Wednesday, April 08, 2009

No income, no trust

As you all know, I'm a rich and powerful investor.

Well, okay, I'm an investor. Like most Canadians my wife and I have RRSP's and an RESP for the kids. And like most Canadians I'm not a guru, wiz-kid, or a day-trader. I make my contributions every pay cheque and put the money in some boring fund or blue-chip company and wait for retirement to come along (the sooner the better).

But those boring funds and blue chips got a lot more exciting on Hallowe'en in October 2006. Up until that time, and during the previous election in which the Stephen Harper's Conservatives received their first minority mandate, we had been assured that their government would never raid senior's nest eggs.

But then Stephen Harper and Jim Flaherty introduced the Tax Fairness Plan - a rather ironic name for a piece of legislation that no one (except the foreign equity funds that snapped up Canadian trusts at rock-bottom prices) considered fair - changed all that. The boring old income trusts that I was saving my money in suddenly lost almost 25% of their value!

That's when I joined the Canadian Association of Income Trust Investors, headed by Brent Fullard.

Brent recently had an article published in Canada's chain of Sun newspapers. I've put a copy of it below, or you can find it at the CAITI blog.

No income, no trust
By: Brent Fullard
Guest Columnist
Sun Newspapers

Lie. Conceal. Fabricate. That was the theme our association used in billboards across the country in the aftermath of Prime Minister Stephen Harper's broken income trust promise.

You would think someone as litigious as Harper would have sued our association for libel. Especially for the full page newspaper ads we ran under the headline of: "Jim Flaherty, your tax leakage analysis is fraudulent."

The reason these public statements did not invite a libel lawsuit is because the best defence against claims of libel is the statements being made are true.

After all, Harper did lie, conceal and fabricate when he broke his election promise to "never" tax income trusts, with his demonstrable lie that income trusts cause tax leakage.

An argument he fabricated by leaving out all of the taxes that are paid to Ottawa by the 38% of income trusts held in RRSPs, and concealed within his 18 pages of blacked out "proof."

Meanwhile our claim that Jim Flaherty's tax leakage analysis is fraudulent is derived from the definition of fraud, which is "an intentional deception made for personal gain or which causes damage to another."

Based on this definition, Flaherty's income trust tax is a fraud since it was based on the intentional deception of his fabricated tax leakage claims, and the policy resulted in Canadians permanently losing $35 billion of their hard-earned retirement savings.

Scandals

These events have enormous relevance to today and the financial scandals that have been perpetrated on an unsuspecting public by the likes of the AIGs, Bennie Madoffs, and Bear Stearns of this world.

The income trust tax and the enormous havoc it created in Canadians' retirement savings, and the massive number of takeovers that ensued (worth $108 billion), mostly by foreigners such as Hong Kong billionaires and middle eastern oil companies, is the real scandal Canadians should make themselves aware of.

Unlike the present day financial meltdown Harper assured us during the last election "would have happened by now" if it was going to happen at all, or the raging debate over how much Harper is responsible for the financial calamity all around us, the damage caused by the income trust tax is something that is the sole consequence of a decision Harper made.

Today's financial meltdown has, no doubt, sensitized a larger number of Canadians about what it actually means to lose half of your retirement savings or to lose the very basis for one's retirement income.

The trust takeovers to date by foreigners have caused Ottawa and all taxpayers to lose more than $1 billion in annual tax revenue, a number that will soon climb to $7.5 billion. And for what? The privilege of having foreigners own more of Canada and the privilege of imposing enormous losses on Canadians saving for retirement?

Unlike today's other financial meltdown, this is an outcome Harper owns, lock, stock and barrel, based on his policy of lie, conceal, fabricate.

Please support CAITI's cause by joining the association, by writing your federal MP, and by boosting our question at the federal Liberal party's onProbation.ca Ask the PM forum.

Cross-posted on 2FatDads at No income, no trust