Garth Turner's revisionism on income trusts
Garth Turner tells an audience that it was the decision to tax income trusts that led to his ejection from the Conservative Party caucus. The problem is that this is not consistent with Garth Turner's statements at the time, the decisions he took after he was thrown out of caucus, and with the timing of events.
Garth Turner provides some insight into the circumstances of his break with the Conservative Party:
[The] working relationship [between Stephen Harper and Garth Turner] fell apart over the government's decision to impose a 31 per cent tax on income trusts. Transforming a company into an income trust allowed the company to lessen its taxes, and many companies were exploiting the loophole.
The day after the decision, income trusts melted down on the stock exchange, knocking almost 300 points off the TSX index. Individual investors lost an estimated $25 billion in equity.
Turner called the decision "the mother of all broken promises," since he stood next to Harper on the campaign trail last year when he promised to not impose a tax on income trusts.
This clears up some confusion. At the time, back on October 18, 2006, Garth Turner told us he was ousted from the Conservative caucus for a number of reasons, but income trusts was not one of them:
Ontario MP Garth Turner suggested Wednesday he was suspended from the federal Conservative caucus over some of his political views and not because he broke caucus confidentiality.
Turner, who represents Halton riding, said that at the meeting of the Ontario caucus Wednesday, the issue of caucus confidentiality was not discussed.
"The issue [was] my beliefs and policies," he said.
Turner has been at odds with the party on a number of issues, including the Tories' position on the Kyoto accord and a possible Defence of Religions Act, which would protect public officials who refuse to perform same-sex marriages.
Weird that today he is absolutely certain that income trust decision was the trigger, but it seemed completely off his radar on October 18.
Here's one possible reason -- the income trust announcement to tax income trusts happened two weeks after Turner's ejection, on October 31.
The decision of BCE to turn into the country's largest income trust forced that decision. But that decision was announced October 11, less than a week before Garth Turner was thrown out of caucus.
The BCE move did immediately put income trusts on the radar:
Still, as long as the tax advantage for income trusts remains, [Richard Powers, assistant dean at the Joseph L. Rotman School of Management at the University of Toronto] predicts more Canadian companies will rush to restructure in anticipation that Ottawa will eventually close the tax loophole.
"Many companies are trying to get in under the deadline. If they convert before the federal government changes the rules, they'll be safeguarded. It would be very difficult for Ottawa to impose a retroactive tax on those companies."
Given Powers prediction, Finance Minister Jim Flaherty moved fast. Two weeks after Turner was thrown out, for reasons that didn't include the internal debate on income trusts that was being reported in the news, the decision was announced, and the plan included features like income splitting for seniors to help cushion the impact.
Now an independent, Garth Turner had an opportunity to vote against the motion, but he did not. Garth Turner supported the taxation of income trusts, both because it was responsible taxation policy and because of the income splitting:
As stated, reforming the trust business and stemming the tide of conversions is necessary for the long term health of the economy and to ensure the feds keep raking in corporate taxes.
[W]rapped up in this vote is a nice little tax cut for all seniors, and the ability of all pensioners to split income for tax purposes. This is something I've been fighting for over the course of months, and which is a major change in the country's tax policy.
To be clear, Turner still wasn't happy. He continued to insult the PMO over the "necessary" decision. But he doesn't say that this was the reason he was thrown out of caucus. Indeed, he doesn't even say he had inside knowledge of Flaherty's plans. As far as we can tell, he learned of the decision to tax trusts on October 31 along with the rest of us. Even as he rails against the decision to tax trusts, a decision he explains he will support in Parliament, he still suggests it was his propensity to disgree publicly with the government that led to his ejection:
You see, I try not to lie. At it turns out, political life would have been less of a bitch for me if I'd just lied in a February media scrum and said I supported the appointment to cabinet of a floor-crossing Liberal. Piece of cake. But I didn't, and look at my sorry state now.
You can't disagree publicly with a decision that wasn't public yet (and might indeed not have been taken yet).
Back in the fall of 2006, Garth Turner said he was thrown out of caucus over issues like Kyoto and gay marriage and, in particular, for being public with his disagreements. It was Garth Turner's propensity to openly disagree that the Conservatives also quoted in their decision, so in that, they agreed. Today, however, Garth Turner says it was a decision to tax income trusts, a decision which he ultimately supported as an Indepedendent, a decision that might not have been finalized for a fulll two weeks after he was thrown out of caucus, a decision that was precipitated by events that occurred only days before he was told to get out and could not have been a long-standing irritant, was the issue that led to his ejection.
