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Microsoft Enticed To Move To British Columbia
Posted by
Hemos
on Fri Jun 02, 2000 07:06 AM
from the probably-not-going-to-happen dept.
from the probably-not-going-to-happen dept.
MartinB writes "The BBC is reporting that British Columbia have offered MS a home 100 miles away in Canada. 100 miles of geography, a million miles of juristiction. If MS are in Canada, the US legal system can't touch 'em. Or can they? " Well, I suppose they could move - but that wouldn't totally forestall US Legal Moves, because they'd be forced to maintain a US subsidiary. In addition to not really escaping the DOJ, there's the tax and issues of getting 20,000 people to move.
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Canada Tries to Entice Microsoft to British Columbia
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Re:Canadian conflict and crud. (Score:3)
BZAPP!!! Wrong answer.
The city of OKA allowed the construction of the golf course over the ancient burial ground; a blockade ensued for a few weeks, when the Sûreté du Québec [gouv.qc.ca] (police) was called to dismantle it. In the ensuing mêlée, an officer was killed.
(By the way, Oka is the algonquin name; mohawks call it Kahnesatake. Once mohawks settled there, they gradually drove out the algonquins and hurons who lived there elsewhere).
The land in dispute around Oka is not, and never has been an indian reserve, as it is commonly assumed, and this explains the involvement of the Sûreté du Québec [gouv.qc.ca] rather than the Royal Canadian Mounted Police [www.rcmp.ca] (federal) normally used in case of indian revolts (such as the Kahnawake revolt in 1956 against the construction of the Saint-Lawrence Seaway [seaway.ca] - Oddly enough, the picture on the website is taken at Kahnawake; the bridge is the Mercier bridge, which was blockaded in 1990). As a matter of fact, the federal government department of indian affairs [inac.gc.ca] has been purposely been dragging it's feet in this matter, the more so because it helps tarnishing the image of Québec towards the world.
In Canada, indian affairs are a federal jurisdiction, so to better control them and use it against the french who want more control over their lifes. But in the OKA case, the land where mohawks have been living never had the status of reserve. In fact, that land was donated by a french religious (whose name escapes me) order to american mohawks that were fleeing the genocide perpetrated against the mohawk nation in upstate new-york, in the early 1800's, even though the mohawks/iroquois were the ennemies of the french (well, that was when they were useful to the english at war against the french - but when they were no longer useful, after the american Revolution, they were simply exterminated and driven out).
Other mohawks settled in Kahnawake [kahnawake.com] , immediately south of Montréal (the site is worth visiting, being written in mohawk - see below).
It is interesting to note that while in Québec, the weeks-long blockade had almost totally cut the road to some important suburbs of Montréal and thus inconvenienced untold thousands of commuters (to the point that an emergency commuter train service had to be implemented), not a single mohawk has been killed by police nor army, whilst a little band of indians in Ontario blocking a little backroad saw one of theirs shot dead by police after only a few days of obstruction. This clearly shows the inherent racism of the english and the high tolerance of the french. In fact, in Québec, 20% of the carceral population is indian, whilst in the rest of Canada, it is 80%.
There is no rush, it is inevitable; history clearly shows that a people's desire for sovereignty (it is not separation nor separatism, we've always been a separate nation) cannot be suppressed indefinitely.
The purpose of bill 101 [gouv.qc.ca] is to protect the existence of the french language in Québec against the onslaught of neighbouring english. The most visible effects have been the prohibition of english commercial signs, and the impossibility for immigrants to go to english schools.
The main idea there is to drive home the point that one cannot expect to live in Québec without knowing french.
