TORONTO, Feb. 2 /CNW/ - The Canadian Association of Income Trust
Investors (www.caiti.info) applauds those responsible for holding the Finance
Committee Public Hearings on the proposed double taxation of Income Trusts.
Notwithstanding the restrictive manner in which these Hearings were conducted,
the following important observations were made in materials presented to the
committee members:
"Income Trusts do not cause tax leakage, it is the Department of
Finance's methodology that causes tax leakage. It's that simple and it's that
wrong." Brent Fullard of CAITI
"I do want to point out that there is a serious flaw in many of the
analyses especially on the taxation of pension and RRSP accounts. Finance was
not right to treat the impact as ZERO." Dr. Jack Mintz (in an e-mail to
CAITI's President on November 28, 2006)
"The discrepancies between ourselves and the Finance Department led us to
conclude that the Finance Department is 'sharply overstating tax leakage'.
Specifically, we concluded that the true tax leakage is about 'five percent of
the Department of Finance's figures.'" Dennis Bruce of HLB Decision Economics.
"I guess, if we were incompetent, we wouldn't admit to it." Senior
Department of Finance Official
"Parliamentarians need objective fact based information on how well the
government raises funds (read:taxes)." The Auditor General of Canada.
Therefore as a result of these hearings, the Canadian Association of
Income Trust Investors is calling for a full public review of the
unsubstantiated and unproven assertions of tax leakage that lie at the heart
of the enabling legislation, namely the Notice of Ways and Means Motion to
Amend the Income Tax Act.
This wholly unsubstantiated policy, if legislated into law would result
in severe financial hardship for a great number of the 2.5 million hard
working Canadians who it targets. These Canadians will sustain a $35 billion
loss in their hard earned savings, that will take years to recoup, if they are
able to recoup these lost savings at all. Furthermore, the 70% of Canadians
who do not have pensions will lose an important investment CHOICE, that many
have embraced as a prudent way to provide retirement income in a protracted
low interest rate environment, namely income trusts. This policy will
negatively affect these 70% of Canadians at some point in their lives, as the
loss of choice is of inestimable cost.
Under Flaherty's proposal, the ability to invest in trusts will be
preserved for the exclusive benefit of those 30% of Canadians who, like our
public civil service workers and our elected MPs, are fortunate to be members
of defined benefit pension plans. Therefore, the Canadian Association of
Income Trust Investors leaves the Public Hearings with two important
unanswered questions:
"How can something that is being denied the average Canadian on the basis
of its presumed and yet wholly unproven assertion of tax leakage, be allowed
to persist for the exclusive benefit of those in the public civil service, and
others so advantaged?"
"Where is the objective fact-based information which parliamentarians can
rely upon, before they cast their individual vote on this sweeping economic
policy that will only serve to harm the 70% of Canadians without pensions and
the 2.5 million Canadians and foreign investors who made due reliance upon the
Prime Minister's promise not to tax income trusts?"
The Canadian Association of Income Trust Investors calls upon parliament
to hold itself to the standard of disclosure and transparency required of it
by the Auditor General of Canada. Canadians deserve no less. Failure to do so
will be severely damaging to the integrity of the Canadian capital markets and
the integrity of the Canadian Parliamentary System.
For further information: media@caiti.info
