There's an old technique in real estate called "block-busting." Here's how it works. You buy the cheapest house on a street and allow it to become run-down. In fact you actually help it to deteriorate. Get the worst possible tenants you can find, fill it with low-lifes, cockroaches, repair nothing, all for the purpose of a) destroying its value; and more importantly b) destroying the value of all the neighbouring homes.
Once that happens you buy up these neighbouring homes, one by one at bargain prices and gradually acquire the whole block for development.
Does that remind you of anything? The systematic destruction of the value of income trusts maybe?
Now that income trusts have been devalued by the punitive 31.5% tax and limits on all future growth they are ready for the "developers" to move in.
Developers like the government's own pension fund.
Yes, you read that right. The Public Sector Pension Investment Board is buying out an income trust called Thunder Energy at a real bargain. The reason it's such a bargain of course, is because of the government's own policy. The same government whose pension plan will now profit from this policy.
Starting with their purchase of Telesat from BCE, which they will own as the economic equivalent of an income trust, to their anointed role as an “eligible” member of the consortium bidding for BCE (anointed by former Director General of Tax Policy and current CEO of BCE, Michael Sabia) to their purchase yesterday of “on the ropes” energy trust Thunder Energy.
Conflict of interest?
Oh, no - not according to Public Sector Pension Investment. "Of course, as investors we are not called upon to formulate government policy...but we do have to make assessments of the potential impact of these various forces and factor those assessments into our investment decisions....The government is also formulating exceptions for PSP Investments from certain provisions of the Access to Information Act."*
It's all very arm's length we're assured. Except that on the end of that arm, is a finger... and the finger is dipping into the pie.
What kind of democracy do we live in, when Canadian investors are robbed of $35 Billion in assets which are then transferred to US private equity or private and government pension plans?
Mr. Harper, we all remember your election advertising. It wasn't all that long ago. Just when were you actually planning to "stand up for Canada"?
*Risk and Inequity: Canada's Largest Pension Plans and the Future of Income Trusts
Wednesday, April 25, 2007
Posted by Fillibluster at 1:58 PM