C A I T I - O N L I N E - M E D I A

CAITI members are seeking effective advocacy from the Liberal Party

2009-07-06T14:05:00.000-07:00

74% of Canadians think the Liberals need to pick up the ball and run on the income trust issue. This is an issue that effects thousands of Canadians, many of them depending on their income trust distributions to pay their bills in their retirement years. Stephen Harper's Conservatives need to know that their policy of "Lie. Conceal. Fabricate." has no place in Canada

Poll question and results:

I will support that federal political party, based on their "Income Trust taxation" policy:

Provided the party provides a clear and public statement in favour of returning the taxation to pre-October 31, 2006 levels AND seeks to expose Harper’s policy lie about tax leakage. 62%

Although a clear and public statement is not required on this issue for me to support a federal party. I do believe returning the taxation to the pre-October 31, 2006 level is required. 12%

I support Stephen Harpers "Income Trust taxation" policy which mandates an additional tax of 31.5% on Jan 1, 2011 and the double taxation of RRSPs, but not pension plans. I plan to vote Conservative. 27%

Related:
The Income Trust Issue is ranked # 2 on the Liberal OnProbation website. Review the Tax Fairness Plan and tax on Income Trusts - OnProbation.ca

Canadians continue to distrust Harper and the Conservatives

2009-05-16T15:40:00.000-07:00

"Notwithstanding Ignatieff's poll numbers, where he's seen as competent and popular, what our polling and focus group testing shows is that people really don't have a solid impression about him. They generally like the guy, but they don't really know anything about him. According to our polling, he's an unknown quantity in the eyes of Canadians. So, since people don't have a locked in, fixed impression about him, there's still a tremendous amount of opportunity to influence what people think about the guy," the Conservative source told The Hill Times in a not-for-attribution based interview last week. The Hill Times, April 6, 2009

Poll results:

After observing 3+ years of Harper Conservative minority government, in your opinion:

I have learned enough about Harper and the Conservatives and do not trust their leadership.

83%

I have learned enough about Harper and the Conservatives and continue to trust their leadership.

17%

Related:
PollingReport.ca/ - Latest Poll Results

CAITI poll results: 76% of Canadians think Ignatieff is the most competent and trustworthy leader

2009-04-09T09:39:00.000-07:00

Which party leader has performed in the most competent and trustworthy way during the post October 2008 election period?

Stephen Harper 16%

Michael Ignatieff 76%

Jack Layton 8%

Related:

Flaherty on the recession - Youtube

89% believe Stephen Harper's offer to Chuck Cadman constitutes an attempted bribe of a MP

2009-03-13T20:37:00.000-07:00

In an interview with journalist Tom Zytaruk, Stephen Harper stated:

"But the, uh, of the offer to Chuck [Cadman] was that it was only to replace, uh, financial, uh, considerations, he might lose due to an election."

In your opinion, do you believe the offer that Stephen Harper was describing, constitutes an attempt to bribe an elected Member of Parliament, Chuck Cadman?

Yes 89%

No 11%

Articles related to Chuck Cadman, bribery and Stephen Harper - CAITI

Photo by Rick /Flickr

BNN - Income trusts draw strong opinions

2009-02-17T11:14:00.000-08:00

Posted by Viewer response on February 4, 2009

Michael Kane's piece on income trusts -- Trust youself? -- received some strong responses from readers. Here are three that are representative:

Harper used an ICBM to kill the trusts when only a hammer was sufficient. All he had to do was halt the formation of business trusts thereby grandfathering the existing ones. He allowed the continuance of REITs but not the energy trusts, which form a key segment of the energy sector just like REIT's do in the real estate sector. His decision was flawed at the time he made it and remains flawed today.

