The state’s passivity towards Benoît Laliberté has cost Canadian taxpayers dearly. While he was in tax bankruptcy, his group Téliphone-Navigata-Westel allegedly failed to return 10.1 million to the public coffers, according to two court files traced The Press. Revenue Quebec prosecutors have brought serious tax charges against the businessman and are even trying to send him to prison.
The telecommunications companies controlled by Laliberté, active mainly in British Columbia and Montreal, should have collected these sums from the salaries of their employees, according to the tax authorities. They then had to remit them to income tax, the Quebec Pension Plan, the Parental Insurance Plan, employment insurance and other public funds.
For the Quebec funds, the shortfall is 1.6 million and the prosecutors of Revenu Québec are demanding a fine of 2 million. Before filing their charges, they obtained a search warrant at the offices of his group in Old Montreal in 2017.
In interview with The Press, the businessman assures that his trial does not worry him “not at all and in any way whatsoever”. But the procedures have been constantly delayed since February 2021, at the request of his lawyer, Maxime Bernatchez, for health reasons. According to the testimony of his doctor, he suffers from a “mood disorder with predominance of depression”.
Psychiatric assessment
Running out of patience, Revenu Québec obtained an order last April to have him assessed at the Philippe-Pinel National Institute of Forensic Psychiatry. Laliberté complied and underwent his examination. However, it is impossible to know the results, since the report has still not been filed in court.
In interview with The Pressthe businessman claims that his constant run-ins with the authorities have mortgaged his sanity.
I got a kick out of it over the years, it got in my way, so I fell into burnout.
Benoit Laliberte
Laliberté says he has been in depression “for a few years already”. “For a few months, I have been on a new medication, then I will get better. Obviously, I have energy problems. In the morning it can work, then at 3 a.m. I go to bed. So I still have mood issues. »
He says he is hopeful of being able to have his trial, postponed to 1er December at the Montreal courthouse.
“We continue to say that I am not responsible for anything that is alleged,” said Laliberté. Would it be the relentlessness like the one I’ve been facing for many years? Possibly. »
More than 40 million in lost debts
One of the five telecommunications companies that allegedly failed to remit source deductions to the government, 4237561 Canada Inc., went bankrupt as early as 2014. Revenu Québec and Revenu Canada lost more than 1.2 million.
Its other companies in the Téliphone-Navigata-Westel (TNW) group in turn became insolvent in 2016. Creditors claimed more than 40 million from them, but they too had to settle for zero.
Among them, Revenue Canada and the Victorian government claimed a total of 3.2 million, according to the list of creditors.
The tax agencies, however, are far from the only victims of the businesses Laliberté operated while he himself was in personal bankruptcy.
A Vancouver venture capital fund lost $11.9 million in the ruin of TNW, the document says. Telus and Bell had to erase a slate totaling 15.6 million. Laliberté attributed his group’s difficulties to the “dizzying increases” in their rates for retransmitting his signal.
Income transferred quietly
When he declared his companies insolvent, Laliberté tried to bankrupt the two main companies of the group. Not without having first transferred all their clients’ contracts – and therefore their income – to other companies, according to a report by controller Ernst & Young.
The court was not fooled. In April 2017, despite Laliberté’s opposition, the court forced the companies that held the contracts to be included in the insolvency proceedings. She placed them under the protection of the Companies Creditors Arrangement Act.
However, the controller was not at the end of his troubles. “The complex organizational structure used by the petitioner and its use of different entities made the task of tracing the ownership of the assets extremely difficult,” Ernst & Young mentions in its final report.
IMAGE FROM AN ERNST & YOUNG REPORT
This diagram produced as part of TNW’s insolvency proceedings shows the structure of the group, ultimately owned by the holding company Investel Capital Corporation in the British Virgin Islands and the JAAM Residence Trust.
The firm tried in vain to see clearly and to locate all the assets under the control of Laliberté. To do this, she had to navigate an organizational chart of more than a dozen companies registered in Ontario, Quebec, British Columbia, Saskatchewan, Alberta and Nevada.
The businesses that Laliberté controlled appealed on appeal challenging various aspects of the plan of arrangement. The businessman even tried his luck all the way to the Supreme Court of Canada, which refused to hear his case in November 2020.
“It is unfortunate that the cost and time required by this contentious procedure have reduced the sums recovered,” noted Ernst & Young in its final report before the British Columbia court.
In July 2017, Ernst & Young presented a plan to transfer the assets of the TNW Group to its competitor Distributel, of Ottawa. But in the end, the controller was only able to clear a measly 1.5 million. Not even enough to pay for insolvency proceedings, which cost three times as much.