TORIES PONDER NAME CHANGE: THE PINOCCHIO PARTY

Welcome to the wacky world of Canada's Conservative Party, the gang that couldn't calculate straight. Read on for a Bloomberg report on the recent Commons testimony by respected HBL economist, Dennis Bruce. Mr. Bruce's testimony, as an independent, non-partisan witness, confirmed that Finance Minister Jim Flaherty either lied outright, or responded in panic to a Bay Street myth, when he declared war on seniors and income trusts on Halloween Eve 2006.

Remember that Bruce's firm was originally hired by the Finance Department a few years ago, to study whether there was any tax leakage from income trusts. And when HLB came up with a different conclusion than Finance bureaucrats wanted -- namely that there was NO appreciable tax leakage created by income trusts -- his report was conveniently lost, never to publicly resurface again.

This week, Mr. Bruce testified before the Commons Finance Committee with a grave threat hanging over his head. Prominent Conservative MPs had already hinted that his firm, HBL Decision Economics, would never get another contract from the federal government if Mr. Bruce were to continue to insist that Finance bureaucrats had fudged their figures on trust 'tax leakage' and that the Finance Minister had either erred or dissembled on Halloween Eve when he referred to a national crisis of massive tax leakage from income trusts.

Despite the threats, Mr. Bruce refused to accede to the Tory party line and insisted that Finance bureaucrats had over-exaggerated the amount of tax leakage from income trusts because of faulty calculations on their part.

Of course, Canada's bungling Finance Minister probably already knew all this from day one, since the Finance Department has had the HBL report hanging around for years. But then again, how could the tiny imperfect Little Napoleon cast himself in the guise of the Saviour of Canada if he were to tell the real truth about trust 'tax leakage'?

How could he please his friends in the mutual fund industry and other Bay Street corporate opponents of income trusts if he were tell the truth about the real reason the Harper government decided to kill income trusts once and for all?

No wonder the Tories are rumoured to be considering renaming themselves the Pinocchio Party -- in honour of all the lies disseminated by their leadership about greenhouse gases and income trusts.

Would you buy a used political promise from these dissemblers?

To find out the story behind the story on the lies and distortions of Canada's tiny, imperfect Little Napoleon, check out the following Bloomberg report on the testimony of economist Dennis Bruce before the Commons Finance Committee.......


CANADA OVERESTIMATED TAX DELAY'S COST, ECONOMIST SAYS
-- Finance Minister Overestimated Trust 'Tax Leakage' By 2.8 Billion Dollars!

By Greg Quinn

Feb. 13, 2007 (Bloomberg) -- Canada would lose C$192 million ($164 million US), far less than the C$3 billion the government estimates, by delaying an income-trust tax for 10 years instead of four, said Dennis Bruce of HLB Decision Economics.

"The HLB calculation differs sharply from that of the Department,'' Bruce, who has studied income-trust taxation for the industry as well as the government, said during testimony in Ottawa today to the House of Commons Finance Committee.

The finance department left out some corporate tax cuts and deferred tax revenue when calculating how much the federal government would lose by extending the delay for another six years beyond 2011, he said.

Opposition lawmakers last week opened hearings into Finance Minister Jim Flaherty's Oct. 31 decision to tax income trusts for the first time, starting in four years. Income-trust executives, investors and some legislators want a longer grace period. They also want some energy industry trusts to be exempted from the tax.

Trusts are often the only source of funding available in Canada for some oil and gas companies, Pengrowth Energy Trust Chief Executive Officer Jim Kinnear told the panel today.

"Energy royalty trusts are highly efficient facilitators of the movement of capital within the oil and gas industry,'' Kinnear said. "There is no tax leakage associated with energy royalty trusts, compared with traditional Canadian oil and gas companies.'' Pengrowth, based in Calgary, is an investor in Canadian oil and natural-gas resources.

Tax Losses

Flaherty, 57, testified Jan. 30, saying he had to act because trusts may be costing C$1 billion a year in tax losses. Extending the four-year delay to a decade would cost the federal treasury C$3 billion, he said [although HLB Decision Economics estimated the total cost to the federal treasury to be only 192 million dollars, 2.8 billion dollars less than the Finance Minister's estimates] ....

Nuff said. The Pinocchio Party it shall be.