The facts are:
The owners of trusts in non-registered accounts pay tax on the distributions they receive except for the return of capital component.
In many cases, including BCE, corporations, although they are eligible to pay tax, pay little if any because of their ability to effectively use their write-off capacity.
The energy trusts are an integral component of Canada's energy business. They provide an option for keeping lower producing assets active rather than having them abandoned. Penalizing the energy trusts in effect means penalizing the economy through the loss of jobs directly and the loss of business in the hospitality sector in the small communities in the West.
No credible proof has been produced by the Dept. of Finance that trusts represented a loss of tax revenue for Canada. In fact there are several reports that show tax revenue from trusts is greater than the tax would be if these trusts were corporations! An example would be BCE.
Given the above, rescinding the trust tax would increase tax revenues, create jobs and be stimulative to the Canadian economy.

So you can easily see where we would be much better off today if Harper had not imposed the trust tax.

R. Staple

I'm astounded (but not entirely surprised) at your comments re income trusts. You show a complete lack of knowledge on the subject. You continue to foster the false notion that trusts enjoyed some tax advantage.

"WAKE UP AND SMELL THE COFFEE, MICHAEL" There was no tax leakage. A couple of years ago Flaherty mused that he didn't know where all the tax money was coming from!! Let me tell you, I paid in excess of 30K taxes in '05, '06 and '07. This fiscal year I will probably get a refund.

The mental midget ripped 200K out of my retirement portfolio and thinks this will have no impact on the Canadian economy.

Yes, I'm properly diversified and, yes, I understand the risks of investing. What I fail to understand is a change in regulations that results in no net benefit for anyone, not the Income trusts, not other companies, not the Canadian taxpayer. Absolutely no one is better off as a result of this ridiculous policy.

If there was a concern that large companies would convert to the trust structure why not just put a moratorium on new conversions until the problem was properly studied. Never mind the fact that our illustrious PM clearly stated that he would not TOUCH income trusts.

This has been the most unfair legislation that has ever been passed in the history of the financial world. I know I'm not alone. Thousands of people just like me have lost billions out of their portfolio, have had their lifestyle severely impaired.

We need an advocate to champion our cause. HOW ABOUT IT? Speak up for the powerless, maligned investors.

W. Kozan

Many companies flourished and created thousands of tax paying jobs as a result of the income trust structure. Look around at the many successful businesses built up under the trust model. The cash flow passed on to investors was largely taxed at higher rates than corporations pay.

Many of these trusts have now gone into the ownership of pension funds. Perhaps the government needed to do something to clarify the "rules." Perhaps "ordinary" small Canadian investors shouldn't be entitled to own companies without being subject to double taxation.

But I doubt very much that putting a stop to income trusts has done anything to keep the federal budget from going into a deeper deficit. Harper and his toy bulldog finance minister can take that blame themselves. But don't fret for them. Their golden parachute pensions will be safe and will guarantee they'll never have to risk a penny on the "markets."

J. Stuart

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

2009-01-28T07:32:00.000-08:00

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!!!!

Scrap the tax

2009-01-23T20:37:00.000-08:00

Published: January 23, 2009 4:00 PM
Updated: January 23, 2009 5:44 PM

With increasing job and stock market losses and decreasing home values, Canada needs positive and sustainable economic changes. I’ll gladly accept the interest rate cut you’re going to hand out next week but can’t help but think of other measures that could be taken that would provide Canadians with economic benefits that are more sustainable.

It seems almost all ideas about how to best stimulate our economy have been focused around the creation of new monies.

We all know that it was artificially low interest rates, and therefore excess new money creation (read: inflation), were one of the main reasons we are in the economic mess in the first place.

Creating even more new money to solve the problem of excess money creation will only be a band aid fix at best. The cocaine addict feels better moving to heroin but still has to pay the ultimate price sometime, ie: it’s not a sustainable fix.

I feel very strongly that eliminating the proposed new tax on income trusts would go a long way towards sustainable and positive economic growth.

Aside from putting more money in the pockets of Canada’s largest demographic, allowing income trusts to operate as they did would allow the small to mid-sized companies that make up the majority of the income trust space to grow and create new jobs.