Even though more than 80% of the population of Québec is french, immigrants have systematically assimilated themselves into the english community, since the immigration is a federal jurisdiction (the federal govenrment still does not inform immigrants that Québec is primarly french, and encourages them to speak english), and for the last quarter millenium (th e french first came to settle in 1604 [britannica.com], thus beating the Mayf lower [britannica.com]), the english have been labouring hard to make the french disappear from Canada (in 1760, at the time of the conquest, the french were 90% of the population; in 1867, at the time of the confederation, the french were 50% of the population; nowadays, the french are only 24% of the population). Ethnic cleansing in Canada has been quite successful: large segments of french population outside of Québec have been almost totally eliminated. In the 1880's, a whole french province, Manitoba, was forcibly repressed and turned into an english province. Ontario outlawed the teaching of french language in schools back in 1912. And, as recently as 1977, airlines pilots were susceptible to jail terms if they spoke french during the performance of their duties.
The expression "tongue troopers" is a bogeyman of the english media. The office de la langue française [gouv.qc.ca] do not hire inspectors to report violations, but rather relies on the public to file complaints, which are then investigated by inspectors.
Another less known (and much less publicized, it would definitely shatter the negative image of Québec the federal government has consistently been trying to portray) effect of bill 101 is the protection it extends to native languages. This is why the Kahnawake [kahnawake.com] website is in mohawk language: Québec has the highest proportion of native speaking their native language (over 80%) whereas in Canada, only the older generations speak the native languages, as the young have been mercilessly taught in schools that viciously suppressed any use of the native language.
Bill 101 is a very mild instrument whose purpose is to undo centuries of extremely harsh treatment.
Of course. This is the typical cluelessness that can be expected out of the english in Canada towards the french. And they wonder why the french want to go out...
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Here's my mirror [respublica.fr]
Re:Yeah, right! (Score:5)
The provincial tax brackets for BC are:
$0 to $30,004 8.4%
$30,004.01 to $60,009 12.4%
Over $60,009 14.35%
Federal tax is:
$0 to $29,590 17%
$29,590 to $59,180 26%
Over $59,180 29%
Thus the absolute maximum income tax you will pay is 43.35%. And you're only paying this if you are a complete fool. There are a million ways to get tax deductions, most Canadians pay a fraction of this amount. In addition, you can put money into RRSP's thus deferring paying tax on them until, for example, retirement at which point you are earning a reduced income so can probably make a smaller tax bracket.
I've lived in California and Ontario, Canada. The standard of living is higher here, despite constantly hearing from my US friends about how bad our taxes are.
Obasan
If a tree falls in the forest, and kills a mime, does anyone care?
Stupid move. (Score:4)
On the other hand, if Microsoft where to stay, even the worst of the proposed penalties actually wouldn't be all that hard on the share holder (despite MS's assertions to the contrary). In any case, when I guestimate the incremental costs between moving or staying (and facing breakup), I'd have to stay. I suspect most share holders would realize this too; Microsoft's board would be begging for a shareholder lawsuit. Even if Bill Gates may want to stick it to the US, or even if MS may try to use it to put pressure on the DoJ, I just don't see it happening.
My only real concern is Microsoft using this with some sucess to pressure the government to backoff.
The issues (Score:3)
It wouldn't get them beyond the US legal system, unless they stopped selling their products in the US.
And how many of those 20,000+ employees are on H1B Visas? They can't move to Canada.
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Oh, my, the traffic... (Score:5)
Notably including the cost of real estate. Perhaps not quite as bad as Silly Valley, but real estate prices got bid up by folks from Hong Kong that were concerned about having a haven from the Communists.
Decent locations to work tend to be in the downtown, and access is controlled by about half a dozen bridges. Not exactly a good thing for commute times.
Throw an extra 20,000 people into the mix, and you'll see the traffic get worse, as well as watching a nice real estate price "bump" up, as something around $10B gets spent on real estate.
The choices are limited; MSFT would need a full-service airport nearby, which, in BC, forces them to try to stay near Richmond.
And remember, Gates loses, in such a move, his massive advantage, namely a state legal system that he apparently understands quite intimately as a result of growing up in a "legally oriented" family. BC law is not the same as Washington law, and that is likely to prove to be a jarring problem.
Of course, that provides another cost issue; MSFT would incur the costs of creating a sizable new "law stable" to deal with the local regulations.
