Budget Insult To Taxpayer Intelligence...AGAIN!!!

By ArdeeL

What a farce this budget is. Flaherty taking credit for increases that were already there and items that had been promised before. Lets look at the claim of increasing the Basic Exemption from $9,600 to $10,320 - NO! this credit has already been established at $10,100 for 2009 and is in all published tax tables for 2009 as a cost of living adjustment. What the budget does is increase it by an extra $220 or 2.2%

What about the increase in the upper limitstes for the 15% and 22% tax brackets up by 7.5%? NO!!!. these upper limits were already established through the "NORMAL" cost of living increase of 2.5% to be $38,832 and $77,664 anyway. The added benefit is about $2,000 on each rate and the tax savings will be a maximum of about $140 until you exceed the $77,000 amount, i.e., $2,000 * 7% (22%-15%). On a weekly basis, this amounts to about $2.69.

The Age Credit will amount to $150 for those with incomes up to $33,000. At that point the lovely CLAWBACK of Age credit kicks in and will wipe it out at the $70,000 level.

Nothing in the budget for RRSP / RRIF or Trusts other than the item related to the 25% reduction in 2008 RRIF amounts.

What an insult to a taxpayers intelligence!!!!

FU from JF

Where is the support Jim?

Flaherty's instinct to cut out of step with world

As the rapidly worsening global recession pushes governments around the world to step up spending, Ottawa's first official response is to cut back.

The fiscal update presented yesterday by Finance Minister Jim Flaherty will suck $6-billion out of the economy next year. Heather Scoffield, Globe and Mail

Professors give Flaherty a failing mark

Desai said there must be across-the-board spending on infrastructure that has been systematically dismantled in Canada for 20 years. She argued the Harper government allowed partisanship to trump doing what was right for the country.

The Economic Forum has argued for massive economic stimulus, largely by investing in the country's infrastructure. Instead, Flaherty offered what McMaster University economist Atif Kubursi called the "window dressing" of minor changes in pension rules, previously announced tax cuts and selling as-yet-undetermined public assets. Linda Diebel, The Toronto Star

Harper plays chess… while Rome burns

The real outrage of yesterday’s economic “update” is not that it seeks to impose on most parliamentarians a change to funding rules that most of them would never ordinarily accept; it’s that it accomplishes nothing else. It’s that in the most dangerous economic times Canada has faced in 20 years if not far longer, this prime minister can’t wipe the smirk off his face and grow up a little. Paul Wells, Macleans

The Commons: Gaming the system

First Dion, then Duceppe, then Layton with a crescendo. “Mr. Speaker, later today Canadians are going to be looking for bold leadership and dramatic and immediate action. They are going to be looking to see EI reform. They want to see strong action to protect their pensions. They want to see credit guarantees for businesses that are on the edge. The jobs of those workers are on the edge literally this afternoon. Canadians want to see investments in infrastructure to create work,” he cried.

His caucus rose to cheer, his voice swelled to yell over them. “Instead of an immediate stimulus package to attack the recession, the government is apparently going to attack democracy,” he continued, the Conservative benches clucking at this. “I ask the Prime Minister how such an attack is going to create one job or protect one pension?” Aaron Wherry, Macleans

Quotes then and now: Harper, Flaherty

Canwest News Service

Wednesday, November 26, 2008

Then and now quotes comparing what Prime Minister Stephen Harper and Finance Minister Jim Flaherty said during and after the campaign for the Oct. 14 election about recession and a deficit.

"This country will not go into recession next year and will lead the G7 countries."
- Prime Minister Stephen Harper (Oct. 10)

"If you don't want a carbon tax and tax increases and a deficit and recession, the only way to ensure that is the case is to vote for the Conservative party."
- Prime Minister Stephen Harper (Oct. 12)

"We may well be in a technical recession."
- Finance Minister Jim Flaherty (Nov. 23)

"The most recent private-sector forecasts suggest the strong possibility of a technical recession at the end of this year and beginning of next."
- Prime Minister Stephen Harper (Nov. 23)

"I know economists will say well, we could run a small deficit but the problem is that once you cross that line as we see in the United States, nothing stops deficits from getting larger and larger and spiralling out of control."
- Prime Minister Stephen Harper (Oct. 6)

"We will not run a deficit."
- Finance Minister Jim Flaherty (Oct. 9)

"If we do short-term deficit spending as a deliberate policy we will have to be able to demonstrate to Canadians that those deficits will genuinely be short term."
- Prime Minister Stephen Harper (Nov. 15)

"The government of Canada today is not planning a deficit. But if the government of Canada decides . . . that we do have to engage in fiscal stimulus, that government spending is essential not just to shore up economic activity but investment markets, that would be the occasion we would go into what would be called a cyclic or a short-term deficit."
- Prime Minister Stephen Harper (Nov. 23)

Can you afford to trust a Conservative government with your retirement savings?