Nah, it doesn't wash.
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Comments
Ah, the machinations of the befuddled mind of Garth Turner, how can he keep up with it? It appears he's created himself a maze and got lost in it.
Posted by: Libby at June 9, 2007 08:05 AM
Garth Turner? Just another disgruntled Liberal. Heh.
Posted by: Twolane at June 9, 2007 09:57 AM
Nice story, Angry, but what you attribute to me did not come from me. It was a media report. Too bad you wasted all those fine words.
Garth
Posted by: Garth Turner at June 9, 2007 02:16 PM
Geez, I thought those poor MPs were so overburdened with committees and other duties that they hardly had time for their own families.
So how come Mr. Turner has time to roam the blogosphere?
Or is he so hungry to see his name ANYWHERE that he seeks out any reference to him?
Posted by: AnnieNoMouse at June 9, 2007 02:34 PM
And where does Garth Turner show us that he, at the time, disagreed with the 'media report'? Hmmm?
The media didn't, at the time, say that Turner was turfed because he disagreed with Income Trusts. Why didn't Turner complain about the media back then? Hmmm?
The media did, at the time, state that Turner was turfed because he didn't maintain caucus confidentiality.
If Garth Turner's statement that he was turfed because he disagreed with Kyoto and gay marriage - and Turner is now saying that this was/is untrue; that it was a 'media story', then, why didn't he complain back then - and inform us 'back then' - that it was really, all about income trusts. Hmmm?
Posted by: ET at June 9, 2007 04:18 PM
Garth Turner is a shameless self promoter who will change his story to suit whatever new circumstances emerge. The trust story has gained and retained traction (thanks to over a million burned investors) which he and the Cons didn't expect.
A few basic facts are in order:
1) The Harper campaign pledge not to tax trusts was a flat out lie. The pledge was about as unequivocal as any I've ever heard.
2) The prospect of large companies (BCE Telus) converting to trusts was a well known possibility which had been raised during the Liberal government's review of trust policy well before Harper's promise. He knew this was a real possibility.
3) Flaherty has said that he did "what the Liberals should have done" except, before the election he was as unequivocal against a new trust tax as Harper. Which is it Jimmy boy?
4) Harper has failed to backup his claim about 'tax leakage' releasing some heavily blacked out document. Several private sector economists (including RBC) have since debunked this claim.
5) The ostensible immediate excuse for the new trust tax was to prevent BCE from converting. Well, it's done that. Instead of becoming a trust, owned by Canadians, who would pay income tax on their trust income, BCE will instead be acquired by some pension funds financed by a US private equity firm. The usual modus operandi of private equity is to load up the target company with debt so to extinguish most if not all tax liability. Cash flow can then be stripped from the target and removed to the US free of any Canadian tax. The Canadian pension funds pay no tax, plan members do on their pensions, which is the same treatment as would have been the case had BCE become a trust. In short, instead of all BCE income being taxed in Canadian hands as a trust, maybe half will be taxable. Now that's tax leakage.
Harper's "New Government" is about as new as Jean "I will kill da GST" Chretien's or Dalton "no new tax" McGuinty. New government, new lies. This long time Tory will be voting Liberal.
da prince
Posted by: da prince at June 9, 2007 04:19 PM
Turner's defence; "I told a reporter a bunch of revisionist horseshit, and the reporter repeated it, and I reprinted it without comment, correction or clarification . Therefore, I have no responsibility for it." You can explain the concept of honesty to this guy until you're blue in the face. He still won't get it.
I told him the same thing on his blog. Of course, he declined to publish the comment.
Posted by: lgarvin at June 9, 2007 04:38 PM
The usual modus operandi of private equity is to load up the target company with debt so to extinguish most if not all tax liability.
It doesn't extinguish the tax liability - it transfers it to the creditor, who earns taxable interest income. You will note that for this to be of any benefit to the private equity provider, they (or a related party) have to be that creditor - otherwise, they are just funnelling all the cash flow (the original attraction of the target company) to an outsider.
Posted by: DCardno at June 9, 2007 05:10 PM
"it transfers it to the creditor, who earns taxable interest income."
