Monday, January 21, 2008

The highly evasive Mark Carney on the price of tea in China

Below is the testimony provided by Mark Carney before the Finance Committee on December 5, 2007.

At that point in time, income trust investors had lost over $35 billion in their life savings because of the income trust tax policy that Mark Carney was responsible for while in the Department of Finance. This policy was designed to deal with the alleged tax leakage that was caused by income trusts. Mark Carney’s proof for alleged taxleakage takes the form of 18 pages of blacked out documents.

When asked about the negative consequences of his tax policy on Canada, as it pertained to the $40 billion in takeovers that it had induced and the loss of over $1 billion in tax revenue loss that it had cost, Mark Carney provided MP Garth Turner with a very evasive answer that went off on some tangent about how the stock market was up over the last year and a half.

What does that have to do with the price of tea in China? And now that you mention it, the TSX is no longer “up” in value, since it has lost over 10% of its value in the last four trading days, essentially wiping out all the gains that you were so effusive about.

When will you answer Garth Turner’s question about the takeovers and loss of taxes that your policy resulted in? Or have you moved on to greener pastures in your new role as Governor of the Bank of Canada?

Hon. Garth Turner
: A year after the decision more than $40 billion in Canadian trusts have basically been sold and it would appear that the better part of a billion dollars worth of tax revenue is not flowing into government treasury that was before.
Given that, I have two questions. One, did you anticipate the consequences of the advice that you gave the minister? Secondly, how can you consider to be anything other than a failure?

Mr. Mark Carney
: I'll refer to my previous answer, which is that I'm not going to go into the details of advice given to any minister of finance or any minister of the Crown that I gave as a civil servant. I will point out though, as a macro fact, that over the course of the last year-and-a-half, as I'm sure you're aware, the TSX, the largest market, is up substantially. We have a $1.6 trillion market cap on the TSX. It's important to keep context--

Hon. Garth Turner: I know that and I'm not interested in the TSX--

The Chair: I'm sorry, Mr. Turner, allow Mr. Carney to finish answering the question.

Hon. Garth Turner:
No I'm not because that's not what I asked him. He can answer a question I didn't ask him if he wants--

The Chair:
Do you have another question, Mr. Turner?


Dr Mike said...

How can anyone respect a person like Mark Carney??

Mr Turner was asking these questions on behalf of all Canadians , not just trust investors--he was trying to get to the bottom of why this country has been forced to do without over 1 billion dollars in tax revenue per annum--& this appears to be only the tip of the iceberg.

Mr Carney`s contempt for My Turner & all Canadians was very evident in his non-response----to him we mean absolutely nothing.

This guy has no business running a dog pound let alone the Bank of Canada.

Todays 600 point drop in the TSX & todays 4.5% drop in the Trust index are just an indicator of the poor policy planning of Mark Carney & the rest of the people in our finance department.

No wonder he didn`t want to say anything at the hearings--if I was that incompetent , I would not want anyone else to know either.


Transcanada said...

Carney's appointment to the position of BoC Governor should ring alarm bells with the Canadian Public. His attitude towards Income Trust investors was cavalier, evasive and unpologetic.

Carney will now wield considerable influence on the Canadian economy to benefit of his CONservative masters and the detriment of ordinary Canadians.

Truth In Trusts said...

As of today the income trusts are down, by actual calculation for each trust, $47.952 billion since Flaherty's Folly.

The CPP income trust holdings are down by $348.7 million since the "Folly"

Mary the golfer. said...

I want my money back!!!!!!!!!!!

The worst thing is that it seems like nobody really cares other than us.

Aesop said : "We hang the petty thieves & appoint the great ones to public office"

Albert Camus said : "By definition, a government has no conscience. Sometimes it has a policy , but nothing more".

Have a nice night.

Mary P.

Robert Gibbs said...

Mark Carney And Income Trusts

As some historical figures and many others have pointed out:
"Tell a lie often enough, and people will believe it as fact."

CONServative politicians are especially adept at using this philosophical approach. Repeat a lie and use disingenuous spin to justify a policy, rather than creating or adjusting a policy based on facts and evidence. Continue, even if the facts, evidence and consequences prove the policy to be in error, so as to avoid embarrassment and the appearance of incompetence.

Mark Carney was very obliging in this approach when assisting Harper and Flaherty with their ruinous income trust policy.

Let's also not forget Mr. Carney's helpful hand in eliminating the 15% withholding tax on interest flowing to US and other foreign-based entities, including non-Canadian leveraged buyout companies and hedge funds.

He also assisted Flaherty in creating the capital raising restrictions that crimp growth for Canadian income trusts. Of course, though, US and other foreign-based entities, including those taking over our Canadian trusts, face no such restrictions.

So, in summary, we have a policy that has(amongst other things):

1)wiped out $35 billion of Canadians' savings
2)caused losses in the Canada Pension Plan, other pension plans, RRSPs, RRIFs and various mutual funds
3)placed a punitive new tax on Canadian publicly traded income trusts (while no such tax applies to private trusts)
4)eliminated a viable and desired investment choice for ordinary average Canadians (while favouring wealthy private interests)
5)placed seniors, retirees and other Canadians' futures in jeopardy
6)increased the cost of capital for Canadian businesses structured as trusts
7)reduced the ability of these Canadian businesses to make acquisitions
8)placed restrictions on the ability of these Canadian businesses to grow (while US and other foreign-based entities face no such restrictions)
9)eliminated a competitive Canadian advantage and a natural hedge against foreign takeovers
10)encouraged US and other foreign takeovers, especially in the trust sector
11)allowed US and other foreign-based entities to remove income from Canada entirely tax free
12)eroded the Canadian tax base.

With CONServative government measures like these, and Mr. Carney, a former US Wall Street carpetbagger, leapfrogging to head up the Bank of Canada, conspiracy theorists may wish to ponder some of the motivations behind this policy.

The injustices abound, compound and confound.

Anonymous said...

Jan. 26, 2008: Mark Carney has a hidden agenda and I believe it is to enrich his special friends while the rest of Canadians are thrown into the garbage heap. According to this man, we should be punished mightily when we followed Harper's promise not to touch income trusts. Once Carney had the ear of the "financial maven" Flaherty and the other economics genius Harper (who failed in his attempt to receive a PHD), he told these ignorant men what to do to punish seniors and enrich large insurance and private equity companies. Way to go! Ask the Russians what Carney did to enrich a few at the expense of the average Russian.