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"We are not facing a deficit," Flaherty said after a speech to the Canadian Association of New York at the New York Yacht Club. Jim Flaherty April 24, 2008

"If we have to run a deficit, we'll run a deficit." Jim Flaherty November 19, 2008

Conservatives drained coffers: Watchdog

Budget officer Kevin Page concluded the federal Conservatives are likely to run budget deficits "in the near term," possibly beginning this year, and that the fault lies as much with Finance Minister Jim Flaherty as it does with the weak economy. Page's report projects a budget deficit of $3.9 billion in 2009-10. But it adds that, if the economic downturn proves worse than expected, next year's federal deficit could hit $14 billion.


Canadians have lost billions because of bad Conservative policy. None of this is new. October 8, 2007



CLICK FOR FULL SIZE IMAGE

Flaherty deserves to be fired as finance minister

The Cornwall Standard Freeholder
November 19, 2008

If Finance Minister Jim Flaherty worked in the private sector he would have been fired long ago.

First he blew away a $12 billion surplus left by the previous government which always built surpluses to take care of a rainy day. The rainy day is here, big time, and we are about to go into deficit, if not there already. Prior to the election Mr. Flaherty guaranteed there would be no deficit during his watch. He and Prime Minister Harper admitted, after the fact and under pressure, that his government knew there were major economic problems in the world but our economy was in such good shape and our banks were so solid, Canada would be pretty well insulated against many of the problems. Now they're admitting, not that they were wrong, but that we probably will be in deficit shortly and they have now joined the bank rescue parade, twice -- but it's not their fault

When Mr. Flaherty listened to bad advice and killed the income trust market, for no proven reason, he started an avalanche of unforeseen consequences. Trust values plunged, building up tremendous capital gain losses that individuals, companies and funds will use to write off against gains resulting in a huge future tax loss for the government in the years to come. More tax losses will be added when retirees take less money from their RRIFs due to trust value loss. Many trusts were bought out by foreigners and pension funds, neither of whom pays tax.\

BCE will soon be off the market, bought out by the teachers pension fund. The billions of tax dollars lost could, right now, be providing a surplus cushion of at least $3 billion and more. The future lost billions are in the double digit. Now we hear that our Canada Pension fund has lost billions Would you keep this man on in your company as your controller or treasurer?

Vernon Holt, Cornwall

mike watkins dot ca : Flaherty's Fiscal Fumbles

"FFF - Flaherty's Fiscal Fumbles - destined to become a regular feature. Today's installment: Flaherty's moves have only enabled more corporate tax avoidance." Mike Watkins dot ca

Recently a $13 billion dollar deal concluded, allowing Teck to buy the remaining shares of Fording Canadian Coal Trust. Despite all the talk of the on-going credit crunch, the overly generous moves by the Bank of Canada and Flaherty's Ministry of Finance have made it possible for banks to work with Teck to obtain the necessary financing and conclude the deal.

No new jobs will be created through this transaction. There is no net benefit to Canada.

Yet Canadian taxpayers are footing a big chunk of the bill, by providing a taxpayer-backed credit backstop, and through being shafted as Teck avoids paying a $4 billion dollar tax bill as a result of this transaction.

While this exercise in tax avoidance plays out under our very noses, lets think back to the last time tax avoidance was a subject in vogue in Conservative politics in Canada.

On October 31st, 2006 Jim Flaherty, then and now the Conservative Minister of Finance, announced that Income Trusts would in the future be subjected to new taxation. The move was particularly controversial as the Conservatives had campaigned only months earlier in part on a promise to leave the income trust sector alone.

The aftermath, dubbed the Halloween Massacre, saw the income trust market plummeting on the news, erasing billions in market value in the weeks to follow. Small and large investors alike, including many of Canada's pension plans, were significantly impacted by the on-going turmoil. Now more than two years later, many still feel betrayed.

Stephen Harper and Jim Flaherty's volte-face on trusts was defended as a sign their government was serious about fairness in taxation. Flaherty said trust conversion was "a growing trend to corporate tax avoidance". From a CBC News article:

By some estimates, the federal and provincial governments stand to lose as much as $1 billion annually in tax revenue to trusts. There are now more than 250 income trusts in Canada.

Trust conversions are increasing in popularity because trusts do not pay corporate tax. Instead, they pay out most of their income in distributions to unitholders, who then pay tax on those distributions.

Flaherty said that situation could not be allowed to continue. "This trend has caused me growing concern," he said. "It's not right and it's not fair."

Bringing both pieces of the puzzle together:

• In October 2006 Conservative Finance Minister Jim Flaherty closed what he called a "loophole" that companies could exploit to avoid paying their fair share of taxes, a loss to taxpayers controversially estimated at the time at $1 billion a year.
• In fall 2008 that same finance minister, backed by Stephen Harper appointed Mark Carney, governor of the Bank of Canada, enabled Teck Cominco to avoid paying $4 billion in corporate taxes.

Flaherty's Fiscal Fumble has cost Canadian taxpayers at least $4 billion in avoided corporate taxes plus we are even footing part of the bill which makes this deal possible in the first place.

The deal smells so bad that even those in financial circles are fuming about it.