It reduces or extinguishes corporate tax liability. The resultant debt interest *would* be taxable in individual Canadian investors hands except the debt wont be held by Canadian investors, it will be held by US private equity and Canadian pension funds. The pension funds are tax exempt. And thanks to Jimmy boy who removed the withholding tax on interest paid to US investors, the US private equity folks will get their interest income free of Canadian tax. But they will pay US tax of course. The IRS is the big winner in Flaherty's "Tax Fairness Plan".
Posted by: da prince at June 9, 2007 05:57 PM
Well "da prince", it appears your either a lying Liberal or you prefer Liberal lies to Conservative "lies".
No responsible citizen who cares about what this Country was built on and Stood for would vote Liberal at this time.
You gotta be da Garth.
Posted by: Libby at June 9, 2007 05:58 PM
Why bother with Garth, he is as important in the political reality of Canada as a sundial in a closet.
What bugs me on Turner is that he bragged about his digital democracy as opening a new frontier, when it is really just his way of attracting attention to himself.
Garth is like a male Paris Hilton, except he is possibly even more boring.
Gus
Posted by: BlackKnightGus at June 9, 2007 06:07 PM
"you prefer Liberal lies to Conservative "lies"."
No Libby, I punish lies. So I will will be voting Liberal federally and Conservative in the Ontario election.
"You gotta be da Garth."
Go back and read the first paragraph of my first post. But at least you agree that Harper/Flaherty did lie, that's a start.
Posted by: at June 9, 2007 06:10 PM
Wow, talk about creative, "da prince" then no name, sounds a lot like da Garther caught spreading himself too thin.
First paragraph, first post was a nice try at a cover.
I've had enough Liberal lies and corruption, so won't be joining da Garth in the Librano fold. I'll give the Conservatives some slack, they've a long way to go to reach the depths of Liberal depravity.
Posted by: Libby at June 9, 2007 06:59 PM
"Wow, talk about creative, "da prince" then no name"
Not used to this blog, hit 'post' to quickly. Anyway, you don't have to be Garth Turner to be angry at the Tories, losing thousands of dollars of retirement income will do that quite nicely. But this is foreign to you, you don't sound like you work or invest. Paris Hilton maybe?
Posted by: da prince at June 9, 2007 07:14 PM
If I was Garth..I would sell my house, business and run away to a place where no one knows me.
Posted by: ZiLLa at June 9, 2007 07:17 PM
" ... losing thousands of dollars of retirement income will do that quite nicely. But this is foreign to you, you don't sound like you work or invest."
Unlike Garth Turner, I'm no investment guru, but ...
1. "Don't put all your eggs in one basket" seems to have been ignored by all those who claim to have lost in the 100's of thousands. Why didn't they heed financial advisors' advice?
2. There was a spike upwards in November of 2005 when Ralph Goodale announced no changes to income trusts.
http://www.cbc.ca/canada/story/2005/12/28/incometrusts051228.html
"Trading in many trusts and dividend-paying stocks became much heavier than usual in the hour or two before the market closed on Nov. 23, and share prices rose sharply."
AND http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20051207/whistleblower_incometrusts_20051207/20051207?hub=TopStories
"But, some of those stocks jumped inexplicably late in the afternoon, hours before Goodale told the Canadian public anything about his plan. CTV found more evidence of a possible leak than just that jump in trading"
Then there was apparently a plunge with the Conservatives' 2006 announcement of changes.
http://www.cbc.ca/money/story/2006/10/31/flaherty.html
"Trusts that begin trading as of Wednesday or later would face the new measures in 2007. Existing trusts would have a four-year transition period and would not face the new rules until 2011. ...
One class of trusts — real estate investment trusts — will not be affected by the new rules."
Maybe the 2005 spike and the 2006 plunge just cancelled each other out. You know, what goes up must come down. And the alleged 25 BILLION $ loss is just more inflated Liberal hype to discredit Flaherty's move on the trusts.
Posted by: Gabby in QC at June 10, 2007 01:02 AM
" ... losing thousands of dollars of retirement income will do that quite nicely. But this is foreign to you, you don't sound like you work or invest."
Unlike Garth Turner, I'm no investment guru, but ...
1. "Don't put all your eggs in one basket" seems to have been ignored by all those who claim to have lost in the 100's of thousands. Why didn't they heed financial advisors' advice?
