Friday, July 6, 2007

McCallum blasts income-trust tax

By Nathan Taylor

Tuesday, July 10, 2007 - 07:00

Local News - Three days before federal finance minister Jim Flaherty visits the area, his critic in the Opposition, Liberal MP John McCallum, was in Orillia denouncing the Conservative government’s October announcement that income trusts would be taxed.

At a town-hall-style meeting at Couchiching Golf and Country Club yesterday, McCallum, a former senior vice-president and chief economist with the Royal Bank of Canada, blasted the government’s decision to slap a 31.5- per-cent tax on existing income trusts.

“The Conservative party could not have been clearer during the election campaign that they would not tax income trusts. Partly as a consequence of that, people took the prime minister for his word and flooded into income trusts,” said McCallum, also a former minister of national defence, veterans affairs and national revenue. “Essentially, the government dropped a nuclear bomb on all the existing income trusts.”

Joining McCallum at the front of the room were Simcoe North federal Liberal candidate John Waite and Brent Fullard, president and CEO of the Canadian Association of Income Trust Investors, who is also in opposition to the Conservative plan.

“This tax is designed not to raise revenues. It’s designed to kill this market, force all these income trusts into corporations,” Fullard told the audience of about 25.

After some introductory speeches, the guests opened the meeting to questions from the floor.

“I’ve had bigger crowds, but I haven’t had crowds with better questions,” McCallum said.

Waite set up the forum after receiving numerous inquiries regarding the Liberal plan for income trusts.

“The common response would be to fire back an e-mail telling them to ‘get a life,’” Waite quipped, referring to an e-mail faux pas in April by a staffer for Simcoe North MP Bruce Stanton. “Instead, I fired an e-mail off to the finance critic asking him to come to Orillia to explain.”

Although there’s no set date for the next federal election, McCallum tried to make some fans yesterday by telling the audience of the Grits’ plan: scrapping the 31.5- per-cent tax and replacing it with a 10-per-cent income-trust distribution tax that would be refundable for all Canadian residents.

Flaherty will be at the Horseshoe Resort Thursday evening with his wife, Whitby-Ajax MPP Christine Elliott, for a Simcoe North Provincial Progressive Conservative Association fundraiser.

Orillia Packet & Times