Courtesy of Mike Watkins dot ca

Related:
Fording tax avoidance deal poses questions

Deficit Jim gets thumbs down

Think-tank slams Ottawa for 'imprudent budgeting'

Eric Beauchesne , Canwest News Service
Published: Friday, October 31, 2008


OTTAWA - The federal Conservative government abandoned prudent budgeting just when it was needed, an economic think-tank involved in helping this and previous Liberal governments prepare their budget projections charged Friday.

Not only did the government, against the advice of private sector economists, eliminate the annual multi-billion dollar cushion against the impact of an unexpected economic slump in the last budget but has let spending get out of control as well, Global Insight said in one of the most damning analyses to date of the current government's handling of its finances. MORE...

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Cabinet change was needed in finance: Ignatieff

Updated Fri. Oct. 31 2008 8:45 AM ET
CTV.ca News Staff

Liberal party deputy leader Michael Ignatieff said the government doesn't have a grasp of the gravity of the situation.

He said it's difficult to trust Flaherty.

"Before the election he kept saying 'No problem, everything's fine, we're not going into deficit.' When the storm hit during the election they said 'Everything's fine, no big problems.' Now they're aware, now they're fessing up that in fact we're going through the most serious economic crisis in 30 years -- and putting Mr. Flaherty in there is saying basically our economic policy is just fine," Ignatieff told Canada AM. MORE...

Give Jim Flaherty the boot

Brent believes that his first duty is to the hardworking people of Whitby-Oshawa. He will fight for:

• JOBS: a healthy automotive sector means keeping skilled jobs in Whitby-Oshawa, and that's good for everyone. That's why the Liberal Party announced its $1-Billion Advanced Manufacturing Prosperity Fund to support major investments in manufacturing and R&D facilities.

Brent has already secured a committment from the Liberal Party to the terms agreed to on September 7, 2008 that will see General Motors invest $290 million in both Oshawa and the St. Catharines transmission plant.

As part of this important agreement, GM will build a gasoline-electric hybrid version of a mid-size model at its car plant in Oshawa in 2010 and invest a minimum of $40 million to transform engineering facilities in the city to focus on development of environmental technology over five years.

• COMMUNITY: a stong community is the basis of a strong economy. Building and maintaining a vibrant community takes money for infrastructure. Not just roads and hydro, but well-funded schools, community centers, and after-school programs.

• INVESTMENT: Brent's long and successful career in the Investment Capital industry gives him a unique advantage. He has the experience and the skill-set to promote capital investment in Whitby-Oshawa's economy.

Together we can make Whitby-Oshawa into a thriving example of the Canadian spirit — a community dedicated to honest work, a better environment for our children, and hope for the future.

"Vote for Environment" picks Brent Fullard in Whitby-Oshawa

Candidates for Whitby-Oshawa

• David Purdy, New Democratic Party
• Brent Fullard, Liberal Party of Canada
• Jim Flaherty, Conservative Party of Canada
• Yvonne Forbes, Christian Heritage Party of Canada
• Doug Anderson, Green Party of Canada
  

Our Pick

Brent Fullard, Liberal Party of Canada

This is a crucial riding for the environment. Former Mike Harris cabinet member Jim Flaherty won by only 3,412 votes. The NDP and Greens took just over 10,000 votes. It will be a tough race because the Liberal candidate has not run before. We strongly recommend voting for Liberal candidate Brent Fullard.

Please tell your friends to vote smart!

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Richer, Fairer, Greener:
An Action Plan for the 21st Century

Download the full Liberal Plan here

Harper vows to keep income trust tax

Reuters
Mon Sept 22, 2008 11:55am EDT

OTTAWA (Reuters) - Prime Minister Stephen Harper ruled out any reversal of his government's surprise decision in October 2006 to impose a tax on distributions from income trusts, which had become popular investment vehicles.

Harper, campaigning before the October 14 general election, told reporters in Ottawa on Monday that the Conservative government was "forced" to change the income trust rules because corporations were increasingly converting to the tax-sheltered structure, avoiding tax payments to Ottawa.

The main opposition Liberal Party said on Monday that, if it forms the next government, it would replace the planned 31.5 percent tax with a smaller 10 percent rate. Its tax would be refundable for Canadian residents, leaving foreign investors to pay it, and the party projected the tax would bring in C$1 billion in revenue over four years.

But Harper suggested that the other political parties would come to the same conclusion the Conservatives did: changing the tax structure was necessary to stabilize the market.

"Any party that is suggesting it will reverse that is not telling the truth. They will find, and they know just as we knew, that they will have to reverse course," Harper said.

The Conservatives shocked market participants with the Halloween 2006 announcement of the new rules, and market activity that had been driven by income trusts screeched to a stop.

Two of Canada's biggest corporations, telecoms companies Telus Corp and BCE Inc, halted plans to convert into trusts, the Canadian initial public offering market dried up, and BCE has since agreed to be acquired by a private-equity consortium.

Harper also said the government created "very generous" transition arrangements.

