The NDP are basing their income trust tax policy on someone described by the courts as "frivolous and vexatious"

By Brent Fullard

The NDP are clearly lacking in research capabilities of their own, That was proved abundantly obvious when Judy Wasylycia-Leis made a claim in Parliament on May 10, 2007 that CAITI had had donated $282,000 since 1993 to the Liberal party and $53,700 to Liberal leadership contenders in 2006. Not only does CAITI have a strict policy against making any political donations, direct or directly, at the time of this claim, CAITI had only existed for less than 4 months. That didn’t stop former used car salesman and Conservative MP Dean Del Mastro from parroting the same claims five minutes later.

Now we know how false claims like tax leakage get started and how others are quick to blindly jump on the band wagon. Emphasis on the word “blind”. Much like the press in Canada.

Another example of the NDP’s ineptitude at research occurred at the NDP gathering I attended on the subject of the SPP (Security and Prosperity Partnership) on November 24. The NDP’s depth of knowledge on this subject by their “in house expert on the SPP, Peter Julian, could easily be superseded by spending 2 hours of googling SPP and listening to Lou Dobbs on CNN . Peter Julian admitted that the NDP are still in the process of putting the SPP puzzle together and would welcome receiving information from people in the audience.

This form of trolling for information obviously makes the NDP susceptible to people like Diane Urquhart, the self professed “independent analyst”, as they are happy to “out source” their research on virtually any fact based topic. Not sure what “independent analyst” means, as Diane states she has no clients. If that’s the case, then she is only representing herself as an individual investor.

I do know, however that the NDP have bought Diane’s arguments about income trusts, hook, line and sinker. Diane also seems to get a lot of press lineage for someone who has a questionable credentials. The NDP are so fond of Diane Urquhart, that they saw to it that she testified no less than three times before the Finance Committee on the matter of income trusts. I am only aware of one other person who testified more than once, and that was Dennis Bruce who testified twice. He however, as Vice President with HLB Decision Economics, was the only person who worked with the Department of Finance to create with them the tax leakage model and published the definitive study that lays to shame the false allegations of tax leakage entitled Tax Revenue Implications of Income Trusts.

Meanwhile the NDP are in bed with the “frivolous and vexatious Diane Urquhart”. At least according to the courts. So too it seems are the Conservatives

Here was the glowing introduction afforded Diane Urquhart by Mr. Dean Del Mastro (Peterborough, CPC):

"Mrs. Urquhart, I'm just reviewing your resumé a little bit. You've got quite of bit of experience in relation to investment and you are certainly a professional witness before this committee. I appreciate your being here.”

It is clear from Diane’s resume that she has engaged in resume inflation and resume puffery. Despite what her resume says, at no point was Diane Urquhart the Managing Director of Equities Research and Institutional Equities at Burns Fry Limited, since during Diane’s time at Burns Fry, which ended in 2004, the title of Managing Director did not exist at the firm. No one had such a title. Nor did Diane “Co-lead the daily operations of 175 research, sales and trading personnel” at Burns Fry. Such a construct did not exist, as Diane had no responsibility for the institutional Sales and Trading personnel at Burns Fry. I can assure you, since I also worked at Burns Fry from 1991 to 2002, that if she did, they all would have quit. The individual responsible for that function was Barry Cooper. Diane reported to him as the manager of the Research Department. I have confirmed this with other people at Burns Fry who were there at the time and who were very aware of what Diane did and did not do. Diane obviously harbored desires to be the Head of Research, Sales and Trading and launched at the time what can only be best described as a “coup” against Barry Cooper that failed miserably. She left shortly thereafter.

Diane also describes on her resume that after leaving Scotia Capital Markets in 1998 that she was for the period from 1999 to 2001 a Venture capital investor in iTCANADA.com, an internet services consolidator that was sold to Technovision Systems Inc. in December 2000.

Diane however fails to describe how she went on to lose about all of her $1.19 million investment in Technovision that she received in exchange for her 25% ownership of ITCANADA.com and sought to recover her failed investment in actions she brought in the BC and Ontario courts and involving the securities commissions in BC and Ontario. The details are available at the Ontario Securities Commission

The details of these legal proceedings are not very flattering of Diane Urquhart as an investor or of her business acumen. Why the NDP are relying on her views on income trust only goes to discredit the NDP’s own credibility.

