FacebookTwitterGoogle+RedditEmail

“Canadian” Corporate Capitalism

shutterstock_372930061

Twenty-first century “Canadian” corporate capitalism is quite the racket.

Built with public subsidies, a Montréal firm can shift its ‘head office’ to a tax haven and workforce abroad, but Ottawa will continue to use its diplomatic, economic and military might to advance the company’s reactionary international interests.

As part of its coverage of the Panama Papers, the Toronto Star recently reported that Gildan Activewear paid only a 2.8% tax rate on more than $1.3 billion US in declared income the last five years and it’s unclear if any of the apparel company’s measly $38 million in tax was paid in Canada.

After benefiting from government subsidies and financial backing from Quebec’s Fonds de solidarité labour investment fund, Gildan opened a subsidiary in Barbados sixteen years ago to sidestep Canadian tax. The firm took advantage of a tax treaty that permits companies to repatriate profits from the small Caribbean nation, which has a 1.5% corporate tax rate, without being taxed in Canada.

Concurrently, “free” trade agreements have enabled Gildan to shift its (unionized) Canadian and US production to Honduras, Nicaragua, Dominican Republic and Haiti where it’s pursued an aggressive anti-union “sweatshop” policies. Without a high-profile brand name (until recently) Gildan has focused on producing T-shirts and socks at the lowest cost possible. Any increase in the dismally low wages it pays in these countries is a threat to their ultra-low-cost production model, which competes with even lower wage jurisdictions in Cambodia and Bangladesh.

Despite Gildan moving its production to low-wage jurisdictions and its headquarters to a tax haven, Ottawa has continued to advance the company’s interests. In 2004 Ottawa helped overthrow Haiti’s elected government and backed a military coup in Honduras five years later partly to protect Gildan’s ultra-low-wage production model.

At the start of 2003 Jean-Bertrand Aristide’s government increased the Haitian minimum wage from 36 gourdes (US$1) a day to 70 gourdes. Of course, this was opposed by domestic and international capital, which used Haiti’s lowest wages in the hemisphere as a way to beat back workers’ demands in other Caribbean and Central American countries. At the time most of Gildan’s work in Haiti was subcontracted to Andy Apaid, who led the Group 184 domestic “civil society” that pushed to overthrow Aristide’s elected government. Coincidentally, two days after the US/France/Canada coup, Foreign Affairs stated “some Canadian companies are looking to shift garment production to Haiti.” By 2009 Gildan was the country’s largest employer after the state, employing up to 8,000 Haitians (directly and indirectly) in Port-au-Prince’s assembly sector.

To the west, Honduran President Manuel Zelaya raised the minimum wage by 60% at the start of 2009. Gildan’s opposition to Zelaya’s move to increase the minimum wage was one reason Ottawa tacitly supported the ouster of the elected president’s later that year. Under pressure from the Maquila Solidarity Network, Nike, Gap and two other US-based apparel companies operating in Honduras released a statement called for the restoration of democracy three weeks after the military overthrew Zelaya. With half of its operations in the country, Gildan refused to sign this statement. Since the coup Gildan’s Honduran workforce has grown from 11,000 to 26,000, making it the largest private employer in the country.

A Globe and Mail Report on Business profile described Gildan as “the ultimate fruit of globalization.” A firm that pays little tax, low wages and that employs the state to advance its reactionary international interests — neoliberalism at its finest.

More articles by:

Yves Engler’s latest book is ‪Canada in Africa: 300 years of Aid and Exploitation.

Weekend Edition
September 21, 2018
Friday - Sunday
Paul Street
Laquan McDonald is Being Tried for His Own Racist Murder
Brad Evans
What Does It Mean to Celebrate International Peace Day?
Alexandra Isfahani-Hammond
Hurricane Florence and 9.7 Million Pigs
Nick Pemberton
With or Without Kavanaugh, The United States Is Anti-Choice
Andrew Levine
Israel’s Anti-Semitism Smear Campaign
Jim Kavanagh
“Taxpayer Money” Threatens Medicare-for-All (And Every Other Social Program)
Jonathan Cook
Palestine: The Testbed for Trump’s Plan to Tear up the Rules-Based International Order
Jeffrey St. Clair
Roaming Charges: the Chickenhawks Have Finally Come Back Home to Roost!
David Rosen
As the Capitalist World Turns: From Empire to Imperialism to Globalization?
Jonah Raskin
Green Capitalism Rears Its Head at Global Climate Action Summit
James Munson
On Climate, the Centrists are the Deplorables
Robert Hunziker
Is Paris 2015 Already Underwater?
Arshad Khan
Will Their Ever be Justice for Rohingya Muslims?
Jill Richardson
Why Women Don’t Report Sexual Assault
Dave Clennon
A Victory for Historical Accuracy and the Peace Movement: Not One Emmy for Ken Burns and “The Vietnam War”
W. T. Whitney
US Harasses Cuba Amid Mysterious Circumstances
Nathan Kalman-Lamb
Things That Make Sports Fans Uncomfortable
George Capaccio
Iran: “Snapping Back” Sanctions and the Threat of War
Kenneth Surin
Brexit is Coming, But Which Will It Be?
Louis Proyect
Moore’s “Fahrenheit 11/9”: Entertaining Film, Crappy Politics
Ramzy Baroud
Why Israel Demolishes: Khan Al-Ahmar as Representation of Greater Genocide
Ben Dangl
The Zapatistas’ Dignified Rage: Revolutionary Theories and Anticapitalist Dreams of Subcommandante Marcos
Ron Jacobs
Faith, Madness, or Death
Bill Glahn
Crime Comes Knocking
Terry Heaton
Pat Robertson’s Hurricane “Miracle”
Dave Lindorff
In Montgomery County PA, It’s Often a Jury of White People
Louis Yako
From Citizens to Customers: the Corporate Customer Service Culture in America 
William Boardman
The Shame of Dianne Feinstein, the Courage of Christine Blasey Ford 
Ernie Niemi
Logging and Climate Change: Oregon is Appalachia and Timber is Our Coal
Jessicah Pierre
Nike Says “Believe in Something,” But Can It Sacrifice Something, Too?
Paul Fitzgerald - Elizabeth Gould
Weaponized Dreams? The Curious Case of Robert Moss
Olivia Alperstein
An Environmental 9/11: the EPA’s Gutting of Methane Regulations
Ted Rall
Why Christine Ford vs. Brett Kavanaugh is a Train Wreck You Can’t Look Away From
Lauren Regan
The Day the Valves Turned: Defending the Pipeline Protesters
Ralph Nader
Questions, Questions Where are the Answers?
Binoy Kampmark
Deplatforming Germaine Greer
Raouf Halaby
It Should Not Be A He Said She Said Verdict
Robert Koehler
The Accusation That Wouldn’t Go Away
Jim Hightower
Amazon is Making Workers Tweet About How Great It is to Work There
Robby Sherwin
Rabbi, Rabbi, Where For Art Thou Rabbi?
Vern Loomis
Has Something Evil This Way Come?
Steve Baggarly
Disarm Trident Walk Ends in Georgia
Graham Peebles
Priorities of the Time: Peace
Michael Doliner
The Department of Demonization
David Yearsley
Bollocks to Brexit: the Plumber Sings
FacebookTwitterGoogle+RedditEmail