2. There was a spike upwards in November of 2005 when Ralph Goodale announced no changes to income trusts.
This info is from the CBC site (The spam filter won't let the links through):
"Trading in many trusts and dividend-paying stocks became much heavier than usual in the hour or two before the market closed on Nov. 23, and share prices rose sharply."
AND this info. from the CTV site:
"But, some of those stocks jumped inexplicably late in the afternoon, hours before Goodale told the Canadian public anything about his plan. CTV found more evidence of a possible leak than just that jump in trading"
Then there was apparently a plunge with the Conservatives' 2006 announcement of changes.
Another quote from CBC:
"Trusts that begin trading as of Wednesday or later would face the new measures in 2007. Existing trusts would have a four-year transition period and would not face the new rules until 2011. ...
One class of trusts — real estate investment trusts — will not be affected by the new rules."
Maybe the 2005 spike and the 2006 plunge just cancelled each other out. You know, what goes up must come down. And the alleged 25 BILLION $ loss is just more inflated Liberal hype to discredit Flaherty's move on the trusts.
Posted by: Gabby in QC at June 10, 2007 01:07 AM
My apologies for the double post. I got an "error" message the first time, ergo the second one.
Posted by: Gabby in QC at June 10, 2007 01:09 AM
"da prince":
Who is Paris Hilton?
Posted by: Libby at June 10, 2007 05:46 AM
Income Trust fiasco started with Goodale and he's anything but squeaky clean in spite of his slicked down look. His insiders started the big rush to invest. Let's also toss in the little weasel named Brison. The investors certainly weren't POOR old grannies and grandpas.
Other than the greedy hordes and Liberals out to play politics, it's agreed Flaherty did what had to be done. It's a no-brainer.
Posted by: Libby at June 10, 2007 02:59 PM
Right on Gabby.
Anyone who knows anything about investing knows that you don't have a loss or gain until you sell. I have a friend, a senior, who had most of his investable assets in one energy trust and he didn't panic and bail. He is now at the same value as he was before and got all the distributions in the meantime.
He is looking to diversify now as he has learned his lesson about being over exposed to any one sector.
It's too bad the politically motivated in this country couldn't at least exhibit a little honesty when blathering on about Trusts.
The only reason the Liebranos backed off when they did is they knew they would lose votes in the coming election, so they tipped off thier friends and now howl about what a terrible decision the Conservatives made. If Goodale didn't have to face the voters, does anyone honestly believe he would have backed off........I didn't think so and that includes you Garth Hilton, you two bit phony!
Posted by: Capndan at June 10, 2007 03:42 PM
Garf is no more of a tool than the other parliamentarians, he's just more loquacious and unguarded in his lies and hypocrisy, so it's easier to catch him out.
The issue here is not that Garf isn't a straight shooter, it's not that Harper was a flip-flopping liar about income trusts, or that Liebranos tipped off their friends, and it's not that the tax policy with respect to income trusts versus ordinary investments was unfair. The issue is that government is grabbing hundreds of millions of dollars of other people's money on the basis of a lie - that nanny knows best. And the victims are so distracted by the noise of elected government parasites bickering over "who said what to whom" that they can only perceive the minor crimes of fibbing and hypocrisy and no longer take any notice of the major crime of theft.
Posted by: at June 10, 2007 08:41 PM
In response to Zilla -
Funny that you would make a comment like that since Garth IS in the process of selling his house & business. Here is the link: http://www.georgeandtoni.com/ActiveListings.php
Posted by: at June 10, 2007 09:38 PM
Lying to Canadians on income trust taxation is not Harper's and Flathead's only shtick :
"An angry Nova Scotia Tory Premier is urging the two remaining Conservative MPs from his province to vote against the Harper government's budget because of a fight over oil money... Mr. MacDonald plans to appear before the national news media to make his case. There are national consequences, he said, if the federal government can rip up agreements with provinces." - G&M web site. Is there a pattern here?
da prince
Posted by: da prince at June 10, 2007 11:23 PM
Harper's lie that started it all reminds me of an old movie script:
Taxing Income Trusts, a Canadian tragedy starring Steve ‘The Lyin King’ Harper and Jim ‘It’s Not My Fault’ Flaherty. Produced by the Conservative Party of Canada, this film noir lays bare the sordid lies and deceit of a political party desperate to get elected by any means, and once elected, to stay in power at any cost. Cover-ups, more lies, anything goes!
It was filmed in Ottawa with a cast of over one hundred meekly compliant extras from all parts of Canada, and supported by groupies from the Bad Actors Guild, otherwise known as the New Demented Policies (NDP) Group.
