New York Times takes ‘secretive’ AdvantageBC society to court over financial statements disclosure refusal

Tax exemptions for members of society run by the province raise concerns 

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The New York Times Co. is taking the International Financial Centre British Columbia Society, known as AdvantageBC, to court over the society’s refusal to disclose financial statements to the newspaper.

In a petition filed May 4 in BC Supreme Court, the New York Times seeks an order for AdvantageBC to deliver information requested under the Societies Act about remuneration paid by the society in the last fiscal year.

The newspaper “seeks information about a secretive tax-incentive program operated by the Province of British Columbia through a society doing business as AdvantageBC,” the petition states. “Members of AdvantageBC receive significant provincial tax exemptions and incentives through a program established by the International Business Activity Act.”

The society, according to the petition, refused to disclose the requested records in violation of the Societies Act, claiming to be exempt from disclosure requirements as a “member-funded society.” The refusal prompted the Times to apply to the BC Registrar of Societies for a production order, which was granted on March 31, giving AdvantageBC 15 days to provide the records along with an explanation for the initial refusal.

However, on April 13, AdvantageBC’s president and CEO, former BC Liberal finance minister Colin Hansen, “provided  a statement to the registrar in which he again asserted that AdvantageBC was a member-funded society and on that basis was exempt from the disclosure provision of the Societies Act.”

Documents attached to an affidavit in the file include BC Online summaries for the International Financial Centre British Columbia Society. In a summary document dated March 24, 2017, the organization is listed as not being a “member-funded society.”

However, Hansen claimed in correspondence that the group had been a “member-funded society” for 20 years, though a summary document dated May 4 reveals the society’s status was changed to being a “member-funded society” in the weeks after the newspaper made its initial inquiries.

“Member-funded societies are exempted from certain provisions requiring disclosure of financial records,” the petition states. “AdvantageBC was not a member-funded society at the time of the registrar’s order.”

The petition follows the Times’ story about AdvantageBC’s mandate of luring international businesses to the province through an “opaque array of tax breaks.” It noted that a “core member” of AdvantageBC, PacNet Services, had been removed from the group’s website, having been listed even after the U.S. government branded PacNet as a “transnational criminal organization.”

Hansen, who didn’t respond to Business in Vancouver’s request for comment, has defended the program.

New York Times’ lawyer, Neil Chantler, declined to comment on the case when reached by BIV.

“I’m not in a position to comment on the case,” he said. “The documents speak for themselves.”

Dermod Travis with IntegrityBC, spurred by the Times’ story, started looking into AdvantageBC and admitted in a phone interview with BIV that it hadn’t been on his radar before.

“When you look at the bulk of the members, [they] are either Canadian or American, and they’re only here for the tax advantage,” Travis said. “When you see a company that is a member of AdvantageBC leave Bermuda for Burnaby, sorry, with all due respect to Burnaby, this does not strike me as an instant love with a community in Metro Vancouver. This is an instant love with the tax break.”

He said the secretive nature of AdvantageBC’s activities surprised him most, but the “outsourcing” of government functions fits in with other programs that have been handed off to entities not subject to freedom of information law and which don’t show up as line items in budgets and public accounts. The fact that hedge funds can be members is also puzzling, he said.

“Hedge funds don’t generally demonstrate job creation capacity,” he said. “It’s not something that provides ordinary British Columbians with jobs, and certainly the way the program is structured, British Columbians need not apply because the tax break for employees does not go to people who reside in Canada.”