Most entertainingly, this comes along with the demerit that a bunch of the former MSFT lawyers get discarded due to not being "Canadian-law-compliant."
Those lawyers are going to be none too happy about the change, and remember, they're lawyers. They're likely to sue Microsoft for whatever they can, and mutter things about "wrongful dismissal."
Re:It Wouldn't Make A Difference.... (Score:3)
Don't mess with me or I'll take my ball home to BC and see what that does to your economy...
Re:Stupid move. (Score:3)
Canada's corporate taxes are among the lowest in the G7. The income tax rates are harder to compare because there are different loopholes, benefits, etc. associated with either country.
M$ in Space? (Score:4)
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www.chowda.net [chowda.net]
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Freudian slip? (Score:3)
Home of the Dark Lord?
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Have Exchange users? Want to run Linux? Can't afford OpenMail?
M$ moving to canada... (Score:3)
Blame Canada! (Score:3)
Seriously, do they actually have to move the entire HQ, or do they just have to set up a satellite office, call it "M$ HQ" and be done with it?
Second question: if they still sell products in the US, does this get them out of the settlement?
Third, does the US gov't still buy from them since they are in a foreign country? I believe there are still laws that for military purposes at least, preference is given to US suppliers. Could be good for Apple, RedHat, etc?
Re:A Relevant Analysis of Taxation (Score:3)
Umm, YES, we DO. If you're talking about rural areas, or smalls cities like Edmonton or Halifax, then perhaps the population is relatively homogenous. But Toronto, where I live, is the most ethnically diverse city in the world (source: UN). I believe the number of minorities in this area actually exceeds the number of whites now, and if you go out in public here, you certainly won't feel like you're in the majority if you're white. I have lived in the States, and there is MUCH less diversity there. You have your inner city neighborhoods where everyone is black or latino, and your suburbs where almost everyone is white, and that's the extent of it. Vancouver is almost as diverse as Toronto, and places like Montreal and Ottawa also have significant minority populations.
Not surprisingly, in those areas, you are starting to experience some of the same problems as we do in our cities here.
Wrong. In Toronto, as the diversity of the population has been increasing, the rate of violent crime has been DECREASING. If you walk down a street anywhere here, you will see people from all walks of life, living in harmony. In the US, crime and racism are rampant, you have slums and ghettos and places where it's simply not safe to go. In Toronto, there are a few poorer neighborhoods with higher crime rates but it's never bad enough that I don't feel safe walking down the street.
The UN consistently rates Canada as one of the most livable countries in the world, and we ALWAYS come out ahead of the US as far as they are concerned. What you completely fail to realize is that because of the large size of our country and small population, a more social government only makes sense. In the US, it's everyone for himself, and all about greed. That is not the culture in Canada. There are other countries like Sweden, Finland, France, etc. that tax just as heavily as Canada, if not moreso, and maintain VERY high standards of living. You don't see anyone in France working 80 hour weeks like is common in the US. The literacy stats in these countries are higher than in the US, and in general the people are better educated and more enlightened. To me, these things are much more important than making a lot of money while living a shallow life, which is what most Americans strive for.
Haiku (Score:3)
Microsoft: "What, me worry?"
Canada: "Move here!"
Re:M$ in Space? (Score:5)
Re:Lawyer: too little, too late (Score:5)
IAAL also, and ditto on the disclaimer.
Hawk is right. Such a tactic would have no effect on the proposed split, contrary to the majority view expressed here by non-lawyers.
BTW, IMO, Hawk should be moderated up, so that all the non-lawyers who are speculating here can see his points.
Furthermore, even if MS left the US, this would not get them out of future trouble. Foreign companies that do a sufficient amount of business in the United States are subject to the laws of the United States and the jurisdiction of its courts. "Sufficient" is a wriggly lawyer term, but one that MS probably couldn't escape from. (BTW, this principle holds true in most countries of the world -- the concept is that if you avail yourself of the benefits of the laws of a jurisdiction by participating in activities there, you are also subject to its rules -- a pretty fair concept, on its face).
