Brian J. Arnold

Posting: 085
August 14, 2015

A Tribute to the Canadian Tax Foundation

1945 was a momentous year. World War II ended, the Canadian Tax Foundation was established, and I was born. I didn’t realize it at the time – and neither did my parents – but my professional life would be intimately linked with the Canadian Tax Foundation.

It may seem a bit tacky for someone as involved with the Foundation as I am to pay tribute to it, but by the time I no longer have any relationship with the Foundation, I will no longer have a platform. So please bear with me.

My involvement with the Foundation started in 1969 when I began teaching tax at Western. The Foundation was the only game in town and I became a member to take advantage of the Conference Reports and the Canadian Tax Journal. I attended my first Annual Conference in Vancouver in November 1971, where the centerpiece was tax reform (the Carter Report and the White Paper). Being young, naïve, idealistic and an academic, I was initially concerned that CTF conferences would be all about technical minutiae, with little relevance for someone who fancied himself a Big Idea guy (largely because I didn’t know anything about the technical details of the Canadian tax system and consequently rationalized that they weren’t important). Of course, I didn’t know anyone but I remember being impressed by the speakers, not only for the quality of the presentations but also for the wide range of perspectives, from tax professionals to academic economists.

My first presentation at a Foundation conference was in 1977 at the Annual Conference. I spoke about the tax consequences of separation and divorce as part of a panel dealing with the tax aspects of the family. I was incredibly nervous, but took some comfort from the fact that it was a concurrent session and most of the conference attendees would be more interested in the corporate and international panels. My heart sank when I saw Wolfe Goodman, one of the giants of the Canadian tax community, sitting in the first row.

I survived and Doug Sherbaniuk, the Director of the Foundation at that time, was sufficiently generous to invite me to talk about the taxation of inventory at the 1979 Annual Conference. But it was not until 1987, when I was part of a plenary session on tax avoidance and the recently proposed general anti-avoidance rule with David Ward and David Nathanson, that I thought that I had made it and was playing with the Big Boys. Sometime after, I realized that the only reason for my participation was to provide a target for the Big Boys – a role I have played many times since.

Credit for much of the success of the Foundation must be given to its string of energetic and astute directors. Over its 70 years the Foundation has had only 8 directors.

Doug Sherbaniuk was the first Director of the Foundation that I dealt with and although his record of achievement was intimidating, he was kind, friendly and supportive to me. Doug was the Director from 1967 until 1994 and I had many dealings with him over that time, which included working with him on a special committee on the budget process, getting approval for my first two books for the Foundation, and reviewing manuscripts. My friend Tom McDonnell succeeded Doug as Director and I became even more involved in the Foundation. Tom made me a Governor, which, for me, was a real honour, especially since, as far as I am aware, no academic had ever been a Governor. With Tom’s enthusiastic support, the Foundation’s relationship with the OECD began at this time with a joint conference on transfer pricing. (See Brian J. Arnold and Thomas E. McDonnell, “Report on the Invitational Conference on Transfer Pricing: The Allocation of Income and Expenses Among Countries” (1993) 41:5 Canadian Tax Journal 899-922.)

Robin MacKnight succeeded Tom as the Director of the Foundation (1996-2002) and launched some bold initiatives. One of Robin’s best moves was to appoint Neil Brooks as editor of the Canadian Tax Journal. This took courage because Neil’s left-leaning views did not endear him to many tax practitioners. As it turned out, Neil did a fabulous job and the Journal became an even better resource for both academics and practitioners.

In-between stints as a senior official with the Department of Finance, Steve Richardson followed Robin as Director from 2003-2007 and, in a difficult financial period, consolidated the efforts of the Foundation on its core activities. The current Director, Larry Chapman, took over in 2008. More about Larry later.

The Foundation has an impeccable international reputation for its objectivity, the high standards of its conferences and publications and its distinguished record of contributions to the development of the best possible tax system for Canada. In my view, one of the keys to the Foundation’s sustained success has been its independence. Given the two founding organizations – The Canadian Bar Association and the Canadian Institute of Chartered Accountants (now CPA Canada) – there was a risk that the Foundation could have turned into nothing more than an organization dedicated to furthering the narrow interests of tax professionals, as is the case in many countries. But the Foundation has resisted the temptation to lobby the government on behalf of its members and their clients, and it has made a conscious and consistent effort to present a wide range of different perspectives on issues.