The Ontario Court ruled:

• “We find that this section 104 application on behalf of the Applicants is out of time and frivolous and vexatious, and in the words of the Honourable Justice Pitt, "this is precisely the kind of proceeding that motions judges are obliged to stay or dismiss on grounds of res judicata, issue estoppel, abuse of process and on the ground that they are frivolous and vexatious."

• This is a private dispute and should be resolved in the civil courts. Failure to succeed in the civil court should not be the basis for an application to the Commission to change a private dispute into a matter of public interest.

• The application of Urquhart is therefore dismissed.”

Related:
The NDP are needlessly setting themselves up
Tax Revenue Implications of Income Trusts

The NDP are needlessly setting themselves up

By Brent Fullard

This evening [November 24] I attended an NDP public gathering in Hamilton hosted by four NDP MPs, which constitutes about 13% of the NDP’s caucus. The subject matter of the meeting was the Security and Prosperity Partnership. The NDP has been holding a number of similar meetings across the country on this matter and I learned they are planning to roll out their position on the SPP in a more prominent way in two weeks time. The NDP are to be applauded for giving the SPP greater visibility, since the self described modus operandi of the SPP is “evolution by stealth” and the supposedly innocuous jelly bean agenda, as Stephen Harper prefers to call it.

NDP Peter Julian described for the audience of 120 or so people the top ten things that Canadians need to know about the SPP. I only took note of the seven items described by Peter Julian that best serve to highlight the inherent contradiction between the NDP being against the SPP and being for the income trust tax:

(1) Policy is the product of the CCCE
(2) Absence of Public Consultation
(3) It is secret
(4) Blacked out documents released under Access to Information re SPP
(5) Censorship by government about SPP s greatest on issues relating to energy resource issues
(6) “Quality of life issues” are involved
(7) Energy sovereignty being threatened and compromised

Virtually every point that Peter Julian made in his presentation on the negative aspects of the SPP afforded me with a segue into the topic of income trusts. I waited to hear the questions that others in the room where asking first before asking my question. The questions were being asked in groups of five or so questions and then answered by Peter Julian. I asked my question immediately following a question from a gentleman who was pointing out the “faith based” nature of the Harper government and a question from another gentleman about the recent rash of foreign takeovers. I started off by making the point that a large portion of the takeovers, $65 billion in the last 12 months to be precise, can be explained by the faith based tax policies of the Conservative government that are, in fact, being supported by the NDP. I also pointed out that the NDP themselves are practicing their own brand of faith based policies, as bad as those of the Conservatives, because the NDP are writing letters to their constituents that read:

“I am confident that government estimates of future tax leakage are solid”

I then held up the 18 pages of blacked out documents provided under the Access to Information Act and asked the four NDP MPs in attendance where they derived their confidence from, if not simply blind faith. Blind faith on a matter that can be factually determined..

Peter Julian attempted to respond to my question in purely partisan terms, describing how this or that was either the fault of either the Liberal or the Conservatives. I told him he was wrong and that the blame he is trying to lay at the Liberals feet had nothing to do with the Liberals and everything to do with the alleged insider trading activity undertaken by Serge Nadeau, Director General of Tax Policy in the Department of Finance. I then pointed out that the Liberals are to be commended for doing what the NDP are condemning the Conservatives for not doing in the case of the SPP , namely Public Consultation. I pointed out to Peter Julian that had it not been for Ralph Goodale’s public consultation round in 2005, we would never have known that Mark Carney and Company in Finance were leaving out the 38% of taxes that are paid by average Canadians who hold their income trusts in RRSPs.

I indicated to the audience that the $65 billion in takeovers will be costing all Canadians, since it is all tax paying Canadians who will pay for the loss of $2 billion a year in taxes, a figure that will soon rise to $7.5 billion a year. On the point being made about the SPP and sovereignty I pointed out that the NDPs support of this income trust tax has left the 20% of Canada’s oil and gas production that is held in trusts and the 80% of Alberta’s energy infrastructure held in trust s highly vulnerable to foreign takeovers Witness Abu Dhabi’s purchase of Prime West for $5 billion. This, Peter Julian shamelessly or perhaps naively attempted to blame the Conservatives for.

All of this to make one simple point. This was a meeting that took place in Hamilton with a roomful of people who were predominantly Labour, as evidenced by the fact that everyone referred to one another as “brother”. During the evening about 25 questions were asked. Two received applause, one of which was my question. Many in attendance came up to me afterwards to learn more. Therefore the issue of income trusts is not going away and even die hard NDP supporters are receptive to others like myself when we raise completely valid questions such as “where is the NDP’s proof of tax leakage?”