"We've allowed income trusts to double in size in the transition period and those taxes actually don't come into effect until 2011, so no income trust has in fact paid any tax," he said.

Related:
Liberals vow to scrap tax on trusts - Globe and Mail

An autopsy of the Telus - BCE deal. How the Harper government favoured Private Equity and turned it's back on Canadian investors.

The environment has now turned quite good for Private Equity

The Conservatives have committed the biggest blunder I've seen in 42 years of business involvement - Seymour Schulich, September 11, 2007

There's just no talking to Jim Flaherty (for outsiders)

By: John Stewart, mississauganews.com
Photo by: Bitpicture

September 18, 2008 08:14 AM - Canada's high-profile federal finance minister is coming to Mississauga South in the heat of an election campaign for a private fundraising function that will be held tonight.

Jim Flaherty is the guest of honour tonight at a fundraising reception at Port Credit's Waterside Inn for Mississauga South Conservative candidate Hugh Arrison. Guests are paying $250 ($100 for students) to enjoy hors d'oeuvres and light refreshments and for the chance to meet the minister. The event runs from 7:30-9 p.m.

"People have told us they don't want cameras and the media there and we have to listen to the people coming to the event," said Dave Brown, Arrison's campaign manager. If the campaign organizers had their way, the reception would likely be open to the media, Brown added. It was scheduled before the federal election was called.

The campaign manager indicated many riding association members are adamant that the focus should be on those who paid to attend the event.

Brown was not sure yesterday whether there would even be a photo opportunity for the local press.

Flaherty's appearance has special interest in Mississauga because he and Mayor Hazel McCallion have engaged in a running verbal battle over McCallion's insistence that the federal government has failed to provide needed funding for cities in general, and municipal infrastructure in particular.

jstewart@mississauga.net

Related:
In this corner, a Tory minister wearing blinders - Toronto Star

Dion promises $70B infrastructure boost - CBC.ca

Durham a gritty battleground

Urban sprawl changing political face

By Antonella Artuso, Toronto Sun
Photosource: tonyleah

On the first full day of campaigning, Jim Flaherty was testifying at the Louisiana trial of a stockbroker who threatened to kill him and his three sons over his decision to end the tax holiday for income trusts.

The same theme of investor betrayal has followed him to his home riding of Whitby-Oshawa where the Liberal Party nominated the head of the Canadian Association of Income Trust Investors/Taxpayers as its candidate.

And to cap off his rough week, Mississauga Mayor Hazel McCallion went postal over the sad state of federal support for cities, putting Flaherty, as the GTA voice of the Conservative Party, in the direct line of fire.

Still Flaherty battles on, rejecting the anti-urban allegations.

"I think there's a lot of noise, quite frankly, by Mayor (David) Miller saying we don't help cities," Flaherty said in an interview this week. "But if they actually look at the facts ... this government is a major help to cities, including making the gas tax sharing permanent because that gives the cities, including, of course, the City of Toronto, the opportunity for long-term planning.

"And the mayor of Montreal told me it was the most important item we could do in the budget this year ... he appreciates it even if Mayor Miller doesn't," he said.

It was a difficult start for Flaherty, one of four Conservative incumbents fighting to retain seats in Durham Region -- a vast, 2,950-square-km tapestry of cities, hamlets, farms and cottage country east of Toronto.

By GTA standards, it has been fertile territory for the Harperites, although two of the ridings -- Ajax-Pickering and Pickering Scarborough-East -- are held by Liberals.

Election observers are watching to see what happens to Flaherty, the closest Conservative MP to Toronto, and to Conservative MP Colin Carrie in Oshawa who has drawn heat over his position on waterfront development in that community.

His opponents -- Liberal Sean Godfrey and NDP Mike Shields -- are hoping to capitalize on the situation.

Premier Dalton McGuinty's high profile support of the auto sector -- and his pointed references to the lack of a federal "partner" in his endeavours -- hasn't helped Conservative fortunes in the hard-hit town, either.

No surprise that there was a last minute, pre-election announcement by the Harper government to broker a $290 million investment by GM and to invest up to $80 million in Ford Canada.

In Whitby-Oshawa, Flaherty, known for keeping the home fires burning, will be looking for a political payoff for his local largesse -- which includes a new university, the proposed Hwy. 407 extension and the promised train between Peterborough and Union Station.

The riding is changing as new suburbs grow out of corn fields, bringing residents with Toronto sensibilities into the voting mix.

New Canadians are also settling into the area, bringing their own priorities with them.

While Flaherty has so far withstood the Liberal juggernaut that is the 416 and increasingly the 905, he took his federal riding last time less impressively than expected for a politician known for delivering big-time locally.

His losing battles with McGuinty over corporate tax rates in Ontario didn't do him any political favours, either.

Still, Flaherty says his Liberal opponent this time around is a one-issue candidate parachuted into the community and known for having expressed "extremist" comments.

Brent Fullard, a former executive managing director for BMO Nesbitt Burns and founder of the Canadian Association of Income Trust Investors/Taxpayers, said he does have roots in the community having worked in the auto manufacturing sector in Oshawa.

