Harris sued Revenue Canada for
allowing a wealthy family,
believed to be the Bronfmans
of Montreal, to transfer huge
sums of money to [the
USA] without paying an
estimated $300- to
Toronto, Thursday, December 20, 2001
scolds tax officials, but crusader loses
By KRISTA FOSS Thursday, December 20,
2001 -- Page A1
WINNIPEG -- A Federal
Court judge has scolded Revenue Canada's
"sloppy practice" in its handling of
controversial rulings that let a rich
Canadian family move nearly $2-billion
across the U.S. border without paying
Nonetheless, Madam Justice Eleanor
Dawson dismissed a legal challenge
yesterday against the federal tax agency.
It alleged that those rulings were made in
bad faith and with ulterior motives.
Her decision brings to an end a
five-year legal odyssey that turned
57-year-old Winnipeg bookkeeper and social
activist George Harris into a folk
hero for average taxpayers.
In an unusual and precedent-setting
legal case, Mr. Harris sued Revenue Canada
for allowing a wealthy family, believed to
be the Bronfmans of Montreal, to
transfer huge sums of money to a
cross-border trust fund without paying an
estimated $300- to $600-million in taxes.
Mr. Harris argued that the family received
Judge Dawson ruled there was
insufficient evidence to support Mr.
Harris's case, but she had plenty of
criticism for Revenue Canada in her
"Indeed, given the large amounts of
money involved, it is astonishing that
senior officials at Revenue Canada failed
to keep minutes of certain meetings where
crucial decisions were being made. It is
axiomatic that poor practice of this sort
has the potential of compromising public
accountability," she wrote.
Harris's case failed to prove the bad
faith on the part of the government
that it had alleged, Judge Dawson
ordered the Crown to pay him and his
lawyers undetermined costs.
"I can't say I was terribly surprised,"
Mr. Harris said yesterday. He called the
decision a moral victory for his side.
At issue for him, and the
Winnipeg-based public interest group
CHOICES that backed
him, was whether Revenue Canada treats
some taxpayers -- especially the
well-heeled -- better than others.
Two advance tax rulings made while the
federal Conservatives were in power
allowed a family to transfer nearly
$1-billion worth of trust assets to the
U.S. in 1985 and then again in 1991
without paying a dime in taxes.
In 1996 the auditor-general at the
time, Denis Desautels, and his
staff investigated the rulings and
published their findings in a report.
After reading the report, Mr. Harris,
who has a degree in actuarial mathematics,
took up the gauntlet. The crux of his
argument was that the advance tax rulings
were made in meetings held in haste behind
closed doors and without
In five years of legal manoeuvres, his
team scored some significant victories for
public-interest litigation: They were able
to obtain standing for Mr. Harris, as a
citizen, in a case against the government
challenging the tax treatment of another
citizen. And they were able to qualify the
former auditor-general as the star witness
in a public-interest case.
The case finally made it to Federal
Court this fall.
"From the day this litigation started,
I said that all George Harris was asking
was that he be given his day in court and
the case be decided on its merits," lawyer
Norm Cuddy said a few hours after
the decision was released. "After five
years that's what he has."
Judge Dawson argued that Mr. Harris's
lawyers did not present enough evidence to
conclude bad faith or preferential
treatment on the part of the government.
"Another available conclusion is sloppy
practice and haste," she wrote.
But she didn't consider Mr. Harris a
"busybody," as federal lawyers had called
"Though ultimately unsuccessful in this
instance, public institutions and the
confidence which they carry can only be
strengthened by close scrutiny of
government actors by responsible
citizens," she wrote.
Mr. Harris, a man of modest means who
describes himself as "anal" when it comes
to filing tax returns, said that although
he is through with fighting the tax system
for now, his days of challenging
government aren't over.
"I'm really interested in how the
government does its
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