Watch for it soon at a polling station near you.
Posted by: Tory in Alberta at June 11, 2007 01:10 PM
"Harper's lie that started it all reminds me of an old movie script"
And reminds me of a recent TV series:
Stevie's mob budget,
Some extra bling for Quebec but the Atlantic Accords sleep with the fishes. Stevie Soprano whacks income trust investors and now all of Atlantic Canada gets hit; while Jean 'fat Johnny' Charest counts his swag. Stay tuned for the next episode, Stevie goes to court. This series ain't over unfortunately.
Posted by: da prince at June 11, 2007 01:32 PM
“The income trust decision I will have to live with forever," Mr. Flaherty says.
This quote was in a self serving Flaherty puff piece in the National Post entitled ‘I even cut my own 4 acre lawn’.
However, Flaherty does not have to live with his decision (debacle). WE DO. His fellow Canadians who are incrementally poorer because of him have to live with this decision. We can run the old car a year longer and put off having the roof repaired. We can explain to our families that things got a little tougher because of our own Finance Minister. Flaherty doesn’t have to explain to his wife that he trusted the word of Harper. They, both being politicians, knew better than to trust the word of someone running for political office.
A finance minister who guts the finances of his fellow Canadians.
A finance minister who then refuses to provide any numerical rational to justify his action. Except for 18 blacked out pages.
A finance minister who is so afraid of open debate on the subject that he buries the ways and means bill inside a budget. Any party member who questions this budget is silenced. Any party member who votes against this budget for any reason is tufted.
A finance minister who tries to guarantee passage of that budget by bribing a separatist party with money from the rest of Canada.
This finance minister will have a fine legacy. Liar, thief and out of office.
Posted by: Dwight at June 11, 2007 05:33 PM
I've heard and read many allusions to losses because of the income trust decision. Just to make things clearer in my mind, would those of you who have posted here that their portfolios have been very adversely affected give us some concrete figures?
Something like this:
1. The value of my portfolio on Nov. 22, 2005 was $_______
2. The value of my portfolio on Nov. 25, 2005 was $_______
3. The value of my portfolio on Oct. 31, 2006 was $_______
4. The value of my portfolio today is $_______
On the other hand, forget it. I doubt it would be any more truthful or accurate than before.
Posted by: Gabby in QC at June 11, 2007 11:23 PM
Conservatives on a conservative blog defending tax hikes. You've got Jack Layton in your corner, that should tell you something if you had half a brain. The Liberals are loving this!
Posted by: da prince at June 12, 2007 05:29 AM
"Conservatives on a conservative blog defending tax hikes."
No, more like conservatives on a conservative blog defending tax fairness and truthfulness, which seems to be a concept foreign to liberals.
Posted by: Gabby in QC at June 12, 2007 07:19 AM
Double taxing trust income earned in Canadians' registered retirement plans is "fairness" and lying about your intention not to do so is "truthfulness". George Orwell come on down.
Posted by: da prince at June 12, 2007 07:45 AM
Gabby, since you like repeating Flaherty's "Fair Tax" press release so much might I suggest some alternative reading, you know, to broaden your outlook a little. Try a visit to the Canadian Assoc. of Income Trust Investors web site. Go to the section titled "Income Trust Mythbusters". You might learn something:
http://www.caiti.info/
Posted by: da prince at June 12, 2007 08:03 AM
How about we don't. That organization is about as partiszan and misleading as they come.
Posted by: paul m at June 12, 2007 09:28 AM
BTW, I wonder where they're getting all the money to PAY for those billboards? Especially considering they supposedly lost SO much money.
Maybe our resident enlightened benefactor da prince can help us out on where they get their funding????
Posted by: paul m at June 12, 2007 09:43 AM
"How about we don't."
I suppose ignorance is bliss for some people, partisan and misleading statements by Flaherty aside. And for transparency there's Flaherty's study of "tax leakage" all 18 blacked out pages.
Posted by: at June 12, 2007 10:04 AM
I'll bet you all dollars to donughts that this "CAITI" was set up by traditional Liberal supporters who saw the Income Trust issue (which Turner voted for) as an opportunity to attack the Conservatives.
By spending money on CAITI they can "invest" (pardon the pun) in trying to damage to the Conservative party while not being held back by the new federal party campaign contribution restricitions.
