Either He Lied or He is a Moron. Neither is Good

By Gord Gekko
web posted June 1997

If you happened to catch an interview with NDP MP Nelson Riis (Kamloops)on "The National" during the election, you might have seen him rail away at corporations that get away with murder, that murder specifically being that they pay no tax while ordinary Canadians bare the real burden.

Riis specifically picked on a company called Silcop Ltd, a company that has 570 stores, such as Mike's Mart, Becker's and Mac's, across Canada.

Said Riis on the program, "Their sales were $600 million last year and their profits were $800-million, and they paid no income taxes at all."

Like the people who always mess jokes up because they repeat it only half correctly, Riis got some parts a little wrong.

For instance, Riis rattled their profit off at $800-million. Not bad, right? Wrong. Silcorp actually had a profit of $8.7-million. Riis was only off by $791.3-million.

What Riis actually did get right was the fact that Silcorp didn't pay taxes last year, and won't likely until 2001. The company came out of bankruptcy protection just last year and was given tax breaks in a bid to help it survive.

The company made $8.7-million on sales of $634-million, but didn't pay taxes because it had lost $100-million between 1989 and 1992. I'm sure Riis wishes he could tax losses to.

As explained in a Toronto Star article, the company is currently renovating stores and hopes to increase their profits. Who wins out?

First, the employees. Of course, to socialists like Riis, companies like Silcorp don't have employees, just white males in suits.

Second, how about people who own stock in the company. Riis, and people like him, like to portray the average stock holder to be Conrad Black, but the fact of the matter is most Canadians own stocks. Do you have a pension? You own stocks, where do you think that money comes from? As the story pointed out, people counting on their pensions might be happier if Silcorp doesn't go under if their fund owns Silcorp stock. (I wonder if Riis owns stock?)

Riis, and the NDP, called for a minimum corporate tax because they believe that corporations pay nothing. The money derived from those taxes would be used to try and create jobs and increase social program spending.

Hopefully last month's little piece on corporate taxation dispelled the myth of companies dancing away paying no tax.

According to Statistics Canada, Canadian corporations earned less than $14-billion in profit after taxes in 1996. By comparison, the GST, by itself, pulled in $17-billion.

What the New Democrats forget is that corporations pay anywhere between 32 and 41 per cent of pretax earnings. A minimum corporate tax would simply be another reason for companies to layoff workers, assuming some of the smaller don't go under.

What would have happened to Silcorp with a minimum tax? Who knows, but there is a good chance that the 6 000 employees of Silcorp would have joined 1.5 million other Canadians wondering why all this great social spending didn't get them another job.

So why did Riis misquote Silcorp's actual profit by nearly $792-million?

The first reason might be that he simply lied in an attempt to save his party from once again not having enough seats in the House of Commons to be recognized as an official party.

The second reason might just be more dangerous. Riis may simply be a moron, the type of person who simply refuses to acknowledge facts. Riis thinks that businesses should be taxed more to provide social programs to those in need, forgetting that businesses that close down effectively add more people to those lines. Riis, worried that Canadians are tired of being reamed for more money, looks to a group he believes has endless pockets.

Those endless pockets, derived in a manner that Riis apparently doesn't understand, is the ticket to his socialist paradise.

Riis, by training, is an educator, but has been the New Democrat spokesperson for Small Business, Regional Expansion and Parliamentary House Leader for the Federal Caucus (in which capacity he served on the Board of Internal Economy). For five years he acted as Deputy Leader of the Federal Party. He currently serves as the spokesperson for Finance, Taxation and International Financial Institutions. With this type of experience, looking over the real numbers, how could he come to the conclusion that businesses are getting off so lucky?

It can only be that Riis is a moron.

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