It is very tempting at this point to go over all the sketchy details surrounding the proposed income trust tax that don't make sense.

I won’t go into detail here but, these are just a few of the concerns:

BMO Capital Markets study showing income trusts create more than twice the tax revenues compared to corporations

Lost capital gains, increased capital losses and lost distributed income taxes not reported

Most of the 18 pages of the government document showing apparent tax leakage being blacked out even though the document was requested under the Freedom of Information Act

The misrepresentation that Stephen Harper gave in his campaign to not tax income trusts

Regardless of those facts and many others, the question becomes: what can we do here and now to stimulate our economy, while preferably not creating even more inflation?

Providing Canadian retirees and pre-retirees with a sustainable source of monthly income that is generated from Canadian companies, that in turn would create more jobs and therefore an economic circle that would allow Canadians to take care of Canadians makes nothing but sense.

On behalf of all our clients and all investors across Canada I implore you to eliminate the proposed ‘Tax Fairness Plan’.

Canada is still one of the best countries in the world but I’m sure many around the world have joined Canadians recently in scratching their heads over decisions made over the last few years with our income trust debacle, Alberta royalty taxes and proposed coalition government etc.

Dramatic changes can only happen under dramatic circumstances.

These are dramatic times and I therefore propose a challenge to all Canadians: Write your local MLA’s, write your party leaders as well as the Finance Minister and Prime Minister.

Income trusts should never have been taxed in the first place but, unless we the people do something about it by taking action, nothing will change.

Trevor J. Perepolkin

ABCP Smackdown: Mark Carney vs Jim Flaherty

2008-12-18T15:29:00.000-08:00

CAITI Online Poll On Asset Backed Commercial Paper (ABCP) Bailouts.

Bank of Canada Governor Mark Carney:

The response to the recent turbulence in financial markets should reaffirm that market participants are fundamentally responsible for their actions. For example, investors must understand the price dynamics and liquidity risks of the products they buy, rather than relying solely on credit-rating agencies. The market is beginning to lead many of the necessary changes, as institutions are improving their liquidity management and credit discipline and as originators and distributors of new loans are beginning to adjust their products to standardize terms and, importantly, align incentives. At the same time, accurate and timely information about underlying risks is essential for the market to differentiate and properly price risk. Thus, as Governor Dodge highlighted in September, enhanced disclosure and transparency remain crucial. Standing Committee on Finance December 5, 2007

In comments following an address to a business luncheon in Toronto on Wednesday, Mark Carney said the Canadian economy is strong enough to withstand the collapse of the massive restructuring, which has come under huge pressure as a result of the financial crisis. National Post December 17, 2008

Conservative Finance Minister Jim Flaherty:

Finance Minister Jim Flaherty said in Saskatoon that he and some of his provincial counterparts are discussing a plea from the investor committee overseeing the restructuring for as much as $9.5-billion in backstop credit lines, but no decision had been made.

The fact that Mr. Flaherty is even considering the request is a significant development, given that until recently his position was hands-off. Globe and Mail December 18, 2008

BoC Governor Mark Carney said "There was not going to be any public money put behind any of this [ABCP rescue plan] because these are decisions of financial market participants." Jim Flaherty now proposes to rescue these same financial market participants.

Concerning the 'Asset Backed Commerical Paper Rescue Plan' the Conservative Government should: ( surveys)

88% think Harper's decision to suspend Parliament is undemocratic

2008-12-18T12:03:00.000-08:00

Worse is that Mr. Harper continues to actively misrepresent the events of the past several weeks and the motives of his opponents. "We only found out [after the economic update] that they've been planning to overturn the results of the election ever since election night," he said. In fact, there is nothing to suggest that the opposition had any prior intention of toppling the government, and the disarray the Liberals quickly fell into suggests the prospect surprised them as much as anyone.

