PLEASE PASS AROUND THIS NEW PETITION TO REVOKE TRUST TAX

Petition to the Government of Canada - Income Trust Broken Promise

PETITION TO THE GOVERNMENT OF CANADA

INCOME TRUSTS BROKEN PROMISE


WHEREAS: The Prime Minister said that there is no greater fraud than a promise not kept; and

WHEREAS: He emphatically promised during the last election never to tax Income Trusts; and

WHEREAS: The Conservative Government recklessly broke their promise by imposing a 31.5% draconian tax on Income Trusts; and

WHEREAS: The broken promise wiped out over $25 billion of the hard-earned retirement savings of over 2 million Canadians; and

WHEREAS: Independent experts subsequently provided Parliament with clear evidence that the Finance Minister’s decision to tax Income Trusts was based on flawed methodology and incorrect assumptions.

We, the undersigned residents of Canada, call upon the Government of Canada:

to acknowledge that their financial justification for imposing the tax was flawed; to apologize to Canadians who were unfairly harmed by their reckless broken promise; and to repeal their draconian 31.5% tax on Income Trusts.

Please affix Signatures (Sign own name. Don't print.) and Addresses (Provide full addresses & postal codes) below:

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Please return this petition (signed) to:

The Honourable John McCallum, MP; 110 Justice Building; House of Commons; Ottawa, Ontario K1A 0A6

(No postage is necessary to send mail to Members of Parliament)

Vulture Capitalists Circle Flaherty's Energy Prey!

FEDERAL TAX 'LOOPHOLE' MAKES TRUSTS TASTY TARGETS

-- U.S. Players Expected To Capitalize On Flaherty Blunder!

by Shaun Polczer
Calgary Herald
Tuesday, May 08, 2007

A loophole in federal trust taxation policies will make Canadian energy trusts plump takeover targets for U.S. hedge funds and private pension plans, industry observers warned Monday.

That's because private trusts and large pensions like the Ontario Teachers won't be subject to a 31.5 per cent tax on distributions when the changes come into effect in 2011.

John Brussa, a partner with Calgary oilpatch lawyers Burnet, Duckworth and Palmer, said he expects to see the emergence of new corporate structures designed specifically to exploit that advantage -- including acquisitions of existing trusts by Canadian pensions and speculative American hedge funds.

"That tax represents a big inviting target for people that can eliminate it," he said on the sidelines of a Conference Board of Canada meeting at the Telus Convention Centre.

"If you see a $20 bill on the ground you tend to want to bend down and pick it up. And those people will be pension funds, they'll be U.S. private equity guys . . . those are the folks who see that as a tempting target."

Although he doesn't expect to see a wholesale takeover of the Canadian energy trust sector before 2011, Brussa -- who previously prepared tax opinions for companies considering trust conversions -- said the mould has been set with Thunder Energy Trust.

In April, Thunder was taken over by a consortium that included Overlord Financial Inc., the Public Sector Pension Investment Board (PSPIB) and a numbered Alberta company for $200 million.

The Ottawa-based PSPIB is a Crown corporation charged with overseeing the pension assets of the federal public service, the Canadian Forces and the Royal Canadian Mounted Police.

John Dielwart, president of ARC Resources Trust, described the exemption of private trusts as an "egregious omission" to the new rules that were announced Oct. 31.

"By excluding private trusts, big private equity funds, big pension funds can still play this game the way they always have. Individual Canadians, either retired or saving for retirement, are basically being thrown under the bus. It's intolerable, in my view."

Bill Andrew, president and CEO of Penn West Energy Trust, said all the big trusts --including Penn West -- will be looking at alternative corporate structures as the tax deadline draws near.

Andrew said "vulture funds" in the form of ultra-speculative hedge investors are already looking to Canada as fertile ground for speculative assets ahead of what they see as looming consolidation in the sector.

"(Hedge funds) are in it for the short haul; they're in it for the flip."