As such, the NDP is setting itself up if it goes into the next election without answers to these questions, as they can be assured that they will be facing these most embarrassing questions in most every all candidates meeting that are held in ridings across the country. The NDP need not wear this egg on their face, since they need only point to the source of the false tax leakage information: Mark Carney and his compliant cohorts in the department of Finance. No reason why the NDP can't look smart by exposing the fraud taking place in the Department of Finance on behalf of the CCCE. Failure on the part of the NDP to do so will prove politically costly. Over to you Thomas Mulcair. You are operating with a blank slate. No need to feel bound by the superficial understanding of this issue that was brought to bear by former NDP Finance Critic Judy Wasylycia-Leis. Better to embarrass her than to embarrass yourself and your entire party in the process. In fact, no one needs to be embarrassed as the source of the misleading information insn’t Judy Wasylycia-Leis per se. But rather Mark Carney and his false methodology behind alleged ax leakage. Meanwhile, The 2.5 million income trust investors will prove a formidable challenge to your party’s ambitions. Keep in mind, there only were 2.5 million Canadians who voted NDP in the last election which was the NDPs best showing ever

PS: I gave Peter Julian his own set of 18 pages of blacked out documents and challenged him to come back to me with the NDPs proof of tax leakage. Before doing so he might want to read the attached report entitled “Tax Revenue Implications of Income Trusts" which showed no tax leakage, and that was before Harper reduced corporate tax rates from 22% to 15%, the effect of which Dennis Bruce of HLB Decision Economics has determined has now made income trusts responsible for $200 million in NEGATIVE tax leakage per annum

One year after Stephen Harper's Income Trust Betrayal: The Top Ten questions still unanswered.

OTTAWA, Oct. 31 /CNW/ - Stephen Harper broke his election promise to never raid seniors' nest eggs through taxing income trusts, by doing that very thing on Halloween 2006. 365 days later, the following questions for Stephen Harper remain unanswered:

(1) Where is your government's proof of alleged tax leakage? 18 pages of blacked-out documents are all that you have provided to back up this claim.

(2) Why were the taxes paid by 38% of all outstanding income trusts held in RRSPs and pension accounts not included when evaluating possible tax losses to the government?

(3) Where is the promised transparency and accountability? Such a sweeping change in tax law should at the very least have involved public consultation.

(4) Why did the Department of Finance demand the return of the 18 pages of blacked out documents issued under the Access to Information Act?

(5) How could the proposed conversions of BCE and Telus into income trusts have had any effect on tax revenue when neither were paying taxes as corporations and were not expected to for several years?

(6) What policy advantage is there, now that BCE has been taken private through a highly debt levered buyout, and which has caused a loss of the $793 million more PER YEAR that BCE would have paid as an income trust?

(7) How is the stated objective of tax fairness and leveling the playing field achieved when government sponsored pension plans are allowed to own trusts, free of tax in their private equity portfolios, while 70% of individual Canadians are not? Why are government sponsored pension funds exempted both from the punitive 31.5% tax and growth restrictions of this policy? Furthermore, why does income splitting for seniors only benefit the 30% of Canadians with pensions, and not the 70% without? Why is this government deliberately creating a two-tiered pension system in Canada? Is this the government's response to the retirement time bomb of an aging population?

(8) Why was the 15% withholding tax paid by foreigners on interest on leveraged buyout loans reduced to zero as part of this same tax policy, at a cost to Canadians of $300 million a year? This special foreign tax loophole makes Canadian public companies more susceptible to leveraged buyout foreign takeovers, at the same time as the trust tax causes them to become grossly undervalued, because of the discriminatory nature of the tax, which only applies to Canadians and not pension funds or foreigners. As such the government has, in effect, introduced tax subsidies to encourage foreign takeovers. Why?

(9) What effect will the loss of $2 billion in annual tax revenues arising from the $65 trust takeovers to date (including BCE) have on the average Canadian taxpayer or Canada's social program spending? Will individual taxpayers be the ones to make up the shortfall? Once the entire sector is taken over by foreign private equity and government sponsored pension plans, the loss in annual tax revenues will rise to $7.5 billion, the equivalent of a 1.5% GST increase. What plans are in place to address this inevitable shortfall in light of all the other tax reductions contained in yesterday's fiscal update amounting to $60 billion. At what point will the cupboard be bare?

