present the content in a clear and accessible manner.

You pointed out that the Minister’s statement about the aim of the tax system being to ensure people pay their taxes in the place where they earned it. You took that to be a glaring and important omission because money is taxed no matter where it is earned. On the face of it, you are correct about tax policy. The question is: did the omission or the failure of the interviewer to challenge it distort the meaning of the conversation. Context does matter. The subject of this interview was not an overview of the tax system, or the fairness of it. In that context, you would be right that it would be necessary to provide people with the full facts so they could make up their own minds.

This interview was framed and focused on tax evasion and tax avoidance, and that has to do with the attempt, legal or not, to dodge paying taxes in the place of origin. This is how Mr. Galloway framed the interview:

Much has changed since Bill Morneau delivered his first budget as Minister of Finance. Statistics Canada has reported stronger economic growth than expected, the dollar has strengthened and just this week the Panama Papers have come to light. And in the wake of that leak, the Canada Revenue Agency put out a statement noting that the Federal government is giving it over 440 million dollars to combat tax evasion and aggressive tax avoidance. But as we heard yesterday, the majority of those who put their money in tax havens, are acting within our existing laws.

The subject at hand is the fallout from the Panama Papers and the significant problem of tax evasion. It is, in that context, that the Minister’s response should be seen. In one of his first responses to a question, Mr. Galloway asks about why the money to fight tax evasion was included in the budget. Mr. Morneau replies:

At a very high level we believe it is very important that people pay the taxes that they owe.

The conversation then clearly focused on the problem of money that is moved out of this country before it is taxed. The statement you object to comes in this exchange:

GALLOWAY: Back to the question again, it's legal but do you think people should be taking part in it?

MORNEAU: To the extent that it's legal, we will look at those laws to ensure that they're appropriate. If there's illegal actions going on obviously we're going to go after people who are avoiding taxes illegally and we'll stay focused on tax fairness over the term of our mandate, so if we come up with concerns that people are inappropriately moving their money to other jurisdictions, we'll take action.

GALLOWAY: What's appropriate and inappropriate in this conversation?

MORNEAU: We want to make sure that people pay taxes in the jurisdiction where they earn their money and that's the broad principle that we're focused on here. I'll have to work with my colleagues to make sure we're meeting up to that principle. That's an expectation that Canadians have and it's certainly what we'll be focused on.

The issue of the broader Canadian tax regime is irrelevant here. The omission does not change the meaning of the conversation or the point being made. Mr. Morneau referred to taxation where the money is earned, and adds, “that is the principle we are focusing on here.” And it is what is being focused on. Arguably, had the host intervened to challenge the Minister about the fact that Canadians must also pay tax no matter where they have earned the money, it might have confused the conversation. In reading the transcript, it is clear the interviewer is pursuing a particular line of questioning about a particular aspect of taxation. While the broader issue of what is taxed, and where, is an important one, it was not the subject of the interview. Its absence here is not a dereliction of the interviewer’s responsibility, nor is it a violation of journalistic policy.

I note your frustration at the length of time it took you to get an answer. That was unacceptable. You also mentioned you wrote directly to the programme. I suggest managers assess the way incoming communication is evaluated and dealt with.

Esther Enkin
CBC Ombudsman