Remember, under the new law, Canadians can only donate a fraction of what they could before, to political parties. The Liberals were used to getting their donations from large corporations and big business types like the Stronachs (one of the reasons they are now hurting for cash).
This CAITI now gives those previous Liberal bank-rollers an avenue to pump their cash somewhere where they can continue to help the Liberal party.
I would love to see an audit done of this organization to see where their funding comes from!
Posted by: paul m at June 12, 2007 10:07 AM
"where they get their funding"
I sent in my $200 (not deductible). A few hundred thousand other investors do the same and pretty soon you've got some billboards. Pales in comparison to having access to the federal treasury though.
Posted by: da prince at June 12, 2007 10:11 AM
Liberals are so cute when they post on conservative blogs.
Posted by: Halton Proud at June 12, 2007 10:12 AM
"I'll bet you all dollars to donughts that this "CAITI" was set up by traditional Liberal supporters who saw the Income Trust issue (which Turner voted for) as an opportunity to attack the Conservatives."
If you take the time to go to the CAITI site you can see the list of founding members, companies and individuals, and decide for yourself who they support. You will see that most of the companies are in the investment industry. If you know any of the history of this issue (you don't seem to) you would know that IT investors and companies in the industry were strongly against the Liberal plan to tax trusts and pro-Conservative when they came out against any new tax WHICH THEY DID. Are we for the Liberals now with their pledge to roll back the tax, you bet, no secret there.
"I would love to see an audit done of this organization to see where their funding comes from!"
Why should they be audited? They don't accept government money or issue tax receipts. Go to the site, tell me if you find any 'vote Liberal' material. Government threatening audits of groups opposed to its policies, part of Canada's New Government?
Posted by: da prince at June 12, 2007 10:38 AM
"Liberals are so cute when they post on conservative blogs."
But not as much fun as watching "Conservatives" flail around as they defend a tax hike policy supported by 'Taliban Jack' Layton.
Posted by: da prince at June 12, 2007 11:03 AM
Hey da prince, I was wondering why I haven't seen you on any of the other posts Angry's made?
Could it be because you're commenting from Garth Turner's office? Esther perhaps? Or maybe even GT himself?
Posted by: who's "da prince" at June 12, 2007 03:38 PM
" Are we for the Liberals now with **their pledge** to roll back the tax, you bet, no secret there."
Oh oh, don't hold your breath ... Wage & Price controls, GST, Free Trade ...
-----------
"Could it be because you're commenting from Garth Turner's office? Esther perhaps? Or maybe even GT himself?"
Hmmm, intriguing ... who else would anoint himself as "da prince"? You may be on to something.
Posted by: Gabby in QC at June 12, 2007 03:55 PM
Who's da prince? I thought Conservatives were well read. It refers to the book The Prince by Niccolo Machiavelli, 1532.
According to Machiavelli, moral principles must yield to every circumstance, especially in such cases where sordid, inhumane actions may be required. It is imperative that the prince be willing to do anything necessary to maintain power. - Wikipedia
Describes Harper to a T. The "da" harkens back to da boss. In other words boys and girls, da prince Harper ain't much different from da boss Chretien. They are both liars and thugs.
If I were muti-millionaire Barf Turner do you think I would be spending so much effort defending the interests of a bunch of middle class income trust investors rather than promoting myself? Barf is too vain to post under an alias. Paraphrasing John Kerry, Garth was for taxing ITs before he was against it. He saw the issue had legs and decided to glom on. He is a side show.
As posted up thread, I am a long term (30 yrs) Tory voter and one time party member. I just decided that I was tired of politicians telling bald face lies to get my vote, this lie has cost me money which clinched it. When the Libs were in office I was active in opposing Goodale's plan to impose a new tax on trusts. I contributed several hundred dollars to the Conservatives when they came out four square against the trust tax. I got suckered, as did hundreds of thousands of investors. Now it's pay back.
Posted by: da prince at June 12, 2007 04:45 PM
"Oh oh, don't hold your breath ... Wage & Price controls, GST, Free Trade ..."
You may be right Gabby. And if that happens then up go the billboards again.
Posted by: da prince at June 12, 2007 04:53 PM
Now, I always thought that the reason Garth got the boot was because it had been decided in Cabinet that the income trust position was going to have to change; that, because this undercut an election platform plank, it would have to be disclosed and discussed with caucus; and because everybody knew that Garth could not be trusted to keep it quiet, so he had to be gone from caucus first. In that sense, then, he has a point, although not one that I think he'd really want.