(10) Stephen Harper wrote the following in the National Post on October 26, 2005. "Income trusts are popular with seniors because they provide regular payments that are used by many to cover the costs of groceries, heating bills and medicine." If so, then why did he so abruptly and without notice or public consultation reverse his promise, leaving investors and seniors with losses of $35 Billion and their incomes reduced by 31.5% and in some cases 50%? How is this socially just or fair?

(11) Meanwhile, why is Jack Layton and the NDP supporting this policy when they profess to be against wholesale foreign takeovers of Canadian businesses and supposedly in favour of protecting seniors' dignity and seniors' retirement savings? Where is Jack Layton's and the NDP's proof of tax leakage? Is the NDP in possession of confidential insider information that would underlie the basis for the following claims contained in correspondence from NDP MPs to their many concerned constituents:

"I have spoken with the NDP party's Finance Critic, Judy Wasylycia-Leis, and she assures me that the government's estimates of future tax revenue losses, are solid."
Jack Layton

What is the basis for these assurances from Judy Wasylycia-Leis? Canadians are demanding of answers from both the Leader of the NDP and the Prime Minister of Canada on this cornerstone assumption.

Conclusion:

Taken as a whole, this is a travesty of democracy, starting with the breaking of a promise, the false premise for breaking the promise, the complete absence of consultation and the litany of adverse policy repercussions as the aftermath of a policy borne out of zero accountability and a complete lack of government transparency. All Canadians are adversely affected. Narrow special interests have successfully manipulated Canada's New Government for their selfish ends.

Alleged tax leakage is the cornerstone assumption behind this tax policy. It constitutes two of the five provisions of the Ways and Means Motion. The other three provisions of the Ways and Means Motion are verifiable constructs as well. Meanwhile transparency and accountability are the cornerstones of a democracy. The real danger to Canadians is that the Conservative Government is flagrantly undermining our democratic institution known as Parliament, if major tax laws are being enacted and passed on the basis of their foundations being assumed to be true, when in fact no proof whatsoever has been provided by the Government.

Dangerous Precedent:

This is an extremely dangerous precedent to have established, since it gives extraordinary powers to the Government to pass important legislation by invoking fact based arguments, that are devoid of fact based evidence. If this is allowed to occur under circumstances like these, then the risk for future abuse of our Parliamentary democracy under matters that are not verifiable in nature, is limitless.

Public Inquiry:

Stephen Harper together with Jack Layton, and the members of their respective parties are acting in concert to abrogate Canadians' democratic institution known as Parliament. As such, we are calling for a Public Inquiry, to fully examine the matter of alleged tax leakage, particularly in light of the Government's announced reduction in corporate tax rates by a staggering 32% from 22% to 15% in 2012. If the original policy intent on income trusts was to "level the playing field" with corporations, then this changed tax regime for corporations announced by the government yesterday, demands a re-examination of the extent to which these most recent measures will have tilted the playing field in favour of corporations and to the detriment of income trusts.

Furthermore, all Canadians need to establish whether Professor Jack Mintz was correct when he stated:

"I do want to point out that there is a serious flaw in some analyses especially on the taxation of pension and RRSP accounts. Finance was not right to treat the impact as zero".
Jack Mintz

This level of uncertainty over the central premise of tax leakage is significant and fails to meet the standards of the Auditor General, who states:

"Parliamentarians need objective fact based information on how well the government raises its funds (taxes)".

Until this standard is met, Canadians will never know whether the following policy measure of this new tax is fact or merely political deceit:

"strengthening Canada's social security system for pensioners and seniors" (Ways and Means Motion)"

Brent Fullard
President & CEO
Canadian Association of Income Trust Investors
www.caiti.info

For further information please contact the:
Canadian Association of Income Trust Investors
media@caiti.info or by calling (647) 505-2224

Source: CNW

NDP Complicity: How Jack Layton helped Stephen Harper destroy Canadian's RRSP savings.

com·plic·i·ty: Involvement as an accomplice in a questionable act or a crime. Source: TheFreeDictionary





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Jack Layton’s blind adherence to Harper’s tax policy helps promote the sell out of Canada

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Jack Layton is an enigma wrapped inside of a riddle. Jack Layton would be the first to call for an open and transparent government, much as he made an impassioned call upon the government to stem the recent wave of foreign takeovers of Canadian companies and to avert the surrender of our energy resources to U.S. interests. However, Mr. Layton need only look into the mirror to recognize a major source of these problems. Jack Layton’s support of the Conservative’s plan to tax income trusts is a major contributing factor to these recent events, making the NDP complicit in the sell out of Canada to foreign Big Business interests.

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