Monday, January 14, 2008

Canada's rich guys damage others for profit - by Diane Francis

The injustice goes on: $35 billion in damage was done to small investors because of a tax which destroyed income trusts based on faulty information and a behind-closed-doors campaign by tycoons such as Power Corporation's Paul Desmarais Jr., BCE's Michael Sabia, Manulife's Dominick D’Alessandro and EnCana's Gwyn Morgan. Their lobbying was pure self-interest: Two own insurance companies which directly compete against income trusts by selling annuity products. Sabia and Morgan ran companies which competed against income trusts in the marketplace.

A fix: Tycoons with shlep should register as lobbyists

David and Lorraine Marshall of Ontario are two of an estimated two million Canadian income trust victims and they wrote last year to the Office of the Registrar of Lobbyists to make a formal complaint about Desmarais Jr. and Morgan. Both lobbied hard to destroy income trusts because Desmarais’ Great West Life competes against income trusts and Morgan fought against trusts while a CEO and huge shareholder of EnCana.

“It would appear that Mr. Desmarais lobbied Mr. Harper [about income trusts] on a plane trip to Mexico according to newspaper reports,” wrote Mr. Marshall to Ottawa officials.

“The second person, Gwyn Morgan, stated he went to Ottawa on October 30th and met with Mr. Harper and Mr. Flaherty to convince them to attack income trusts.”

“Are these two gentlemen registered lobbyists? I am respectfully asking that this matter be investigated. If it is determined that rules were broken, I am asking that penalties be applied to the full extent of the law,” he added.
So far, this letter has not even been acknowledged by the bureaucracy. Read the entire article...

CAITI articles on Gwyn Morgan, Former CEO of Encana

"Michael Sabia dropped an early-morning bombshell on Canadian investors: His company, BCE Inc., was planning to follow the lead of archrival Telus Corp. and transform its storied telephone operations into a $27-billion income trust."

"Paul Desmarais Jr., the well-connected chairman of Power Corp. of Canada, even railed against trusts in a conversation with Prime Minister Stephen Harper during a trip to Mexico, and told him he should act quickly to stop the raft of conversions, according to sources."

"Mr. Flaherty and his team had been fretting about the rampaging advance of trusts. They had caught wind of rumours that Suncor Energy Inc. and EnCana Corp. were each modelling trust conversions that could be valued at close to $40-billion, opening the door to mass conversions in the oil patch." The Globe and Mail, November 2 2006