Nor would the opposition have been "overturning the results of the election," as Mr. Harper repeatedly alleged. Although a coalition government may be politically untenable, it would be entirely within the boundaries of parliamentary democracy - not a coup attempt, as the Conservatives continually claim. The Globe and Mail December 17, 2008

Don't panic! Conservatives working on aid to future Conservative Senators.

2008-12-12T08:46:00.000-08:00

See ya on January 26!

Panicking in the face of crisis would devastate Canadian economy: Flaherty

General Motors is shutting down every one of its operations in North America for the entire month of January

Harper vows to name 18 new senators

18 Senators X $130,400.00* = $2,347,200.00

*Basic Sessional Indemnity - Senators who occupy certain offices and positions are entitled to additional remuneration in accordance with the Parliament of Canada Act as listed. Indemnities, Salaries and Allowances - Senators

Stephen Harper unites the Liberal Party!

2008-12-09T10:01:00.000-08:00

Bravo Steve! You are the best, most successful Conservative PM ever.

At least your staffers/pretend protesters think so!

Liveblogging Bob Rae at the National Press Theatre - Kady O'Malley, Macleans

Rae dropping out of Liberal leadership race - CBC

Ignatieff 57% Rae 27% Leblanc 16%

2008-12-08T08:32:00.000-08:00

Looks like ongoing events mean the CAITI online Liberal leadership poll need modification.

The previous 3 way race results are here:

The 2 way race poll is active on the side menu.

Any excuse will serve a tyrant.

2008-12-07T04:45:00.000-08:00

Don Newman schools John Baird

Any excuse will serve a tyrant. Aesop

Courtesy of A BCer in Toronto

Does this sound like anyone we've observed this week?

2008-12-06T23:28:00.000-08:00

ICD-10 Criteria for Dissocial Personality Disorder - Wikipedia

dis⋅so⋅cial
/dɪˈsoʊʃəl/ Spelled Pronunciation [di-soh-shuhl]
–adjective
disinclined to or unsuitable for society; unsocial.

Origin: 1755–65; < LL dissociālis irreconcilable, equiv. to dis- dis- 1 + sociālis sociable

The dissocial personality disorder is described by the World Health Organization by the following criteria:

Callous unconcern for the feelings of others and lack of the capacity for empathy.
Gross and persistent attitude of irresponsibility and disregard for social norms, rules, and obligations.
Incapacity to maintain enduring relationships.
Very low tolerance to frustration and a low threshold for discharge of aggression, including violence.
Incapacity to experience guilt and to profit from experience, particularly punishment.
Marked proneness to blame others or to offer plausible rationalizations for the behavior bringing the subject into conflict.
Persistent irritability.

Related? You decide:
PM partisan, passionate and profane - Toronto Star
Maybe Harper’s not as smart as we thought - Chronicle Herald

Conservatives scared into earlier action

2008-12-05T05:42:00.000-08:00

Opposition parties force Conservatives to move up budget 2 months earlier

The intent of the Opposition was to help Canadians this winter with an economic stimulus package and they were partially successful.

The Conservatives did not plan to introduce any new measures to stimulate the economy until the next budget is tabled in March 2009. Flaherty says no economic stimulus package to come in economic update Nov 24, 2008

Why scaring the Conservatives into action is a good thing for Canada:

One of the key forecasters that the federal government depends on to crunch its budget numbers says Finance Minister Jim Flaherty's update last week would extend the country's recession and exacerbate the threat of deflation.

In last week's fiscal update, Mr. Flaherty argued that his previous tax cuts are stimulating the Canadian economy by about $31-billion - and that's why he didn't have to take additional measures right away, even though his own forecasts show the economy is set to contract this quarter and the first quarter of next year.

That's faulty math, counters the Centre for Spatial Economics, one of four firms the Department of Finance depends on to provide thorough economic forecasts upon which the government's budget track is based.

