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Conservative Leader Stephen Harper condemned Prime Minister Paul Martin again this week for arranging the affairs of the shipping company he once controlled to avoid paying some Canadian taxes. Mr. Martin was clearly affronted, calling the accusation a foul shot at a reputable firm and not based on the facts. But was it?

It is a matter of record that CSL International, a subsidiary of the private CSL Group Inc., was once registered in the West African country of Liberia, better known for its violence and corruption than its shipping expertise, and that this registration has since been transferred to Barbados, a Caribbean tax haven. Mr. Martin owned CSL Group when these decisions were made. It was in a blind trust for part of the time. His sons now own the company.

It is also a matter of public record that some CSL International ships flew the Liberian flag of convenience, even after the company had changed its registered office to Barbados.

This common practice allows owners to register ships in countries offering low tax rates, lax labour laws or minimal health and safety standards. It is strongly opposed by the International Transport Workers' Federation. Liberia, which was in chaos for much of the 1990s, was incapable of adequately policing international vessels to ensure that they met acceptable standards.

In his attacks, Mr. Harper has focused on the first of these points -- tax avoidance. He has alluded to the second point by mentioning flags of convenience, but has not gone further.

He should.

At the time that CSL International was paying Liberian registry fees, alarm bells were ringing at the United Nations about where this money was going. The world body sent in a team of experts who reported publicly that then Liberian president Charles Taylor was siphoning registry funds for his own uses, which included fomenting a war in neighbouring Sierra Leone and brutally suppressing his own people.

But Mr. Harper has not made that an issue, so Mr. Martin has not had to respond.

The Prime Minister has responded to Mr. Harper's tax accusation by saying that CSL Group has more ships operating on the Great Lakes, flying the Canadian flag and paying Canadian taxes, than it has operating abroad.

This is a weak argument. The fact that Canada Steamship Lines is a reputable company that contributes to the Canadian economy is not in dispute. It is the international activities of CSL Group that are in question.

The Prime Minister could say in his own defence that tax avoidance is perfectly legal. Corporations do it as a matter of course. Competition for cargo is stiff, and they feel they must keep their costs as low as possible.

But this would not be a winning argument with most voters who, unlike corporations, cannot choose where they pay tax. When considering an activity, corporations ask themselves: Is this legal? Voters are more likely to go at least one step further and ask: Is this fair?

The problem is that corporations have gone global while tax laws have remained national. Voters are firmly caught in the tax net. Corporations are not. They can legally shop the globe for countries that offer the lowest tax rates, the lowest labour costs, the cheapest materials and the lowest standards. It makes perfect sense from the corporate point of view, but not from the point of view of the ordinary worker.

It will be interesting to see whether Mr. Harper will do anything about the tax question if he wins office on Jan. 23.

Will he follow the lead set by the United States, which is now making it more difficult for U.S. corporations to shelter income offshore? Will he negotiate with other governments to close some international loopholes?

Or was taking on Mr. Martin over his former company's offshore activities just an election ploy?

Madelaine Drohan, an economics writer based in Ottawa, is the author of Making a Killing: How and Why Corporations Use Armed Force to Do Business.

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