The issues facing Whitby-Oshawa, however, are similar in many respects to those across the country, he said.

"Do we have a transparent, open and accountable government? Are we being governed by principles or are we being governed by politics? This very election is being brought to Canadians at the cost of ... $300 million because Harper wanted (an election), for his reasons. We had three by-elections that were one day away from being finished. For me, that's not my version of democracy.

"This is a man who committed by law to not have an election until a fixed election date and then we find out there's some fine print there. So I consider Stephen Harper to be Stephen 'Loophole' Harper," he said.

For two years, Fullard has campaigned on behalf of Canadians who were promised by the Harper government that income trusts would not be taxed only to have Flaherty suddenly announce the opposite.

"I'm not going to Whitby-Oshawa to hold Jim Flaherty responsible for the truck plant shutting down because that's preposterous because that's not his fault ... but I will blame him for the long litany of things that are his fault and I'm going to hold him to account in his riding," Fullard said.

Fullard sent out e-mails in 2007 that drew comparisons between Harper and Adolph Hitler, comments he withdrew as a newly-minted candidate.

"What prompted me to say those inappropriate things that I've now apologized for was when I opened up the (newspaper) in April and I find that the Conservatives are in the name of ethnic outreach programs going around and profiling in every riding in this country people by way of their race, their ethnicity and their religion ... that is so near to the act of discrimination," Fullard said. "I am an extreme candidate insofar as I'm an extremely committed individual to ensuring that truth be told by governments, and that accountability actually means accountability."

The local issue for Fullard is the economy, and he says a Liberal government is fully prepared to follow through on the promises of the Conservative government to invest in GM and Ford.

"And so a Liberal government has made the same commitment as has been agreed to by the Conservatives, and the operative question is -- whose promise are you more apt to rely on?" Fullard said.

The dramatic loss of manufacturing jobs is a pressing issue for all Durham ridings.

The pain is beginning to be felt even in the well-tended streets of Durham surburbia.

Durham Regional Chair Roger Anderson points out the region's social services costs are climbing accordingly.

"I think the government, whichever government's elected, has to get back into social housing," Anderson said. "There's a huge demand across the 905. There's no money. We have a capital repair bill of well over a couple of million dollars that we can't afford that was given to us by the provincial and federal governments."

Anderson also cites the need to unravel the knot that is the 60,000 acres of land set aside for 30 years for the Pickering Airport, which never got off the ground. The issue has vexed politicians and divided locals, some seeing the land as a unique opportunity to preserve green and agricultural lands and others salivating over the vast development potential.

Help Brent Fullard and the Liberals clean up Flaherty's financial mess

Support Brent now. Click here to make your donation.

Brent Fullard invites Canadians from Whitby-Oshawa and all regions of Canada to join his fight against Jim Flaherty and the Conservative government’s dismal mismanagement of the country’s finances.

“Canada’s economy is the worst in the G7. Canada has now had its worst performance in 17 years – since Brian Mulroney. The economy is slumping. Hard working Canadians are losing their jobs and what does this government do? Insult them and abandon them with laissez-faire, I don’t care policies,” according to Mr. Dion.

“Conservatives do not understand the 21st century economy. The cost of fossil fuels is only going to go up. The only long term solution is to invest in the green economy and renewable alternatives. The Conservative short-sighted approach will only delay the inevitable.

“A Liberal government will invest in partnership with Canadians by cutting taxes for families, investing in the manufacturing sector and building strong jobs. By building Canada as a leader in the green economy we will build a strong economy for today and the next generation.”

Mr. Dion made his comments at a Liberal rally with Ajax-Pickering MP Mark Holland and was joined by Liberal Finance Critic John McCallum and Associate Finance Critic Martha Hall Findlay in welcoming the newest member of the Liberal team, candidate Brent Fullard, who is running in Mr. Flaherty’s riding of Whitby-Oshawa.

Mr. Fullard founded the Canadian Association of Income Trust Investors to fight Mr. Flaherty's decision to tax income trusts after the Conservatives promised not to.

“As a former General Motors employee and leading income trust investor advocate, Mr. Fullard knows all too well how Mr. Flaherty and his government have betrayed and abandoned Canadians,” said Mr. Holland. “Mr. Flaherty and his Prime Minister left investors bleeding and auto workers unemployed. This is not good economic management.

“It was a Liberal government that swept up after the last Conservative government, and we will do it again. We will build on our party’s solid history of job creation, balanced budgets and progressive tax cuts – working with Canadians, not against them.”

Mr. McCallum pointed out how in the dying days of the Harper government, Conservatives racked up almost $9 billion in pre-election spending promises – including a couple of funding announcements for the ailing auto sector.

“This government thinks it can ignore the auto sector for two-and-a-half years and then make a photo-op announcement on the eve of an election and everything will be alright,” said Mr. McCallum. “This is the same government that, prior to the writ dropping, refused to make investments in auto sector capital and innovation, calling them ‘band-aid solutions.’ The result of that negligence has been devastating, and nowhere has that devastation been felt more than in this region of Ontario.”

