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Edgar Bronfman Senior  Letter 04  05-Jun-2000  $700-million Bronfman tax break
"And then you see people who don't need it getting a big freebie like this." George Harris

June 05, 2000
Edgar M. Bronfman
Chairman
The Seagram Company, Ltd.
1430 Peel Street
Montreal, Quebec H3A 1S9

Edgar M. Bronfman:

The Canadian taxpayer gave you a parting gift

I bring to your attention the following excerpts from an article which describes something the Canadian taxpayer gave you:

Vancouver Sun   03-Jun-2000   p. A1

$700-million Bronfman
tax break under siege


A social activist gets the go-ahead
to take on the controversial deal.


Janice Tibbetts
SOUTHAM NEWSPAPERS

OTTAWA For the first time in Canada, a private citizen has won the right to challenge favourable tax treatment given to another Canadian in a case that involves millions of dollars in tax breaks to one of the country's richest families.

The Federal Court of Appeal ruled Friday that George Harris, a Winnipeg social activist, can take Revenue Canada to court to contest the tax collector's decision to allow $2 billion in family assets, believed to belong to the Bronfmans, to escape the country tax free.

[...]

Harris, 55, said in an interview[:]  "Personally, I've seen our government at different levels saying constantly that they don't have money to do this and do that and then you see people who don't need it getting a big freebie like this."

The ruling breaks legal ground because it is the first time that a Canadian citizen has been granted permission to challenge tax treatment of another individual, said Harris' lawyer, Arne Peltz.

[...]

The decision upholds a January 1999 ruling by Federal Court Justice Francis Muldoon, who said that allowing billions to escape the country untaxed smacks of "favouritism" and "grave maladministration."

Harris' legal fight was prompted by a controversial and secret tax ruling by Revenue Canada in 1991 that, federal sources confirmed in newspaper reports five years later, allowed the Bronfmans to move more than $2 billion worth of Seagram Co. stock, held in two family trusts, to the United States without paying capital gains tax.  The decision let the family avoid as much as $700 million in taxes.

[...]

The tax break in question sparked a severe rebuke four years ago from Auditor General Denis Desautels in a report that noted officials in the revenue and finance departments initially opposed granting the family a favourable tax ruling, but the decision was overturned by more senior officials in meetings for which no minutes were prepared.


Concerning which I have questions

Concerning the above excerpts, I have only four short questions:

(1) What benefit were you able to provide the Canadian government in exchange for its $700 million gift to you?

(2) Can you think of any reason why the Canadian taxpayer should not resent you personally for having to shoulder your share of the tax burden?

(3) What contributions have you been making in recent years to the Canadian Jewish Congres (CJC)?  This information would help answer the question of whether the Canadian taxpayer is subsidizing the CJC by giving you tax breaks which you then pass along to the CJC, one expects only in part.

(4) Do you not think human nature being what it is that any resentment that the Canadian taxpayer may feel towards you could spill over, in large part or in small, to Jews generally, such that you may be one of the causes (and taking several of your other activities into account, one of the leading causes) of the sentiment that goes under the name of "anti-Semitism"?



Lubomyr Prytulak


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