I’m not a stranger to mental illness, or the additional hardship caused by its stigmatization. So on the surface, I really like the message behind Bell’s “Let’s Talk” campaign. It’s a platform for important messages about mental health, and also a source of serious funding for good things. But when I get Facebook messages telling me to watch a video to trigger Bell’s generosity, I feel resentment for the campaign. There’s a structural problem here.
BCE Inc. is the holding company for Bell Canada, and, like most of Canada’s biggest corporations, it manages to pay far less than the official corporate tax rate. From 2011-2016, they made $21.9B in profit and paid only $2.9B in tax, using loopholes to hang on to $3B that, in theory, they owed to the public. That’s a yearly average of $500M in avoided taxes. But this year, after their video got 145,442,699 views, they donated $7.2M to mental health initiatives.
Of course, that’s a bit of apples to oranges: had BCE paid that remaining $500M in taxes, how much would have gone to mental health initiatives? More than $7.2M?
Well, that depends on how you look at mental health. Many of the public services funded by taxation are crucial supports for the mentally ill, and for preventing mental illness in the first place, even if that isn’t their primary purpose. How many high school students just starting to grapple with an emerging mental illness would do better in a smaller class with more individual attention? How many families with a mentally ill member would have an easier time if public insurance covered prescription drugs the same as hospital care? How many people with treatable addiction and mental illness slip into street life and therefore get worse, who could have gotten back on their feet if we expanded our shelter systems and public housing programs?
Talking about mental health is crucial; removing the stigma is crucial. But public services are also crucial, and it’s there that Bell has a conflict of interest. Public services depend on taxes that Bell doesn’t want to pay. In fact, as a publicly traded company, there’s a sense in which Bell isn’t allowed to pay any tax they can possibly avoid paying — that would be a dereliction of duty to their shareholders. And the biggest shareholders have a serious incentive to lobby the government not to close tax loopholes, and not to raise the corporate tax rate back to anywhere near where it was in the 80s.
Accordingly, one can imagine that BCE’s executives and major shareholders see $7.2M as a reasonable slice of Bell’s 2019 advertising budget. At CAD $0.05 per view, the Let’s Talk video campaign cost far less than a YouTube ad (USD $0.10 - $0.30 per view), and the money went to good causes. But just as Bell “isn’t allowed not to avoid taxes,” they also aren’t allowed to spend more on the public good than can be justified from a charitable, public-relations perspective.
I don’t want to single out Bell for tax dodging: it’s the norm for most of Canada’s big corporations — particularly our banks — all constrained by their fiduciary duty to shareholders. Corporate tax dodging arises from systemic flaws that only legislation can address. Nor do I want to diminish the accomplishments of the people at Bell behind “Let’s Talk.” As I began by saying, the campaign is both saying and doing good things.
It’s not the campaign’s text that I object to, but its subtext: It positions Bell as a leader in mental health initiatives. It says that Bell gives back to society more than it takes. It might even make it look like corporate citizenship can solve our big problems. These are fairy tales, and believing them will make us less likely to really solve those big problems.
It’s great that Bell donated $7.2M to mental health initiatives, even if they used the occasion for publicity and made their donation contingent on the number of eyeballs looking at a video containing their logo. But Ontario, just for example, spends tens of billions per year on education, children’s and social services, and health care. These broad categories aren’t specific to mental health, because I have limited time to research this. But I’m willing to bet that a lot of that money directly addresses mental health, and much of the rest funds services that are crucial to preventing mental illness, such as aspects of education and social services. Government is the leader on mental health initiatives, with the for-profit sector far behind. And this is exactly what you’d expect, given that Bell is accountable to its shareholders while government is accountable to voters. It doesn’t make Bell bad. The only bad thing would be getting confused about this.
Furthermore, Bell does not give back to society more than it takes. Setting the corporate tax rate is the government’s way of saying to profitable businesses, “Given what it’s cost to create a good society in which businesses like you can grow, this is how much we’ll be needing back to make the cycle sustainable for future generations.” In other words, by running a business you are taking what society has to offer: healthy, educated people willing to work for you, low crime rates, public transit. If you don’t pay your taxes in full, then by definition, you’re giving back less than you took.
But again, what do we expect? Bell isn’t a charity. That’s why corporate citizenship can only go so far. Shareholders and executives want to feel good about their place in the community, but they don’t want it badly enough to pay their taxes in full. Our tax code has loopholes and they’re going to get used. We have to fix them, and that will be very expensive for companies like Bell, and they will get very upset, but don’t worry. They can afford it. We just can’t afford to get confused about the big picture.
Further reading from previous years
Montreal Gazette: Jason Madger entertains cynicism, but ultimately sees no real problem with “Let’s Talk.”
Now Toronto: Danielle Landry comes down hard on the campaign’s failings and corporate hypocrisy.
The Globe and Mail: factual reporting from Steve Ladurantaye & Susan Krashinsky points out that the cost of the campaign for Bell includes not just the donation, but also lots of other traditional advertising media buys (not to mention paying the people working on it), which I failed to mention.
The Globe piece also includes a quotation from “Let’s Talk” chair Mary Deacon speaking with surprising candour about Bell’s interest in the campaign as a marketing/branding initiative: “We picked a cause that builds awareness and credibility around the brand in a very authentic way. … [I]t’s also helped people see Bell in a different, more positive light and made them think about giving Bell a second chance.” (Cf. a more recent Globe editorial, Welcome to the new politics, where the messaging is the message.) However, Deacon also mentions that two of her brothers died by suicide, so it’s hard to question her motivation.
See also the Toronto Star’s excellent High Cost of Low Corporate Taxes, from which I pulled a bunch of numbers.