Wednesday, April 30, 2008

Today's Globe: BCE's Ironic End Run

Gearing up for the next trust boom
Marzena Czarnecka
Globe and Mail
April 30, 2008

BCE’s Ironic End Run:

Jim Flaherty may not know this, but the privatization of BCE, Inc. by Ontario Pension Plan and company – amounts to an income trust. At least, it does if you talk to John Brussa, one of the so-called fathers of the income trust structure.

“If you look at the BCE transaction, it is an income trust in everything but name,” says Mr. Brussa, a tax partner with Calgary law firm Burnet Duckworth & Partner LLP. “From a pure tax leakage point of view, the tax leakage in the current structure is probably more than it would have been had BCE become an income trust.”

The irony is sweet. After all, BCE’s trust plans were one of the triggers behind the federal government’s move – in the persona of Mr. Flaherty, Minister of Finance – to close the “loophole” that gave income trusts their tax advantage.

Marzena Czarnecka
Globe and Mail


Dr Mike said...

Sad Jim , sad!!!!

"Clueless in Ottawa" --almost sounds like the name for a good movie ; a horror movie , that is.

Dr Mike.

Truth in Trusts said...

Flaherty created more tax leakage than he prevented. Of course there was no tax leakage to prevent in the first place because the income trust unitholders pay the taxes not the income trust. Wee Jim should know because his law firm does not pay any taxes either. What about that tax leakage Jimmy? Maybe you should impose a 31.5% tax on law firms and accounting firms as well.

Anonymous said...

Don't over rate flaherty as he is not clueness but rather pure and simple incompetent. Any sensible clueless person would backtrack or fix their mistakes when facts reveal itself. We are not seeing this here.

Dr Mike said...

I guess I was not being fair to Jimmy calling him clueless ---he did after all have some ideas , although probably not his own.'

His vast experience as a lawyer has given him a unique view of things---peering at the back doors of ambulances can do that to you.

Dr Mike.

Mary the Golfer said...

Did you see Danny Williams on TV today offering to help Ontario in it`s time of need as we are on the verge of becoming a have-not-province??

It is no coincidence that Ontario`s tax base is eroding & that Mr Flaherty is our federal Finance Minister. When he held the same position in Ontario he spent us into oblivion & left no room to maneuver when a downturn occurred. He has done the same federally & as a result , leaves him with no room to come to Ontario`s rescue in it`s time of need.

Talking-up the dollar was sheer incompetence on his part.

Removing income trust investors with their associated taxation was plain idiocy.

Mr Flaherty , the people in Ontario are about to show you the door. Please just take it & don`t come back.

Mary P.