Ms. Hall Findlay said that while Ontario sits in the midst of the biggest economic downturn in years, Minister Flaherty does nothing but attack his home province.

“He called Ontario ‘the last place to invest’ and Premier Dalton McGuinty the ‘small man of Confederation’ for defending the principles of democracy,” she said. “He told Ontario mayors that he was not in the ‘pothole business’ and dismissed the huge infrastructure deficit they face by calling them ‘whiners.’

“The residents of Ontario – and all of Canada – need a government that is going to stick by them and work with them every day to find long-term solutions, not sit back and insult them in their time of need,” she said.

Mr. Fullard said he was proud to be joining the Liberal team because of Mr. Dion’s plan to build the Canada of the future through partnership with Canadian businesses.

“Canadians have had enough of Mr. Flaherty’s broken promises,” he said. “The income trust fiasco – which cost investors some $35 billion – is just one of a string of betrayals that Mr. Flaherty is going to have to explain to the residents of Whitby-Oshawa. Even worse is that this broken promise is predicated on the false premise that income trusts cause tax leakage.”

Canadians from all regions of Canada can donate to Brent's campaign, not just residents of Whitby-Oshawa. Make a difference in Canada's future, make a contribution to Brent's effort today.

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Liberal Candidate for Whitby-Oshawa seeks information on the losses sustained by the Canada Pension Plan

as a result of Jim Flaherty's income trust betrayal

TORONTO, Sept. 11 /CNW/ - Today Liberal Candidate for Whitby-Oshawa, Brent Fullard delivered a letter to the CEO of the CPPIB seeking detailed information on the losses sustained by the Canada Pension Plan, and therefore all Canadians, as result of Jim Flaherty's income trust betrayal.

For further information or a copy of the letter please email:
brent.fullard@rogers.com

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September 11, 2008

Canada Pension Plan Investment Board
One Queen Street East
Suite 2600, P.O. Box 101
Toronto, Ontario M5C 2W5
Canada

Dear Mr. Denison, President & CEO:

Re: The losses sustained by the Canada Pension Plan by Jim Flaherty’s Income Trust Tax

I am writing to you as the federal Liberal Candidate in the upcoming election for the riding of Whitby-Oshawa, the riding of Canada’s Minister of Finance, Jim Flaherty which as you know will be taking place on October 14, 2008.

It is important to voters in “Whitby-Oshawa” that their representative in Ottawa is acting in a responsible and prudent manner at all times. The same is true for all Canadians insofar as their Finance Minister is concerned. This inquiry concerns Mr Flaherty’s policy to tax an aribitrailiy selected subset flow through investment vehicles but not others, such as his law firm tax flow through vehicle Flaherty Dow Elliott & McCarthy, which pays no taxes.

In order to accurately inform Canadians of one of the many ways in which Mr. Flaherty’s policy to tax publicly traded income trusts, (and not all other firms of trusts, including REITs) negatively affects all Canadians, I am requesting from you detailed information on the “mark to market” impact of this tax on the public income trust portfolio holdings of the Canada Pension Plan.

I cite the following from your website:

“While the CPP Investment Board operates at arm’s length from governments, we are subject to very rigorous accountability requirements. Accountability is deeply ingrained in the CPP Investment Board's legislation, governance and in the policies and practices of the board, officers and employees.”

It is in this regard that I am writing to you, as Canadians are in need of accountability on the issue of the taxation of public income trusts and the impact it has had on their retirement assets within the Canada Pension Plan.

Unfortunately the level of portfolio disclosure afforded Canadians concerning the income trust holdings of the Canada Pension Plan and the timing of the tax announcement (October 31s, 2006) means that there is insufficient public information to make this calculation with absolute precision, due to timing differences and limited disclosure.

However a close approximation of the loss sustained by the Canada Pension Plan can be made, as follows.

On October 29, 2007 , the CPP income trust holdings (excluding REITs) held by CPP on March 31, 2007 had declined in value by $173,346,000 if those holdings had remained in place from the announcement date (October 31, 2006) onward.

On September 8, 2008 , the CPP income trust holdings (excluding REITs) held by CPP on March 31, 2007 had declined in value by $206,935,000 if those holdings had remained in place from the announcement date (October 31, 2006) onward.

We seek more detailed disclosure from you on the holdings of public income trusts by the Canada Pension Plan on October 31, 2006 and various points in time, specifically two weeks, six months, twelve months and eighteen months after the announcement as well as presently, in order to ascertain the absolute level of loss experienced by all Canadians and to demonstrate the fact that the loss incurred at the outset has been sustained over time, as is concluded from our analysis and as corroborated by the sustained loss in the broader income trust index.

In the event that the various investment positions held in the CPP have been sold at points during these various periods of time, please perform a “run down” analysis in which it is assumed that the monies received from the sale of public income trusts were not reinvested, but remained as cash at the time of sale to the end of the time period in question.

