Thursday, January 24, 2008

Selling coal to Newcastle



You really have to hand it to our esteemed leader, Stephen Harper, as he has solved one of the great riddles of our time: How to sell coal to Newcastle.

Except in his case, it involved selling Canadian oil and gas properties to Middle Eastern oil interests, specifically the $5 billion purchase of Prime West Energy Trust by Abu Dhabi Energy , a state owned enterprise controlled by Sheikh Zayed bin Sultan Al Nahyan, whose modest personal residence and fleet of Bentleys, Mercedes and BMW's are pictured above.

Now that Sheikh Zayed owns one of the largest energy income trusts in Canada, and Hong Kong billionaire Li Ka Shing now owns TransAlta Power Income Fund, it has become quite clear who Stephen Harper had in mind when he wrote the following words in the National Post in 2005:

"Seniors are actually enraged, frightened and panicked about potentially losing retirement savings that they count on for the essentials of daily living."Income trusts are popular with seniors because they provide regular payments that are used by many to cover the costs of groceries, heating bills and medicine. They also provide tax relief from a government that is addicted to taking too much money from their pockets and spending it without care, and very often without meaningful results.

So one must ask, why is the government clamping down on the retirement savings of seniors and investors?”

Well Stephen, that is a most insightful question that you posed in 2005, that demands an answer in 2008, since, in the end, it was you who did the clamping and not the Liberals. It was you who promised never to raid seniors nest eggs, only to turn around and do that very thing.

Obviously you have a particularly close place in your heart for the world’s billionaires, as they seek safe havens to invest their abundant wealth in. Perhaps you derive your affinity for the lifestyles of the rich and famous from your wife Laureen, when you let it slip that your wife Laureen thinks that Bill Gates is “the worlds sexiest man”. Not because of Bill Gates’ philanthropy, but based on Laureen Harper’s reasoning that "when a man has that much money, he's sexy".

Well that pretty much explains the Harper family mindset and value system. Welcome to the third world, Canada style. It's too bad that Stephen and Laureen Harper don’t think that it's “sexy” to honour election promises, or see the sexiness associated with the act of seniors being in a position after a life time of hard work of being to have sufficient income from their investments to “cover the costs of groceries, heating bills and medicine”.

Evidently I am not alone in my questioning of the merit of selling the assets that provide the basis for Harper’s other bold assertion that Canada is an Energy Superpower, while Harper is simultaneously encouraging and fostering the sale of those very assets to middle eastern oil companies on the cheap. Assets that were otherwise happily owned by average tax paying Canadians,

Stephen Harper solved the age old conundrum of how to sell coal to Newcastle by imposing a draconian 31.5% tax on the 20% of Canada’s oil and gas production that is held in publicly traded trusts and the 80% of Alberta’s energy infrastructure assets that are held in publicly traded trusts on the average Canadians who owned, while allowing foreign big oil to be free from this tax.

In addition, Harper further advantaged foreign big oil to acquire these newly undervalued trusts by relieving big oil of the growth restrictions that Harper imposed on these businesses whilst in the hands of average Canadians. Harper furthered greased the slides of takeovers by foreign big oil by eliminating the 15% withholding tax these players would have had to pay on the debt they used to acquire these companies. The technical term for such an unlevel playing field is called event driven arbitrage. In layman’s terms its called a sweetheart deal for the rich and famous.

And what is Industry Minister Jim Prentice’s words to Abu Dhabi Energy’s future acquisition ambitions in Canada? Please, help yourself. Your petrodollars are most welcomed here, in a way that average Canadians’ are not.

Next on Harper’s agenda will be solving the problems plaguing the Canadian automotive manufacturing sector. Rather than helping fund the start up of the idled Ford engine plant in Windsor, Harper has better use for that $60 million. It’s a sure thing. Canada will soon be opening the new Bentley dealership in Abu Dhabi to cater to the uber wealthy carpetbaggers from the middle east who have just struck oil in Canada.....of the most viscous and greasiest kind.

P.S. Did I mention tax leakage?

9 comments:

Xenos said...

