Legal news and trends for Canadian in-house counsel and c-suite executives
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EDITOR'S BOX By Kelly Harris INHOUSE Group Publisher: Karen Lorimer Editorial Director Gail J. Cohen Editor: Kelly Harris Staff Writer: Glenn Kauth Copy Editor: Heather Gardiner Creative Director: Einar Rice Art Director: Bill Hunter Account Co-ordinators: Alice Chen & Catherine Giles Publications Mail Agreement #40766500 ISSN 0703-2129 Copyright © 2009 G.S.T. Registration #R121349799 Advertising Sales Representatives Legal Suppliers: Kimberlee Pascoe Tel: (905) 713-4342 E-mail: kpascoe@clbmedia.ca Law Firms: Karen Lorimer Tel: (905) 713-4339 E-mail: klorimer@clbmedia.ca Kathy Liotta Tel: (905) 713-4340 E-mail: kliotta@clbmedia.ca Sales Co-ordinator: Sandy Shutt Tel: (905) 713-4337 E-mail: sshutt@clbmedia.ca Canadian Lawyer Magazine Inc. President: Stuart J. Morrison Canadian Lawyer InHouse is published 6 times a year by Canadian Lawyer Magazine Inc., 240 Edward St., Aurora, Ont. L4G 3S9 (905) 841-6480 Fax: (905) 727-0017. E-mail: cleditor@clbmedia.ca Web: www.canadianlawyermag.com/inhouse All rights reserved. Contents may not be reprinted without written permission. The opinions expressed in articles are not necessarily those of the publisher. Information presented is compiled from sources believed to be accurate, however, the publisher assumes no responsi- bility for errors or omissions. Canadian Lawyer InHouse disclaims any warranty as to the accuracy, completeness or currency of the contents of this publication and disclaims all liability in respect of the results of any action taken or not taken in reliance upon information in this publication. To subscribe Call 1-888-743-3551 x4355 or e-mail kschulz-lacey@clbmedia.ca RETURN UNDELIVERABLE CANADIAN ADDRESS TO: CIRCULATION DEPARTMENT 240 EDWARD ST., AURORA, ON L4G 3S9 Indexed in the Canadian Periodical Index www.canadianlawyermag.com/inhouse Black liquor . . . pure gold substance is a by-product of turning wood into pulp. Those in the pulp and paper industry have used the substance as a biofuel to make cheap energy for running mills since the 1930s. Recently someone in the U.S., I A suspect a very bright in-house counsel, discovered a wonderful loophole in one of the few supposedly pro-envi- ronment pieces of legislation passed by the former Republican government. The Safe Accountable Flexible Efficient Transportation Equity Act — a Legacy for Users, created a tax credit to promote hybrid fuels mixing biofu- els with traditional fossil fuels. So the mills sought an opinion from the Internal Revenue Service on the use of black liquor combined with die- sel as hybrid fuel under the act. The IRS agreed the mixture qualified and as a result paper producers have been using the tax credit to boost their fail- ing industry. How big is the subsidy you ask? The first cheque was cut to International Paper Co. for $72 mil- lion. In government, as well as in life, there is something called the law of unintended consequences. Basically, a piece of legislation that does exactly the opposite of what it intends. They are all too common, but rarely have I seen a law of unintended benefit. Here we have a piece of legislation trying nyone involved in the pulp and paper industry has no doubt heard of black liquor. For those who haven't, the to promote cleaner business practices being usurped to prop up a failing industry. What is worse, the benefit is so huge mills are actually reopening south of the border just to get in on this tax windfall. The whole thing highlights a larger issue. As governments rush to draft new environmental legislation they must do so being mindful of existing practices. The objective of green laws must be sustainability and if all the laws do is reinforce old practices then they are pointless. The tax credit for transit riders in Canada for example, has that gone to increase ridership? Or has it simply given a tax break to people for something they already do? I guarantee you the proponents and opponents could provide statistics to sustain either argument. This is why the environmental movement gets bogged down at the point of regulation. Skepticism about whether the new rules will do anything to help, or simply reinforce old behav- iour. Will carbon taxes change people's minds, or just be a tax grab? Will tax breaks for transit riders create new ridership, or simply reward people who are already transit users? These are questions governments need to look at before changing the law or writing new ones. Clearly the unintended benefit of the awkwardly named SAFETEA-LU is something everyone, save for perhaps those employed by the U.S. forest industry, should hope to avoid. IH INHOUSE AUGUST 2009 • 3