"This is a fantasy," said Robert Fairholm, the centre's director of economic forecasting. "Most of the short-term stimulus from these measures have already boosted economic activity, and so will not continue to provide [a] short-term jolt to growth."
Flaherty's plan prolongs the pain, forecaster says - Report alleges minister's math is flawed Heather Scoffield, Dec 4, 2008

Canadians lost 71,000 jobs in November – almost triple expectations – and the unemployment rate crept up to 6.3 per cent, Statistics Canada said Friday. That's the biggest month of job losses since the recessionary period of 1982, and puts the unemployment rate at its highest point since November 2006. Canada loses most jobs in 26 years Heather Scoffield, Dec 5, 2008

A Pyrrhic victory

2008-12-04T14:19:00.000-08:00

Conservatives say FU stands, Canadians can freeze in the dark until Jan 26

A Pyrrhic victory (IPA: /ˈpɪrɪk/) is a victory with devastating cost to the victor. Wikipedia

Canadian Prime Minister Stephen Harper has won a bid to suspend parliament, blocking an opposition attempt to topple his new government. The governor general agreed to Mr Harper's request, unprecedented in the country, after talks. If the request had been rejected, he would have had to step down or face a confidence vote he was sure to lose. Canada halts parliament amid row - BBC

The main opposition Liberals agreed Dec. 1 to form a coalition with the New Democratic Party in a bid to accelerate a stimulus package for the economy and oust the Harper government. The separatist Bloc Quebecois wouldn’t be part of the government though agreed to help it pass any legislation deemed matters of confidence. All three opposition leaders say they’re still committed to defeating Harper when Parliament resumes. Harper Suspends Canada Parliament to Avert Defeat - Bloomberg News

Canadian Prime Minister Stephen Harper has shut down parliament, sparing himself from a no-confidence vote that he was likely to lose. Canadian PM Shuts Down Parliament to Avoid No-Confidence Vote - Voice of America

So how did we get here? The answer depends on your perspective.

In a simplistic reading, our present situation is a direct result of what happened last Thursday. That day, Finance Minister Jim Flaherty stood in the House of Commons and delivered his government’s fiscal and economic update. Presented as a national plan at a time of profound economic crisis, it included promises to eliminate subsidies to political parties, tamper with the public service’s right to strike, and fiddle with the system through which women are able to seek equal pay for their work.

It seemed designed only to corner the opposition. So challenged, the Liberals, NDP and Bloc Quebecois found themselves with common cause and interest. Enter the coalition. And under threat of forced exit, the Prime Minister retreated to Rideau in search of reprieve.

That is the short version.

In the longview, it is the latest chapter in what is now an epic and troubling story.

In-and-Out. Chuck Cadman. Afghanistan. Torture. Linda Keen. Arthur Carty. Marc Mayrand. Dalton McGuinty. InSite. Listeriosis. Crime. Science. Academia. Elections Canada. Omar Khadr. Gordon O’Connor. Maxime Bernier. Canadian soldiers. The Military Police Complaints Commission. The ethics committee. The press gallery. CAIRS. Access to information. Notaleader.ca. The federal budget. The economy. The recession.

The emblem of this government has become a furious male face screaming indignation in the arena of our democracy. At every turn, the response has been to obfuscate, manipulate and demonize. Everything has been opportunity to divide. Truth has been tangential. Ethics and morals have been deemed quaint. The Game has superseded all. Short-term political advantage is all that’s mattered. Nothing worth doing if it is not in one’s own personal interest. The Commons: A cold and miserable day - Aaron Wherry, Macleans

Harper explained in 4 minutes or less

2008-12-03T22:42:00.000-08:00

Related:
The past and future tense - Aaron Wherry, Macleans
‘A lot of fear and anger and hatred’ - Aaron Wherry, Macleans

It's time for Harper to move aside

2008-12-03T08:43:00.000-08:00

Orillia Packet and Times

December 3, 2008

Letter to the editor:

It would appear that Canada will soon have the centre-left, progressive government that the overwhelming majority of Canadians, 62 per cent to be exact, voted for in the recent election. Despite the protests and laments of the Conservatives, who earned only 38 per cent of the vote, this change in government is indeed democratic, constitutional and fair. It is also in the best interests of Canadians.

