Quotulatiousness

November 26, 2025

The importance of “a bicycle shop in Bermuda” to Mark Carney’s financial affairs

Filed under: Cancon, Government, Law, Media, Politics — Tags: , , , , , , — Nicholas @ 03:00

It’s no secret that Prime Minister Mark Carney is a rich man. When he entered politics, he put his financial holdings into a blind trust to satisfy the federal government’s ethical and conflict of interest rules. But through this arrangement, he still owns significant positions in companies whose fortunes can (and are) affected by the actions of his government. On Monday, this was discussed at some length by a Parliamentary committee in Ottawa, as reported on his Substack by Dan Knight:

On November 24, in a basement room of West Block, MPs spent two hours asking a very simple question that everyone in Ottawa is suddenly pretending is complicated:

If Mark Carney gets richer when Brookfield does better, and Brookfield is running big climate and infrastructure funds out of what one MP described as a bicycle shop in Bermuda, how on earth is that not a problem for the Prime Minister of Canada?

The man in the hot seat was Justin Beber, Chief Operating Officer of Brookfield Corporation. His job was to calm everyone down. Instead, under oath, he calmly confirmed just about everything the government would rather you didn’t think about too hard.

He started with the corporate biography. Brookfield, he reminded the committee, is a massive global investor headquartered in Toronto. It has more than 600 direct employees in Canada, more than 15,000 workers in its operating businesses, and it paid over $750 million in federal tax last year, not counting provincial and local taxes. All of that is true. None of it changes the basic conflict: the sitting Prime Minister still has long-term compensation that rises when Brookfield, and certain Brookfield funds, succeed.

Conservative MP Michael Barrett went straight there. He asked Beber whether, when Brookfield’s value increases, the value of stock options and deferred share units also increases. Beber said yes. Then Barrett asked whether that changes if those options and units are placed in a blind trust. Beber said no. It does not. The economic reality is exactly the same: if Brookfield’s share price goes up, those instruments are worth more, whether they are in Mark Carney’s brokerage account or parked with a trustee behind frosted glass.

[…]

Cooper spelled out why it matters. Carney, he said, knows what kind of public policy could improve the success of the fund. The fund’s success determines his future bonus pay. Without knowing who the investors are or all of the fund’s positions, Canadians have no way to see where those incentives may line up — or collide — with the national interest. These are not theoretical conflicts. They are simply invisible ones.

Eventually, after some confusion over terminology, Beber did confirm that Transition Fund I has invested in 20 companies and that their names are listed in the ethics annex. Only one of those firms, Entropy, is in Canada. The rest of the portfolio, and the roster of big-money investors behind it, sits offshore, beyond any serious public scrutiny, while the Prime Minister’s upside rides on how well those bets pay off.

The tax side of the story is just as revealing. Bloc MP Luc Thériault put it bluntly: tax avoidance is not a conspiracy theory, it is a business model so widespread that the OECD and G20 built an entire 15 percent global minimum tax regime to deal with it. He cited Canada Revenue Agency estimates of tens of billions of dollars in lost federal revenue each year, including billions attributable specifically to tax avoidance. He asked Beber whether Brookfield engages in tax avoidance. Beber refused to use the term. “We practice tax planning”, he said, like “any other company”. He repeated that Brookfield pays all taxes that are “due and payable” in the jurisdictions where it operates.

That phrase sounds reassuring until you remember who writes the rules that decide what is “due and payable”, and who benefits when the system can be routed through Bermuda via something that, on paper, looks like a bicycle shop.

[…]

At some point, the pattern becomes impossible to ignore. The Prime Minister of Canada left a giant global investor with standard executive incentives, kept his vested long-term instruments, retained a carried interest in a $15 billion Bermuda-run climate fund that will operate into the 2030s, and knows exactly which sectors that firm is betting on. His government is now pouring public money and regulatory support into many of those same sectors. The firm uses structures justified as “tax transparent” that just happen to run through low-tax jurisdictions, including one address a Conservative MP described as a bicycle shop in Bermuda. The man running the firm’s operations will not say the Prime Minister’s potential upside is small. He will not say the global minimum tax is being met in practice. He will not disclose who the fund’s other investors are.