The question then becomes how such a court enforces its judgment on extra-nationals. Many of you seem to think that court orders could only affect MS product shipped into the US. Wrong! The powers of a U.S. federal court are vast, particularly if MS were to engage in criminal contempt of court by ignoring the judgment.
Do you know why indicted/convicted drug kingpins (and in the assumed scenario, MS would be little better in the eyes of US law enforcement) don't openly live in Canada and don't openly conduct their business in the U.S.? Because (1) the Canadians have treaty obligations, if not the desire, to cooperate with the USG in bringing lawbreakers to U.S. justice, including through extradition and the like, and (2) the USG has large resources devoted to tracking any "laundered" legitimate business activity they carry out in this country (and globally) and then freezing or seizing the assets involved.
MS would have a hard time operating without access to its bank accounts (and note that even the Swiss cooperate in matters like this - they only won't help other governments when the allegations are tax evasion). A company like MS must have access to the international banking system to do business -- they would have a hard time indeed if they had to rely on the Caymans to the point where they could only pay and accept money from other people with Caymans accounts.
Believe me, the USG doesn't tolerate public displays of disobediance to its laws. The more public and egregious the disobediance, the harder the government will come down on you. Often disproportionately and often to public approval (forex, witness the defiance of Elain's Miami relatives, and the subsequent force used to bring them to heel). For whatever historical reason, the U.S. federal judicary (though often not the political branches) commands an almost mystical respect from the American people. Any number of popular (at least at some level) causes have lost considerable credibility with the masses after a decision was made to defy the law, as interpreted by the courts (e.g., Elian, desegregation resistance, and to a lesser extent right-to-lifers).
MS and the DoJ both know this, and know that the full force of the U.S. government will be used to enforce whatever the final ruling turns out to be. That is why neither one of them is likely to be giving this British Columbia scheme even as much though as I just have.
Re:Yeah, right! (Score:4)
Add in the "federal surtax" and the "federal high income surtax", and remember that you pay provincial income taxes on both of those taxes. There are also provincial surtaxes for people deemed "rich".
There are also tax deductions in the US. I don't think Canadians can deduct the interest on their mortgages! And 401(k)s can get employer matching contributions, tax-free to the employee. RRSPs can't. (And your 401(k) assets can be invested anywhere on the plnaet. 80% of your RRSP assets have to be invested in the Canadian markets, which have historically underperformed US markets.)
Finally, with the Canadian dollar at about two-thirds of the American dollar, that "maximum income tax" bracket is reached at about $40,000 US. That's right, you're considered "really disgustingly filthy rich so you can have the hell taxed out of you" in Canada at the whopping sum of $US 40K. Sheesh.
In fairness to the original poster, the standard of living is probably comparable on both sides of the border - the cost of living is much lower in Canada, you don't need private school if you've got kids, and your (and your kids') medical coverage is "free" (in that you've paid for it with the taxes). That's a big equalizer.
But to say that the maximum tax rate in BC is 43% is just nuts. You want low (relative to Canada) taxes, try Alberta or Ontario. You'll roughly match California's tax structure -- but if we're talking about MSFT employees, WA has *no* state income tax, IIRC. On the income tax side, no jurisdiction in Canada comes close to that.
There's a whole lotta Canadian tax calculators at the Canadian sites for KPMG [www.kpmg.ca] and Ernst & Young [eycan.com].
A Revelation (Score:3)
Re:The effect this would have... (Score:3)
Although, if they did... I can see at least one of two things that could happen:
One, Microsoft would be forced to make some concessions on its product for it to be imported into America. The DOJ would get some of what they want in this case.
Two, the US government reverse engineers Windows themselves, rewrites it to their satisfaction and creates a competing product. Oops... reverse engineering isn't allowed under the DMCA. Oh well... just dissolve that act and let's get on with our lives.
Further, if MS were to move into British Columbia, it would do wonders for Western Canada's bottomed-out economy. (This is why, I believe, that the BC provincial government is willing to offer funding to that end. They can see that it will do them more good than it will cost them.) It wouldn't really hurt American cities like Blaine or Bellingham that much either.