Although it is not widely appreciated, the Foundation seldom makes representations to the Department of Finance or the Canada Revenue Agency. At times, I have questioned the Foundation’s reluctance to get directly involved in important issues of tax policy and administration because it could exert significant influence on the government. However, on balance the Foundation has been wise not to do so. With a membership in excess of 10,000, with different types of practices and perspectives, it would be difficult for the Foundation to speak for all of its members.

Occasionally, however, the Foundation has made representations to the government on important issues. In general, these submissions have been restricted to process issues that are fundamental for the efficient functioning of the tax system and do not reflect direct client interests. For example, the Foundation prepared submissions to the Minister of Finance on the budget process in the 1980s, and more recently, sponsored invitational conferences with government representatives on the process for the formulation of tax policy (see “The Process for Making Tax Policy: An International Comparison, Proceedings of a Round Table on the Tax Policy Process” (2013) vol. 61, no. 4 Canadian Tax Journal 989-1085) and on BEPS.

The Foundation’s publications are perhaps its most outstanding achievement. The Canadian Tax Journal is the preeminent tax periodical in Canada, not only for tax professionals, but also for tax academics (including academic economists), lawyers and accountants. The Journal has been able to establish and maintain a balance between theoretical articles and regular features for tax professionals on more technical topics.

The success of the Journal is attributable in no small part to Laurel Amalia, its editor from 1979-2002. Laurel managed to ensure that the Journal was issued on time (remember that until 2004 there were 6 issues annually) and that the quality of the articles was steadily improved. In the early years, some of the articles published in the Journal were essentially diatribes by practitioners about cases, legislation or administrative practices they didn’t like. Under Laurel’s watch, articles became subject to external review and rigorous editing. I had the good fortune to work closely with Laurel for many years reviewing papers for the Journal and writing the Current Tax Reading feature.

When Laurel retired, Neil Brooks of Osgoode Hall Law School took over as editor for 5 years. Neil continued the improvement of the Journal, adding the Policy Forum feature and introducing a blind review process for academic articles. He also wrote a fascinating history of the Journal and its contribution to the Canadian tax system to mark the 50th anniversary of the Journal (See Neil Brooks, “Canadian Tax Journal: The First Decade – 1953-1962” (2002) 50:1 Canadian Tax Journal 261-327; “… The Second Decade – 1963-1972” (2002) 50:2 Canadian Tax Journal 630-667; “… The Third Decade – 1973-1982” (2002) 50:3 Canadian Tax Journal 1056-1103; “… The Fourth Decade – 1983-1992” (2002) 50:4 Canadian Tax Journal 1378-1412; “… The Fifth Decade – 1993-2002” (2002) 50:5 Canadian Tax Journal 1668-78; and “The Canadian Tax Journal: Fifty years of Influence” (2002) 50:6 Canadian Tax Journal 2059-94.)

Although the Journal is the flagship publication, it is not the Foundation’s only publication. The conference reports, especially the Annual Conference Report, provide a wealth of technical tax analysis of current and fundamental tax issues. I continue to be amazed by the quality of the papers prepared for the Foundation’s conferences. Many of them are formidable works of scholarship. I don’t understand how busy practitioners find the time or the energy to produce work of such high quality; I’m just glad they continue to do so.

In addition, the Foundation has published a substantial portfolio of monographs over the years, including a few of my own. The Canadian Tax Paper series now consists of 112 books. Other books include such classics as Taxation of Private Corporations and Their Shareholders, 4th edition, and Tax Policy in Canada.

Two remarkable things about the Foundation’s publications. First, in my experience, the rigour of the editorial process for most of the Foundation’s publications is unparalleled. Most commercial publishers I have dealt with add little of value to the manuscripts they receive – they will publish almost anything. The Foundation insists on the external review of all books and Journal articles. These publications and the papers for the annual Conference Reports are rigorously edited, references are checked, and final versions are proofread. The process is humbling (and sometimes annoying) for any author, but the final product is significantly better. Every book I have written for the Foundation has been edited by Christine Purden, who has not only fixed my grammatical errors and improved the clarity of my writing, but has also saved me from making errors of substance. I owe her and the Foundation a lot.

Second, most of the Foundation’s publications – the Journal, the annual Conference Reports and the electronic periodicals Canadian Tax Highlights, Tax for the Owner-Manager, and Canadian Tax Focus – are provided free of charge to members. Modest charges are made for other publications. For this reason alone, membership in the Foundation is unquestionably the best deal in town.