This is happening due to the abject failure of Stephen Harper and his government to develop an acceptable plan for our faltering economy. Instead of providing economic leadership, the Harper government took advantage of the economic crisis to advance partisan and ideological interests. The good of Canadians had nothing to do with their plans, when now, more than ever, we need a government focused on what's best for the country.

Most economists have been calling for an economic stimulus, yet the fall economic statement contained $4.3 billion in cuts. This is frighteningly reminiscent of the myopic government austerity that escalated the 1929 recession into a prolonged depression.

Furthermore, the Conservatives are misleading Canadians. Their claim that Canada remains in a surplus position is simply not credible and, even while claiming they prepared for the economic crisis, they say that nobody could have seen it coming. Canada needs economic action, clarity and certainty.

Harper says the coalition is a power grab, yet he believes he is entitled to continue to govern, no matter how poorly, even if he has lost the confidence of the House of Commons. The Conservatives were elected with a minority of seats and an even smaller share of popular support. Now they have lost the moral authority to govern and, fortunately for Canadians, they can be replaced with a legitimate new government without going through another election only eight weeks after the last one.

It is perfectly normal in our system of parliamentary democracy for the Governor General to call upon the Opposition to form a new government, without holding another election, when it can be demonstrated that the new government would be stable and supported by the majority of members of the House of Commons. Harper knows this. That's why he wrote to the Governor General in 2004 to ask her to consider the same kind of arrangement when it was in his favour.

Now it is time to move on and start fresh with this coalition government. Harper must stop equating his party's interests with the interests of Canada. He knows he no longer has the confidence of the House of Commons and can no longer govern. He should be magnanimous and step aside, but I fear that his partisan impulses will, once again, get in the way of doing what is right for Canadians.

Gerry Hawes

Related:
http://www.62percentmajority.ca/

FU from JF

2008-11-28T10:35:00.000-08:00

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

2008-11-27T09:49:00.000-08:00

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)

Are they still dancing in the hallways at Bell?

2008-11-26T21:10:00.000-08:00

October 31, 2006:

The response to the surprise Trust tax announcement by Conservative Finance Minister Flaherty was remarkably different at Canada's two Telcos.

At Telus headquarters in Vancouver, where it was still midafternoon, the reaction was disbelief.

In Montreal, the mood was decidedly more upbeat. Sources said BCE's Mr. Sabia was a reluctant convert to the trust model, and “there was dancing in hallways at Bell” after Ottawa's announcement. Globe and Mail

CAITI articles on BCE

Nothing for seniors in throne speech

2008-11-22T08:49:00.000-08:00

The Gazette

Saturday, November 22, 2008

A chilling document utterly lacking in compassion, the throne speech might well have been written by another prime minister from Calgary, a lawyer, R.B. Bennett. This one was written by an economist from Calgary, Stephen Harper.

Millions or billions hinted for the auto industry but not a smidgen of help or rescue for Canada's pensioners who are forced to sell their savings in a plunging market (the subject of at least two excellent articles in The Gazette's Business pages last week).

John Diefenbaker ended 22 years of Liberal rule in this country in 1957 when he branded the Liberals "the six-buck boys" after they raised pensions by that amount over five years.

His spirit is dead in the Tory party of today.

Edward W. Barrett

Montreal

Related:
Seniors caught in the RRIF trap deserve a break from Ottawa

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

2008-11-21T07:24:00.000-08:00

"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

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Flaherty deserves to be fired as finance minister

2008-11-19T09:25:00.000-08:00

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

2008-11-06T14:04:00.000-08:00

"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