We request this information from you on a timely basis in order that your findings can be fully disseminated to the voting public. well in advance of the October 14, 2008 election date on this important policy matter affecting the retirement security of all Canadians, both inside and outside the CPP.

If you have any questions please call me at 647 505 2224 (cell)

Thank you in advance,

Yours truly



Brent Fullard
Liberal Candidate for Whitby–Oshawa

Campaign Headquarters
1540 Dundas St E.
Whitby ON
L1N 2K7

Jim Flaherty's worst nightmare

Posted: September 07, 2008, 2:47 PM by Diane Francis
Income Trust Debacle, Greed, Canadian Politics


Canada's Finance Minister, Jim Flaherty, has made a number of foolish policy decisions during his tenure and his nemesis, investment banker Brent Fullard, is taking a run at him in this Oct. 14 election. The sparks will fly and Mr. Flaherty had better bone up on his debating skills and go to school on the economics, taxation, forex, stock market and investor implications which he obvious did not do before making two egregious errors:

1. First and foremost, the income trust fiasco (which wasn't necessary and damaged 2.5 million Canadians Conservatives who invest in the stock market; damaged the junior oil sector by eliminating an important player and damaged Canada's taxpayers by sparking a leveraged buyout mania of income trusts. Damage will be long-lasting because the buyers are private equity and foreigners which have borrowed heavily and will write off all the cash flow against debt service costs, thus avoiding taxes for decades.

2. Scrapping withholding taxes to foreigners who are using Canadian-generated cash flow to service their foreign debts. This is a made-in-Goldman-Sachs policy which enhances the hollowing out of Canadian corporations.

Rumors are also that Buzz Hargrove will run against Flaherty in the car-heavy riding, but massive grants to GM may forestall that. Besides, his candidacy might split the vote which would otherwise go to the angry Mr. Fullard.

Here is Brent's press release and contact information:

WHITBY-OSHAWA, Sept. 7 /CNW/ - The Whitby-Oshawa Federal Liberal Riding Association today announces that Brent Fullard will be the candidate for theriding of Whitby-Oshawa, subject to confirmation at a candidates meeting scheduled for Tuesday September, 9, 2008.

Known for his tireless enthusiasm and dedication, Brent Fullard has devoted considerable time on a strictly volunteer basis as the CEO of Canadian Association of Income Trust Investors / Taxpayers, a group he founded to advocate for accountability and transparency from the Harper government and to reveal the government's lies about so-called tax leakage.

In 1979, immediately upon graduation from Queen's University, Brent began work at the General Motors Car Assembly Plant in Oshawa.

Thereafter, he spent over 20 years in Canadian capital markets, recently as Executive Managing Director and Head of Equity Capital Markets for BMO Nesbitt Burns and presently as the Head of Catalyst Asset Management, who were active in their opposition to the junk bond leveraged buyout of BCE before the CRTC and the Supreme Court of Canada.

Brent's experience also covers the Canadian oil and gas industry in the time he worked at Dome Petroleum in the early 80's.

Brent Fullard stated today: "I look forward to campaigning in Whitby-Oshawa against the practices and policies of the Stephen Harper government and outline why I believe Ontario is a great place to live, work and invest, and how we can make it even better."

Brent has been married to Christina for 20 years, and together they have three teenaged children.

For further information:
Brent@JimHadHisChance.ca
(647) 505-2224

Related:
Jim Flaherty challenge: debate income trusts - Diane Francis

Flaherty explains why he won't change rules on Income Trusts

"It's the law now" Jim Flaherty's reason for not revising IT double taxation rules that destroyed $35 Billion of Canadian's savings on October 31, 2006.

"It may be the law, however the full destructive effects don’t kick in until 2011. There’s still time to avert disaster. Meanwhile it's pathetic how bad laws, based on Lies and Myths, are easy for Tory's to uphold but good laws like Election Timing are easy to break." Brent Fullard, CAITI




Related:
Flaherty refuses the $50,000 debate challenge - CAITI

$50,000 offered in scholarships if Flaherty will debate income trust tax - The Green Party

Flaherty's proof, 18 pages of blacked out documents

MP should represent people, not the PM

Cornwall Standard Freeholder

April 29, 2007

Something is lost in our so-called democratic system when our representative in Ottawa follows the party line issued by the PMO and doesn't bother to thoroughly check back with the people he represents.

Following the fateful "Halloween Massacre" of income trusts (yes, that again) carried out by our federal minister of finance, Jim Flaherty, one of my associates called our local MP to complain about the loss of $35 billion in asset value overnight. Mr. Lauzon admitted he didn't understand anything about the trusts and yet he subsequently voted for the bill in the House of Commons. At a meeting this past week in company with Senator Marjorie LeBreton, when challenged, he said he didn't own any stocks but had checked back with a local stock broker back at that time. Does one stockbroker represent the electorate of this constituency? In the meantime, before the critical vote, I and others had sent him the many reports by professionals proving that the tax leakage issue was hollow and that there would be serious consequences for the country if the bill was enacted (now proven to be true). This would have been Mr. Lauzon's springboard to truly test local feelings.