I cannot end this tribute to the Canadian Tax Foundation without singing the praises of its current Director, Larry Chapman. Larry has done an amazing job, not just because he gave me my dream job – the Arnold Report – and has supported my research activities, but because he has guided the Foundation to even greater success during challenging financial times for professional firms. He has a good grasp of the bigger issues concerning the role of the Foundation and the Canadian tax system, and is acutely aware of the need to promote a diversity of views, even if he and most of the membership do not share those views. He has also worked cooperatively with other organizations, such as CPA Canada and the Canadian branch of IFA. He has built solid relationships with the Foundation’s counterparts in other countries and with the CRA, the Department of Finance and the OECD.

Larry has put together an outstanding team of people who have done a great job of enhancing the Foundation’s goals. Jane Meagher, the Regional Director, has reinvigorated the Quebec wing of the Foundation, which now offers a rich program of conferences, seminars, luncheon talks and other activities. Wayne Adams has developed an active and enthusiastic Young Practitioners program that will serve well as a base for developing the key players in the future success of the Foundation.

I have said it before, but it bears repeating: the opportunity to write the Arnold Report for the Foundation is something that I treasure. It is unquestionably the greatest professional compliment that I have ever received. The Canadian Tax Foundation is a joy to work for. It has high standards and lofty ambitions and takes them both seriously, and it treats people with respect. It recognizes that the tax professionals who speak at Foundation events and write for its publications don’t have to do so.

In conclusion, the Canadian Tax Foundation is a fine organization. It has made a significant contribution to the advancement of research and writing about tax issues and the education of tax professionals, and undoubtedly it will continue to do so. It is widely envied and admired by other countries. As an example, here is what Sir Ivor Richardson, former President of the New Zealand Court of Appeal, said in 1995 when the New Zealand Journal of Taxation Law and Policy was launched:
We have nothing to compare with the Canadian Tax Foundation which, through conference reports, the Canadian Tax Journal and its specifically commissioned publications, has helped shape the Canadian tax system for over 40 years.
But when I speak about the Foundation, I don’t want to lose sight of the fact that the Foundation is only as good the people who make it up – the staff, the directors, the conference speakers, the authors and the members. Having reached 70 years of age, I can look back with enormous fondness at the friends and colleagues I have met through the Foundation – some incredibly smart people, some deeply thoughtful people, some colourful characters. My life has been enriched by all of them through the Foundation.

Happy 70th anniversary and thank you to the good ship Canadian Tax Foundation and all who sail on her.


  • David Sherman 8/21/2015 3:41:14 AM +3

    Well said, Brian.

  • Marsha Wagner 8/28/2015 6:44:55 PM +1

    As a young practitioner, I found this piece to be particularly interesting. Thank you.