So you see... it isn't all that bad.
News: CNN reports MS says it's not moving (Score:3)
Re:A Relevant Analysis of Taxation (Score:3)
Been watching too much TV again, eh?
The fact is that violent crime has been steadily dropping in the US for about 10 years. New York City, while having a bit of an upswing this year, has had its murder rate decline to the level it was at in the 1960's.
As for racism in the US, it's also decreasing. Compared to 30 years ago, it's like a whole new country. And it's not like Canada hasn't had cultural/race problems, too. Didn't a bunch of Canadian Indians (Iraquois? Mohawk?) stage a revolt with semi-automatic weapons a few years ago? And what about the reasons why Quebec has wanted to bolt from Canada? How many English-speaking people bolted from the provence? It might not be over the color of skin, but it's still based on bigotry and discrimination.
-jon
The effect this would have... (Score:5)
The US would then be limited to imposing restrictions on MS products imported to the US. I imagine this is exactly the approach the EU will adopt if they decide that MS has broken EU antitrust laws and that the US remedies do not address the issues.
I guess the US could also impose arbitrary large monetary fines on any wholly owned US subsidiary, forcing MS to either bow to US decisions or spin off the subsidiary as a separate company.
Re:The effect this would have... (Score:3)
So replacing Windows with a government issued "United States Federal Operating System" is a good thing?
That's what worries me most about this MS case. All the rhetoric comparing Microsoft/Bill Gates to the Borg/Satan/Hitler is causing folks to lose touch with reality.
It Wouldn't Make A Difference.... (Score:5)
British Columbia should investigate antitrust law before making such suggestions to MSFT.
telecommute (Score:3)
Re:Damn them! (Score:3)
Yes, and I remember a particular favorite scene of mine:
"You told us Windows 98 would be faster, with better access to the Internet"
"It is faster, over 100 times..."
*BANG*
Finkployd
I brought this up months ago (Score:3)
They don't REALLY have to move, and the can screw over the DOJ. Microsoft Says "OK, We'll Split, into a BUNCH of companies" Here's one breakdown:
1)Microsoft Holdings, somewhere down in the Islands). This company does 2 or 3 things a)Owns the other companies, b)Owns all the copyrights to existing software. Also one HECK of a tax haven, and when your worth more (a LOT more) than the government, you can write your own rules
2)Microsoft Development, Redmond WA
Develops software on a "For Hire" basis - Takes some outside work to make things interesting. All the developers work for them (we don't need to move people)
3)Microsoft Sales and Marketing (wherever in the USA). Sales and promotion of Microsoft Products
4)Microsoft Fulfillment, BC - Produces and ships the products - With NAFTA or the various Island "Special Development Zone" rules, getting free "unhindered" access to the US market is part of international treaty
5)Microsoft Consulting (Say, NYC with offices nationwide) - Does what Microsoft Consulting does today
6...x All the little companies - Publishing etc
OK, Lets say that the US government says "You have to break development in two" Fine, do it, The Holding company (which is NEW, say we form it tomorrow) owns both, and the development companies don't own any copyrights, the holding company owns it.
The really valuable parts of Microsoft are it's IP, and it's developers. We move the IP off shore, and hire the developers via holding companies. IP is easy to move
BTW What does this do to the economy of the US?... All those profits go off shore, to a tax haven
I looked into doing this with my one man band consulting company I had - It's do-able
Lawyer: too little, too late (Score:5)
This wouldn't stop the split. The U.S. court has already rendered judgment, and has jurisdiction. Assuming that the split stands on appeal (and the odds are strongly in the DOJ's favor), the two pieces could move.
Plain and simply, the court can block the move until the split is complete. Contempt power is an amazing thing--every executive can be jailed, fined $1M/day, etc.
It might help MS with future problems, but not the current mess.
Unfortneately, I can't reply to replies, as it's moving day and I won't see a computer again until Tuesday . . .