Finance minister Jim Flaherty was scheduled to address the gathering, but was a no-show.

Gordon Tait, managing director of income and royalty trust research with BMO Capital Markets, said one impact of the federal government's decision has been to reduce the number of initial public offerings of energy companies and increase foreign ownership of the trust sector.

Before he became a research analyst, Tait was Enerplus Resources Fund's chief financial officer.

He said the government's "tax fairness plan" creates a two-tiered investment landscape that favours large institutional investors over ordinary Canadians.

"If it's good enough for the Ontario Teachers' fund, why not my RSPs?" he asked.

Although he doesn't expect the trust sector to disappear, he predicted a greater number of trust buyouts as 2011 draws closer.

"As we get closer to that 2011 deadline you'll start to hear the knock on the door," he said.

ARC's Dielwart, who is also co-chair of the Canadian Coalition of Energy Trusts, agreed that the present government is unlikely to reconsider its stance.

But he also vowed to carry on the fight in the absence of an election to topple the ruling Conservatives.

"We will not quit, we will not stop fighting this ill-advised policy," he said. "Until such a time as there is no life left in our bodies, we will not give up."

spolczer@theherald.canwest.com

Governor Bank of Canada Frets Over (Flaherty) Sell-Out Of Canada!

DODGE FRETS WHILE CANADA STUMBLES

-- How About Zeroing In On Real Problem: Jim Flaherty!

Guest Editorial by Brent Fullard, CAITI

David Dodge needs to get his supply/demand terminology straight. Rather than fretting over the “inexhaustible supply of debt” to finance the takeout of public Canadian companies, perhaps he should take the time to realize that this is actually the demand side of the equation, not the supply side.

Private equity has demand for investments. Canadians have demand for investments. The demand for investments on the part of Canadians is most acute for those 70% of Canadians who are not members of pension plans. This distinguishes them from virtually every occupant of Ottawa, David Dodge included.

Finance Minister Jim Flaherty’s policies grossly favour foreign investment demand at the expense of domestic investment demand. Fret that outcome for a moment if you will.

Rather than fretting over the wrong side of the supply/demand equation, over which he and all of Ottawa have zero control (i.e. pools of private equity), perhaps Mr. Dodge and his office would be better served by acknowledging the true “supply side” of this equation, namely the income trust market and near income trust companies like BCE and Telus that Canada’s “Its not my fault!” Minister of Finance, The Honourable Jim Flaherty, has fattened up for slaughter. By this, I am referring to Flaherty’s foreign private equity friendly measures, whereby Mr. Flaherty:

(1) cratered the value of the $200 billion income trust market, by imposing a tax of 31.5% on every public income trust; yet there is no such tax on the myriad number of other 'tax flow-through' entities in Canada, including private income trusts owned by pension plans.

(2) imposed central planning style growth restrictions on income trusts if in the hands of average Canadians; but no such growth restrictions are imposed when trusts are transferred to the hands of foreign private equity or any other ownership arrangement.

(3) eliminated the 15% withholding tax that would otherwise be paid by the largest pools of leveraged buyout loans, namely foreign lenders and foreign capital providers.

Despite Flaherty's intellectually vacuous argument -- “it’s not my fault” -- these three measures of Flaherty’s are certain to triangulate a most undesirable result: a vastly increased supply of now highly-vulnerable Canadian companies ripe for the pickings by predatory foreign and domestic private-equity interests.

Yes, that’s the supply side of the equation, whereas foreign private equity is the demand side of the equation.

Fretting is one stop shy of “it’s not my fault”. Time for the supposed straight-talking David Dodge to get his facts straight and speak the truth. Jim Flaherty is grossly incompetent, and his actions on all fronts are undermining the economic sovereignty of our country.

Does that fall within the Bank of Canada’s mandate?

One last question. How many Canadians does an association like CAIT have to represent before they get an audience with the Governor of the Bank of Canada?

Is one million plus sufficient?