You do not need to be an expert in securities law to see the conflict. You do not need to be an expert in global taxation to see why a bicycle-shop registration in Bermuda is not about cycling. You just need to watch what they are desperate not to talk about directly: the hard link between public power in Ottawa and private profit offshore, wrapped in legal jargon, buried in annexes, and shielded from sunlight by a blind trust and a lot of very careful answers.

November 27, 2021

King James I and his hatred of tobacco smoking — “so vile and stinking a custom”

Filed under: Americas, Britain, Health, History — Tags: , , , , , , , — Nicholas @ 03:00

Anton Howes recounts some stories he uncovered while researching English patent and monopoly policies during the Elizabethan and Stuart eras:

… some of the most interesting proclamations to catch my eye were about tobacco. Whereas tobacco was famously a New World crop, it is actually very easy to grow in England. Yet what the proclamations reveal is that the planting of tobacco in England and Wales was purposefully suppressed, and for some very interesting reasons.

James I was an anti-tobacco king. He even published his own tract on the subject, A Counterblaste to Tobacco, just a year after his succession to the English throne. Yet as a result of his hatred of “so vile and stinking a custom”, imports of tobacco were heavily taxed and became a major source of revenue. Somewhat ironically, the cash-strapped king became increasingly financially dependent on the weed he never smoked. The emergence of a domestic growth of tobacco was thus not only offensive to the king on the grounds that he thought it a horrid, stinking, and unhealthy habit — it was also a threat to his income.

What I was most surprised to see, however, was just how explicitly the king admitted this. It’s usual, when reading official proclamations, to have to read between the lines, or to have to track down the more private correspondence of his ministers. Very often James’s proclamations would have an official justification for the public good, while in the background you’ll find it originated in a proposal from an official about how much money it was likely to raise. There was money to be made in making things illegal and then collecting the fines.

Yet the 1619 proclamation against growing tobacco in England and Wales had both. The legendary Francis Bacon, by this stage Lord High Chancellor, privately noted that the policy might raise an additional £3,000 per year in customs revenue. And the proclamation itself noted that growing tobacco in England “does manifestly tend to the diminution of our customs”. Although the proclamation notes that the loss of customs revenue was not usually a grounds for banning things, as manufactures and necessary commodities were better made at home than abroad, “yet where it shall be taken from us, and no good but rather hurt thereby redound to our people, we have reason to preserve”. Fair enough.

And that’s not all. James in his proclamation expressed all sorts of other worries about domestic tobacco. Imported tobacco, he claimed, was at least only a vice restricted to the richer city sorts, where it was already an apparent source of unrest (presumably because people liked to smoke socially, gathering into what seemed like disorderly crowds). With tobacco being grown domestically, however, it was “begun to be taken in every mean village, even amongst the basest people” — an even greater apparent threat to social order. James certainly wasn’t wrong about this wider adoption. Just a few decades later, a Dutch visitor to England reported that even in relatively far-flung Cornwall “everyone, men and women, young and old, puffing tobacco, which is here so common that the young children get it in the morning instead of breakfast, and almost prefer it to bread.”

[…]

Indeed, policymakers thought that the domestic production of tobacco would actively harm one of their key economic projects: the development of the colonies of Virginia and the Somers Isles (today known as Bermuda). Although James I hoped that their growth of tobacco would be only a temporary economic stop-gap, “until our said colonies may grow to yield better and more solid commodities”, he believed that without tobacco the nascent colonial economies would never survive. Banning the domestic growth of tobacco thus became an essential part of official colonial policy — one that was continued by James’s successors, who did not always share his more general hatred of smoking. Although the other justifications for banning domestic tobacco would soon fall away, that of maintaining the colonies — backed by an increasingly wealthy colonial lobby — was the one that prevailed.

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