When U.S. fast food franchise Burger King announced its intention on August 26 to take over the iconic Canadian coffee franchise Tim Hortons – in part to allegedly take advantage of Canada’s stature as a tax haven – the timing coincided perfectly with the launch of Harold Crooks’ doc The Price We Pay, which examines the global impact of offshore tax havens.

“The subject matter was a moving target,” Crooks told realscreen this week, following his film’s TIFF world premiere, “because ever since the financial crisis of 2008, there’s been a growing public awareness of the issue of tax havens, the question of the downsizing of public finances, and increasing austerity. So my concern was that when the film came out, that it be absolutely relevant to the moment.

“I had to keep my eye on so many issues: whether U.S. Congress or the British parliament, the new French president or Ireland would deal with the rising public pressure over these issues, over tax havens, about corporate tax avoidance – and wondering if there was going to be some legislation or some big breakthrough in the change of international tax rules that would date the film.

“What happened was really quite the opposite,” he adds. “We couldn’t have predicted that at the very moment the film came out, that tax inversions would be front page – Burger King and Tim Hortons and Apple – so the timing of it turned out to be a stroke of great fortune for the timing of our film.”

Produced by Nathalie Barton and InformAction Films with the collaboration of Ici Radio-Canada and Filmoption International, The Price We Pay offers a 90-minute look at corporate tax avoidance through the creation of offshore havens, and how many tech giants of the “cloud” economy seem to be eroding the very foundation of democracy.

And while there’s a lingering public perception regarding the location of such havens (i.e. Swiss bank accounts, the Bahamas), Crooks’ film reveals a different truth.

“What the film actually shows is that tax havens are in fact illegal and accounting fiction,” he explains. “There’s actually nothing there. The Caymans could disappear under the ocean, and it would still be the fourth largest financial center on the planet. It’s a bookkeeping thing  – the money is really in London or New York or Zurich or Paris or wherever.”

As co-director and writer of 2011’s Surviving Progress, a film about the ecological sustainability of global civilization; and co-writer of the narration for the 2003 Sundance award-winning doc The Corporation, Crooks said he was first approached by Barton following a Montreal film seminar almost three years ago.

The provisional title Barton gave him was The Hidden Face of Taxation, but Crooks said once he understood the bigger issue of what the film was concentrating on, he decided to go for The Price We Pay.

“When I understood that what taxation is, is really a lens through which to understand power and how it’s distributed in society – who has the power, who doesn’t, and whether the regular person has a hope in hell of getting ahead – then I was hooked,” Crooks explained.

“You go right back to the French Revolution, the relationship between the nobility not paying taxes and the commoners bearing the entire burden of taxation in society and, well, the story hasn’t changed. In fact, we’re sort of coming full circle, where the nobility of the 21st century, whether they’re global corporations or they’re the super wealthy, no longer pay taxes.”

Crooks, whose educational background includes studying at the Delhi School of Economics, India, interviewed 25 noted economic and financial authorities for his film, including Quebec tax expert and author Brigitte Alepin, whose 2010 book, La Crise fiscale qui vient, directly inspired The Price We Pay.

“Brigitte, her concerns had to do with the question of the sustainability, or not, of public finances that were being eaten away by what she calls ‘fiscal termites,'” said Crooks. “She was coming at it with a concern of the sustainability of public finances, and I was coming off a film that was concerned about the sustainability of the global status quo. So where we met was in the offshoring of the world’s wealth, which is the story that is told in the film.

“And the off-shoring of the world’s wealth is basically, and this is the story of the film, a threat to social innovations of the 20th Century – the middle class and the welfare state and, to some extent, what you might think of as democracy itself.”

Crooks says the offshore haven problem has impacted domestic, medium and small enterprises to the point where “they’re at a competitive disadvantage with global corporations.”

He explains that corporations have figured out how to game the international tax rules to such a degree that French economist Thomas Piketty, who is interviewed in The Price We Pay, predicts the demise of corporate income tax could occur within the next 10 to 20 years.

What motivates you to take on a project?

The thing that has to be in place is the sense that, by the time the film’s finished, it will be of huge interest to a large number of people; that it’s very, very relevant to the question of the big picture. I’m always interested in the big picture of things – democracy, sustainable society, you know, regular people living in a viable world.

Once you decided to make the film, why use weather systems as a metaphor?

The film has a kind of a pedagogical or teaching dimension to it, but from the get-go, as in the case of Surviving Progress – and I worked with the same brilliant editor, Louis-Martin Paradis from Montreal, on this film – we wanted this to be a cinematic experience. So the clouds, the hurricanes and the weather are metaphors for the cloud economy.

We show the ability to move money into a virtual space and the ability to move intellectual property into a virtual space where you’re dealing with cloud money and the cloud economy with cloud servers that can be easily moved across frontiers and borders. So clouds themselves, the hurricanes and the Caymans became a visual motif, combined with this amazing music from Montreal composer Ramachandra Borcar, which allowed us to create a compelling visual cinematic experience for people. That was very much a part of the design of the project.

What did you refrain from including in The Price We Pay?

One of the problems that the film addresses is the collapse of progressive taxation; the collapse of tax fairness. The question is, where did that come from in the first place?

What I learned in the making of the film is that progressive taxation was born during the First World War. It wasn’t born out of the expansion of the vote to the massive society, or out of left wing or social or political parties: it was born out of a social crisis of huge scale: it was the first industrial-scale war.

The slaughter of men on all sides was so huge that there arose a kind of political movement from all the countries in the Western world – Canada, the U.S., the UK, France, Australia – to impose through taxation, a conscription of wealth. So by the end of the First World War, you had very, very high levels of taxation on what we now call the 1%, and because of the expense and the losses, those taxes and tax rates remained in place. They became the basis for the development of the welfare state in all these countries.

So right through the Second World War, up to the Reagan/Thatcher era, taxation was very progressive and the wealthy had to bear a very significant proportion of the tax burden of society. That began to collapse, and combined with the off-shoring of wealth and the conservative  Reagan and Thatcher revolutions, the whole thing began to unravel, which leads us to the emergency that the film addresses.

So we had some amazing World War One footage in the NFB archives, and from a cinematic point of view, it was very arresting.  But our concern was that it was making the film look too historical, and we really wanted to root the film in the present. Maybe we’ll get it into the DVD extras.

Through your previous projects, you’ve had a lot of experience learning and dealing with corporations.  Was there anything that surprised you during the making of this film? 

I really wasn’t aware of the scale of the off-shoring of corporate wealth. One of the things that people are not aware of is how Amazon, Google, Apple and many of the other companies of the cloud economy are a revolutionary new form of company that international tax rules are not prepared to deal with. These companies don’t have a footprint anywhere, and as they become more and more powerful and wealthy, and shift their profits offshore, they present an incredible intellectual challenge of how to find the territorial footprint of these big cloud economy companies in every country where they operate.

We deal with this in the film, too: what is the footprint of Google? What is the footprint of Amazon? What is the footprint of Apple in the countries where it operates? This is something that has to be dealt with in order to adapt and to cushion societies from the employment impact and the tax erosion impact of these companies in the countries where they operate.

• Check out the trailer for the film below: