www.lexisnexis.ca Vol. 32, No. 7 June 2016
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Defence counsel worried SCC ruling may cede too much turf

Officials of international organizations can breathe easier after the Supreme Court ruled 9-0 that key immunities guaranteed by an international treaty — signed by Canada and 187 other nations — shield two World Bank entities from domestic court orders to produce personnel or records in criminal prosecutions, including information relating to anonymous informants.

The April 29 judgment of Justices Michael Moldaver and Suzanne Côté, in favour of the appellant Washington, D.C.-based World Bank Group, is said to be vital to the global campaign against corruption, including Ottawa’s efforts to combat bribery by Canadians abroad: World Bank Group v. Wallace 2016 SCC 15.

Hiring of former CRA execs raises questions for some

The Big Four accounting firms — Deloitte, EY, KPMG and PwC — have, according to the CBC, routinely reached out over the past decade to hire many Canada Revenue Agency enforcement executives, as well as Department of Justice tax lawyers.

More than 40 such hires have been made since 2010, according to the national broadcaster. Experts say there are valid reasons why this is so and stress that while there are no rules to prevent the Big Four firms from hiring as they see fit, certain ethical guidelines need to be adhered to, particularly on the part of ex-government employees.

“It’s been a very long-standing practice for the large accounting firms and the law firms to hire people out of government, specifically in tax,” said Vern Krishna, counsel for TaxChambers LLP in Toronto.

Internal investigations will likely be more costly and difficult for Canadian companies with operations in the United States, following a change of policy by the U.S. Department of Justice that prioritizes the prosecution of individual employees for civil and criminal corporate wrongdoing, according to anti-corruption and white collar criminal defence lawyers.

The new policy is expected to compel companies being investigated by the DOJ for civil and criminal transgressions to undertake more timely, independent and thorough internal investigations that will almost certainly drive a wedge between the organization and its senior executives and employees, whose interests may be at odds, added the legal experts.

A long-standing tax incentive used by Canadian resource companies has come under fire from a prominent academic.

“Canada’s tax code allows the use of flow-through shares for mining and oil and gas companies on the assumption that they are a good way to spur new productive exploration and are also beneficial to investors. In reality, it appears that flow-through shares are lousy for both,” said Vijay Jog in his recent study Rates of Return on Flow-Through Shares: Investors and Governments Beware, published by the University of Calgary’s School of Public Policy.