  • Thomas McDonnell 9/7/2015 11:15:15 AM +1

    Brian: I read your tribute to the Foundation with interest and real enjoyment; it brought back many memories. Allow me to add a few comments of my own on this remarkable organization.
    As you note, the Foundation was established by a joint effort of the Canadian Bar Association and the Canadian Institute of Chartered Accountants. This of itself was a notable achievement as the legal and accounting professions in other jurisdictions have not shown a similar willingness to cooperate on matters of taxation. While there is always some underlying question regarding the legitimate boundaries of practice when lawyers opine on accounting practice and accountants do so on taxation statutes, each profession has shown a willingness to recognize the contribution of the other and to avoid raising frivolous unauthorized practice complaints. I think the involvement of the two bodies in the work of the Foundation has been a significant factor in this regard and one that is not generally appreciated.
    I first got involved with the Foundation as a newly qualified lawyer in 1967. Two things in particular stick in my memory from those early years. The first was the importance we all attached to attending the Annual Conference. Perhaps it was just me who felt that way, and not he others, but I don't think so. Attending the AC was a big event and was a must attend for anyone serious about tax practice. I was fortunate enough over the years to belong to firms that supported this view and encouraged their tax associates to become members of the Foundation and attend the AC every year - which I faithfully did. The second memory is somewhat related to this. I still recall how much I hoped to be invited one day to deliver a paper at the conference!. I learned early on that the surest route to winning the invite was to write for the Journal. Doug Sherbaniuk made no secret of the fact that he looked for new speakers among those who had published papers in the Journal, and I quickly set about writing my first paper which was published in 1969. I'm not sure that firms today and their young tax practitioners share that same enthusiasm for attending conferences and writing papers. I'll say a bit more about this below.
    I served as a research associate at the Foundation in 1977-78, and as Executive Director in 1994-95. These gave me an insider's look at how the Foundation operates day-to-day. The calibre of the people who have worked for the Foundation has been outstanding. You mentioned the contribution Laurel Amalia made as Editor, and I can heartily second that, both from my time as Executive Director, and before then when she edited various stuff of mine the Foundation published. I would be remiss if I did not mention the help I received from one of Laurel's predecessors, Gwyneth McGregor. Gwyneth was Editor during the 1960s when I first started contributing articles. I owe her a lot for her help with those articles. Some of your older readers will remember her for Around the Courts which she wrote for every issue of the Journal. It was a masterful review of the tax case law and a tradition I was honoured to take on after she retired. The Foundation is justifiably proud of the literary quality of all its publications, due in no small part to a succession of devoted editors. Currently, Kathy Johnson is the Associate Editor and oversees the work of a group of free lance editors who are seldom recognized for their contributions. The Foundation would be a lesser organization without them, and I am happy to take this opportunity to acknowledge that fact.
    An aspect of the Foundation's work that is not sufficiently recognized is its work on issues of public finance. In this regard, the late David Perry was indispensible. As far as I remember, David spent all of his working life at the Foundation, as its in-house Senior Research Associate. He was certainly that, but as I learned as a new and very green Director, he was much more than that. David had a grasp of the broader issues of tax policy, informed by a basic decency and humanity, that I came to rely on during my tenure as Director. In his later years he became the public voice of the Foundation, in demand by the media for comments on budgets and the fiscal issues of the day. He always had something useful to add and he was a sounding board for me when I was asked to get publically involved in tax issues.
    Doug Sherbaniuk was Executive Director when I first became aware of the Foundation's work in the early 1960s. You referred to him as the Foundation's first Executive Director. I'm not sure if in fact he was. I have a foggy recollection that perhaps the first director was Ron Robertson. But there is no doubt that of all the directors preceding Larry, Doug's was the most significant contributor to the growth of the Foundation. He was passionate about the importance of research. The fact that the Foundation has one of the finest collections of tax materials in North America is due to him. Those of us who have taken advantage of the library and its very competent staff over the years know this. It is, perhaps, one of the lesser known assets available to the tax community.
    Tax practice has changed dramatically during the past 70 years. Perhaps nothing has affected practice more than the development of computerized data bases and the explosion of social media. We are in the midst of a revolution in the way we as tax practitioners do our work and it is difficult to see just where this is taking us. It is clear, though, that the availability of computerized data bases has its downside as well as its positive aspects. Before computers, most tax research involved a search for relevant case law by actually reading the reports of decided cases. Now, with the ability to pin point searches with key words, we tend to skip through the reports to the sentence or paragraph we think relevant to our issue. This saves time and is cost effective in the context of the specific research assignment. The downside is the fact that this limits the researcher's exposure to the broad range of case law and textual comment we used to read while looking for that sentence of paragraph. Over time, those of us who grew up in the tax practice this way developed a base of knowledge that is hard to duplicate today. I don't at all regret the convenience of the modern approach; it's hard to imagine going back to research in the old way. But like most things in tax, the new way of doing things turns out to have unintended consequences.
    I will close with an observation on what I think may be the biggest challenge now facing the Foundation. The Foundation is essentially a member supported organization. It receives minor amounts from non-members from time to time, but essentially it depends on membership fees, subscriptions and conference revenues to support its activities. I mentioned earlier how much those of us who started tax practice in the middle of the 1900s, and firms to which we belonged, revered membership in the Foundation. I'm not sure that the same enthusiasm exists today. If it doesn't, the work of the Foundation is at risk. It takes a lot of time to write a paper for the Journal, or for delivery at one of the Foundation's conferences. There is no direct reward for this beyond the recognition one gets from being published. In an age when billable hours have inordinate importance in professional firms, it may be difficult to persuade young professionals to devote time to these activities. With the expansion of electronic communication, it is no longer essential for all members of a tax group to become members of the Foundation in order to access the Foundation's materials. Some firms have cut back the number of their memberships as a consequence. Larry has taken important steps to deal with this. Wayne Adams has been give responsibility for developing programs for young practitioners, and Alan Macnaughton has taken on responsibility for Canadian tax Focus, a recent newsletter designed to encourage contributions from young practitioners. Both are important steps and I expect the Foundation will continue to adapt its work to take account of the way tax practice is evolving.
    I sincerely hope that members of both professions will see their continued support of the Foundation, through maintaining memberships, attending conferences, and writing papers, as important contributions to their chosen profession. Our tax system will be much the poorer if they don't. There is no organization in Canada that comes anywhere close to producing the quality of tax analysis and research that the Foundation does. With that said, I add my "happy birthday, CTF" to yours.

    Tom McDonnell

  • Cathie Brayley 9/10/2015 8:24:44 PM

    Thank you Brian and Tom for your very thoughtful pieces.