Game On

Ostensibly the 31.5% income trust tax and the double taxation of income trusts is all about “leveling the playing field” between two business models. Strange then, that so many other business models have been conveniently left out of this exercise: Capital Trust Securities, Private Family Trusts, Private Income Trusts and Private Limited Partnerships to name a few.

Income Trusts that play in the Large Pension Fund League are also excluded from this exercise for some unknown reason. They along with their team owners (governments and unions) are effectively immune from this tax. Be that as it may, it is quite revealing that a sports analogy has been used to describe the goal of this policy, as if to suggest fair play is the governing principle. To get insight into whether there is any fairness in this game of theirs, we need only evaluate the means that they have used to achieve their goal.

Everyone involved, from the “Players” on the ground to the media cheerleaders on the sidelines deserve game misconducts and league suspensions.

From the very outset, this game has been characterized by high sticking, elbowing and no end to tripping and checking from behind. Team Owner Stephen Harper and Captain Jim Flaherty should be the co-recipients of  the Todd Bertuzzi good sportsmanship award. Unfortunately this will even sully Todd’s fine reputation for good sportsmanlike conduct.

Now on to the highlights:

(1) Blind-sided checking from behind Promised never to tax income trusts. Opposing team members rushed to hospital, still suffering nine months later. No apology, No remorse. Still maintain it was the right thing to do. Wouldn’t change a thing.

(2) Tripping Provided 18 pages of blacked-out documents as "proof" of tax leakage. The referees saw this offense in plain daylight, but ruled it conforms to the new league rules of "transparency" and "accountability". Cheerleaders in total denial. Claim they want to remain neutral as they throw their pom-poms in the air. Neutral?

(3) High Sticking Stacked the Public Hearings and employed all of the dirty tricks contained in the team’s 200 page Dirty Sportsmanship Manual including being hostile to the witnesses, fawning over government witnesses and other attempts to pre-judge the outcome and control public perceptions through a compliant media, whose coverage was equally biased and orchestrated. (Note: this matter has been referred to Canadian Broadcasting Standards Council)

(4) Slashing Advanced false statements and theories such as the supposed non-existence of the US $480 billion Master Limited Partnership market, the tax leakage impact of BCE’s sale to Private Equity via a leveraged buyout ( costing the government $793 million PER YEAR, enough to build several new stadiums) and other falsehoods consistently promulgated by the Goon Squad, but never supported by any facts.

So there you have it sports fans. This is our government’s idea of Fair play, as they pursue any means to achieve their ultimate goal of making Canada a better place for Manulife, PowerCorp, their own private pension plan and of course US private equity. The final score?

Income trusts: Minus 31.5% (resulting in the loss of $35 billion and an essential investment choice in the future)

Corporations Minus 6.2% (average corporate tax on an apples to apples comparative basis)

Great, in less than four years we’ll be back to just one team on the field. The sluggish and coddled corporations of Canada who stifle competition by taking advantage of an ignorant or duplicitous government. With no competition they’ll always be sure to win..........that is, until the world comes knocking on our door. Sorry Jimbo, that’s the big league. That’s when we will wish we had allowed this new and highly competitive low cost form of capital to flourish and not die prematurely as the result of his totally false diagnosis. By the time most people come to this realization, the whole sector will have been carried off on a stretcher, and our teams moved south of the border.

Tim Hortons anyone?