The government indifference to the sell-off of PrimeWest to Taqa is surprising. To make a long argument short, the present value of future taxes is $1 billion (roughly 40% of $250 million over 20 years.) The present value of the energy trust sector to the Canadian governments, before Flaherty started his butchering of the Income Tax Act, was roughly $75 billion.

Is it surprising that a Conservative government would replace owners who’d pay $75 billion in future tax with owners who’ll pay zip? Except, not if the government is Conservative. You see, big ‘C’ Conservatives are not what their name suggests. They are not fiscally conservative. Mulroney tripled the national debt in only nine years. He’s the guy that created the healthcare funding crisis.

Given the Conservative track-record, it is not surprising that Harper doesn’t really care about government finances or debt.

What totally astounds me is that the NDP have said nothing. They must be stupid not to have figured out that last year’s budget delivers Canada on a platter to foreign investors. May be the NDP read too much Globe & Mail and National Post?

Dr Mike said...

Stephen Harper said :
"Seniors are actually enraged, frightened and panicked about potentially losing retirement savings that they count on for the essentials of daily living."Income trusts are popular with seniors because they provide regular payments that are used by many to cover the costs of groceries, heating bills and medicine. They also provide tax relief from a government that is addicted to taking too much money from their pockets and spending it without care, and very often without meaningful results."

My question to him is , what changed??

On Nov 1 2006 , were seniors no longer requiring the income from trusts to pay for their groceries, heating bills , & medicine--from the evening of Oct 31st , did some miracle take place I did not hear about??

Was the need for tax relief from an uncaring & reckless gov`t no longer required??--it must be that the "new" Conservative gov`t is more caring & a wiser users of gov`t revenues.

Someone hit me with a stick!!!!!

I must be dreaming!!!!

Knock me over with a feather because the sky has fallen!!!!

The sooner everyone in this country realizes that this so-called "new' gov`t has not acted in the best interest of it`s citizens , the better.

Their only accomplishment has been to kow tow to the rich & famous & let the rest of us go to hell.

Time to wise-up Canada--these guys are not here for our benefit--we are but a means to an end--give them a majority & the end will become more evident than we can bear to see.

Mike--A former Conservative.

Anonymous said...

I was not in a good mood yesterday when Primewest was yank out of my portfolio.

When are we going to have an election?

Dave

Dr Mike said...

Dave,
You must have a warm & fuzzy feeling now that your gov`t has taken from you to give to Abu Dhabi.

It is obvious that they needed the leg up.

You probably would have farted away the money on frivolous items like food & electricity anyway.

Mike.

Old Fart William said...

Steve and his gang are either the most incompetent bunch to govern Canada in our long and chequered history, or the most criminally dishonest and traitorous. They are poisonous to the wellbeing of Canadian seniors and to the country as a whole.

In the long run it really doesn't matter whether they are incompetent or evil (not ignoring the probability that they are both). Either way, the damage they have done already will take decades to correct. Just as Mike Harris' poisonous legacy hangs over Ontario like a sullen cloud, so too will the Harper stench permeate Ottawa and Canada for years to come.

Two years is two too many! We can't afford a Harper Government!

Anonymous said...

ISN'T THERE A WAY OUT OF THIS TAX FOR THE TRUSTS , LIKE CHANGING TO A LIMITED PARTNERSHIP ?

Dr Mike said...

How about an IDS (Income Deposit Security) structure --a stapled security --made up of a dividend paying portion stapled to a debt portion.

So far ,this structure avoids the Flaherty "sniff" test & will not be included in the "new" trust tax.

Check out New Flyer industries--a prime example NFI.Un

http://www.newflyer.com/


Mike.

Anonymous said...

What was the NDP's justification for agreeing with Harper/Flaherty when they announced taxing IT's in Oct. 2006. I never could figure why they would go along with this.

Robert Gibbs said...

Perhaps Stevie, Jimmy, Prentice, et al should look up the definition of treason, since their actions provide a perfect example of this word's meaning:

Treason (n):
-A betrayal of trust
-Treachery
-Perfidy
-Disloyalty or treachery to one's country
-The crime of giving aid and comfort to the enemies of one's country