Posted by: ebt at June 12, 2007 05:22 PM
" ... this lie has cost me money which clinched it. ..."
I'm sorry, but I still maintain whatever losses you may have incurred because of the changes were offset by the gains made after Goodale's announcement.
Furthermore, (from the CBC website):
« "Nothing changes for four years," he said. "They'll continue their distributions to their unitholders over the course of these four years." ...
Existing trusts would have a four-year transition period and would not face the new rules until 2011. ...
One class of trusts — real estate investment trusts — will not be affected by the new rules. » (CBC website)
People who hold those trusts, then, will continue receiving distributions until 2011. I may empathize with you for some of your losses, but the health of the country's finances are paramount.
You chided another poster, saying that person was probably not an investor. But you must not have been investing for too long yourself, if you put ALL your assets into trusts. Yours is not the only portfolio that has experienced a downturn.
There have been meltdowns in people's portfolios before.
Remember 1987?
And the tech bubble bursting in 2000?
If people are not cautious enough to diversify, then, they have to take the downs with the ups.
Posted by: Gabby in QC at June 12, 2007 07:18 PM
On an aside, has anyone else noticed that "National Newswatch" has taken a sharp turn to the left in the articles it posts? Or am I dreaming?
Posted by: Paul M at June 12, 2007 08:54 PM
"if you put ALL your assets into trusts."
I never said I put all my assets into trusts, far from that. As an investor for over 25 years I am willing to accept market risk. I watch my diversified portfolio bounce around by thousands every day without losing sleep. The tech melt down was a market phenomenon not a political act, no complaint. What I am not willing to accept are lies told by my elected politicians which directly impact the financial markets and well being of hundreds of thousands of Canadians. That is the stuff of third world dictators.
"'m sorry, but I still maintain whatever losses you may have incurred because of the changes were offset by the gains made after Goodale's announcement."
You're a little confused here: When Goodale announced his trust review the trust values TANKED by roughly 20%. When he backed away from the tax idea the market recouped that loss. So there was no net gain for trusts from that episode. When Harper announced his tax the market again tanked about 20%, it has since come back about 10% largely due to the fact foreign private equity has been buying up trusts. More foreign ownership thanks to Harper's "Fair Tax" policy (see my next post).
"People who hold those trusts, then, will continue receiving distributions until 2011."
And we will continue to receive distributions after 2011, minus the new 31.5% tax. Let me remind you, that unlike politicians and civil servants, 70% of Canadians don't have defined benefit pensions. We rely to a large part on our RSP investments of which trusts were an attractive alternative to low yielding bonds or GICs for middle income Canadians. When an elected official decides he is going to remove a chunk of your retirement income after promising not to your going to notice. Is it a disaster, no not for most of us. But it will have negative consequences for many. I know of people who had planned to live out their retirement in their home of 40 years who will now have to sell their house in 2011 and move to an apartment. Are they going to fight back, you bet.
"but the health of the country's finances are paramount."
If it was paramount nine months after the election why was it not paramount before the election when Harp/Flat made their solemn pledges? (Notwithstanding the possibility of some large trust conversions, well understood from the Goodale review.)
You have accepted the government line fair enough. (What tax raising politician hasn't said 'it's for your own good'.) Now if you could just get Jimmy to release his entire "income trust tax leakage" study without blanked out pages we might have an honest debate on that point.
Posted by: da prince at June 13, 2007 06:25 AM
TRUST TAX LINKED TO PRIVATE EQUITY BUYOUTS - Globe&Mail 13 June
"Private equity firms generally find it difficult to compete against the income trust alternative, said an Oct. 30, 2006, memo sent to Bob Hamilton, senior assistant deputy minister of tax policy at the Finance Department."
"For anyone at Finance who knew the trust tax was imminent, one conclusion that's easily drawn from the memo is that taxing trusts out of existence would likely usher in even more private equity buyouts by Canadian and foreign investors, which is what happened."
Paramount for the country's finances? You folks can mull this over, I am away on business for a week. BTW, the latest Decima poll has the CPC trailing by three points.
a bientot
Posted by: da prince at June 13, 2007 06:36 AM
" ... I am away on business for a week...."
Bon voyage!
Posted by: Gabby in QC at June 13, 2007 10:58 AM
 
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