Several of us would have been happy to discuss the matter and give him a better understanding of our dilemma to take back to the caucus. We were completely ignored.

You will notice that a Conservative tactic is always to blame the victim, in our case - we shouldn't have invested in such a narrow market - we were not diversified enough. Well, in fact, prior to Oct. 31 the market cap of trusts was about $225 billion across a wide spectrum of industries. The trust itself is a hybrid instrument combining the attributes of common equity and debt (stocks and bonds).

How's that for a diversified portfolio! Another thought to ponder - in 2006, 15 per cent of new listings were trusts and 32 per cent were for mining. Which do you think created more tax leakage and which carried more risk?

Vernon Holt,

Cornwall

Energy trust tax: dumb and dumber by Diane Francis

National Post
Posted: March 19, 2008, 6:03 PM

There remains trouble in Toryland over finance minister Jim Flaherty’s non-sensical tax on energy trusts and the income trust debacle cost the party a byelection in B.C. this week. Its candidate cited income trusts as the major concern in the election. It is an issue that simply will not go away because it should not. Prime Minister Stephen Harper, at Flaherty's urging, reneged on a firm promise which is good leadership.

The issue is the single biggest reason why the Tories have not, and cannot, get a majority in the polls. Their foolish and flawed flip flop against trusts devastated and alienated their base. Some $35 billion in value disappeared overnight, affecting two million Canadian investors.

Taxing the energy trusts too, when other countries do not, has been a major policy blunder and Albertans are determined to prove how foolish it all has been with an initiative announced last week.

Energy trusts have joined the Liberals who have asked the Auditor General of Canada to investigate Flaherty’s claims that taxing the trusts was necessary to staunch tax leakage.

It was nonsense then and still is.

“$110 a barrel oil prices have camouflaged what is a big mistake in policy,” said Sue Riddell Rose in a phone interview with me last week. She is CEO of Paramount Energy Trust and the Coalition for Energy Trusts spokesperson.

Trusts used everywhere else

Trust structures are used, and recognized, around the world as a more efficient means of managing commodity companies which find planning difficult due to price fluctuations. Flaherty exempted real estate trusts but not energy trusts, a damaging inconsistency.

About 20% of the country’s 33 energy trusts (which pay considerably more taxes than all the foreign-owned oil companies combined) have been swallowed up by foreigners or other entities.

Ottawa’s attack has ruined the junior oil sector too since October 2006 despite soaring oil prices, she said.

“The junior oil sector is no longer vibrant. There is no exit strategy which was to sell oil and gas assets to trusts,” she said. Put another way, if oil prices had remained the same as when Flaherty made his tax announcement on Oct. 31, 2006, the oil patch would be in “dire” straits.

“They did not do their homework. They did not understand the industry and they have deceived the Canadian public,” she said.

Trusts really dumb idea

Flaherty’s leakage excuse was debunked in a report by accounting giant Deloitte weeks ago in a study that showed that the reverse has happened: where there was no leakage there is not massive leakage.

The mistake, or omission, made by him and Mark Carney – author of the scheme and rewarded by becoming Governor of the Bank of Canada -- was to exclude the massive downstream income trusts flowed to unitholders who paid top taxation rates.

It was amateur hour and the harm has been ongoing and will worsen, Riddell explained.

“In 2006, there was no leakage at all and revenues were enhanced by the trust structure,” she said. “We’ve tried to get breakdowns from government as to the percentage of its cash surpluses that are coming from this but cannot get anywhere.”

She said a rough guess is that Flaherty’s folly has cost governments at least $1 billion in tax revenues, but only the Auditor General, with her special access, can do the analysis needed for taxpayers.

“It’s a big number,” she said. “There are two things we would like them to do: Go through their analysis re the actual, downstream revenue and then to analyze what has been foregone as a result of the changes.”
Why isn’t she and others giving up?

“We continue to believe a proper analysis was not done and that the wrong decision was made to enable the efficient recovery of resources for Canadians,” she said. “I personally feel deceived by them because they misrepresented information to Canadians. Something else is driving these decisions and I think Canadians should know. I don’t.”

Jim Flaherty's income splitting will only benefit 14% of seniors...himself included

Jim Flaherty would like to be seen as the friend of ordinary Canadians. Unfortunately he is not. He is a friend of special interests, including his own.

When he announced that retired people would be able to take advantage of income splitting, he left 85% of them out in the cold.

How? By saying that only seniors who were members of defined pension plans could participate in this tax break. Unfortunately, a mere 15% of Canadians belong to this kind of pension plan. As for the others, they are out of luck.

Not Jim though. He is a member of not one but two gold-plated pension plans. The one he'll get from the Ontario government AND the one he'll get from the federal government. No wonder he's concerned about those future tax breaks.

As for the rest of us, what breaks do we get Jim?

Related:
Jimhadhischance.ca

The head of the CAW is calling for Jim Flaherty's upcoming election defeat. We second that motion...Whitby/Oshawa Times

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