Friday, November 3, 2006
I am the President of a major downtown Conservative Party Riding Association. I tell you this so you will know who I am. During the three years I have been President of the Association I have not had even one contact from you or anyone in your office. I am very angry at the Party’s action on Income Trusts. Shame on you.
First let me offer you congratulations on the support of the NDP and BLOQ, for the actions taken against small and medium sized investors in Income Trusts. I’m sure that by implementing their anti-investor policies you will gain exactly zero new voters. On the other hand you have just lost the next election. I’m also sure that Prime Minister Bob Rae will continue your practice of ruining small and medium investors.
Flaherty’s action on Tuesday evening has permanently reduced my net worth and income by a substantial amount. To compensate for this outrageous tax grab, your government has increased the Senior Tax Credit by $1,000, which is worth $160 – big deal; my contributions to the Conservative Party are a multiple of this amount. You will also allow “pension” income splitting between spouses. Well, I don’t have any pension, other then the Old Age & Security and the Quebec Pension Plan, so this is of little use to me. My income is primarily from my investments. As noted above, because of your governments attack on one group of investors, my income will significantly drop. Just so you know how it feels, I insist that you and Mr. Flaherty take an immediate and permanent 20% cut in your salaries. What’s fair for me should be fair for you.
I have worked very hard for the Conservative Party in the last number of election, because I believed in our economic philosophy and our platform. I was especially pleased with your pronouncement that a Tory government would not increase taxes on Income Trusts – in fact this was in the Party platform. You were either very careless with your statement or were lying because you, as an economist and a political policy analyst, understood the tax implications of the trust business structure. I would expect such behavior in Venezuela but not Canada – we look like a banana republic to non-Canadians. With the losses I have had, because of your unfair decision, I could have financed my grandchildrens’ education right through to university.
If the Liberals promise to grandfather the current tax treatment, for Canadians holding existing Trust Units and paying tax on the distributions, they will have my vote and I expect the vote of hundreds of thousands of other voters, perhaps a million plus.
I realize that things were getting out of hand with large corporations planning to convert to Income Trusts but why did you attack small and medium sized investors to solve this problem? Perhaps you and Flaherty could have put in place your Income Trust plan for new Trusts and leave existing Trusts alone. If the government was worried about tax leakage, because Trust Units are held in pension funds, RRSPs and by foreigners you should have used some imagination to solve the problem and not damage tax payers like me. As a tax payer I paid substantial taxes on my Trust distributions. In fact my personal tax rate, on these distributions, is higher then the corporate tax rate that might have been paid by the organizations which made the distributions, if they were taxable. I doubt there was much tax leakage from tax paying recipients, like me.
Do you realize that individual Canadians, through their pension plans, RRSPs and direct investments, have lost 78% of the $31 billion that have been lost in Income Trusts (as of Thursday)? This amounts to $24 billion or $727 per Canadian. However, the per Canadian losses are consecrated in people who trusted you. The $31 billion loss is 2.3% of Canada’s GDP, much higher than our foreign aid, and 6.4% of the Federal Government’s debt. What a colossal blunder. I read in today’s paper that Flaherty is considering advancing the further 1% reduction in GST. to next spring. He is trying to make up for his incredible mistake on Income Trusts. Well it won’t work.
The Income Trust structure was not a “tax loophole” or a “gimmick”. It was permitted under Canadian tax law and was perfectly legal. To treat all tax payers equally, the government should impose a 15% “tax” on all publicly traded security investments in Canada. Of course that is ridiculous, but that is what you have done to investors in Income Trusts. Imagine, you could probably eliminate the total Canadian debt with such a tax. You make the NDP look good
Comrade, the net result of my anger is that I can not longer be associated with a politically inept, incompetent political party, that hurts small and medium sized investors and that doesn’t live up to its promises. Therefore, I am resigning my position as President of the Conservative Party Riding Association and the Association board of directors. With this email I am also resigning as a member of the Party.
At the very least Flaherty must be fired for lack of imagination and bad judgment. As for you, you should get out more and make personal contact with the grass roots of the Party, so you will know what they think.
Sean Ahern, President (Past)
Westmount Ville-Marie Conservative Party Association
Long-time Tory angrily quits party over trusts
November 4, 2006
OTTAWA — Sean Ahern helped organize a $500-a-plate brunch last Sunday to raise money for the Conservatives in the Montreal constituency of Westmount–Ville-Marie where he was riding association president. Yesterday, in response to the government's decision to tax income trusts, he tore up his party membership. Source: Globe and Mail
Thursday, November 1, 2007
Friday, November 3, 2006