My meeting with the Toronto Star Editorial Board of April 12, 2007

Bob Hepburn (pictured here) has an editorial piece in today’s Toronto Star in defense of Louise Arbor and her work at the UN on human rights.

I met with Bob Hepburn and the Toronto Star Editorial Board on April 12,2007,at which time he was the Editor of the Editorial Page of the Toronto Star. If you can believe this, Hepburn and his colleagues were actually DEFENDING the 18 pages of blacked out documents used by Flaherty as ”proof” of alleged tax leakage from income trusts.

They agreed with Harper that this information should not be disclosed and agreed with Harper that it was a matter of National Security for this information not to be disclosed. I was totally dumbfounded. I thought I must have been meeting with the Editorial Board of Pravda and not the Toronto Star.

As such, Bob Hepburn is a total hypocrite. What about human rights here at home? Defending blacked out documents? Puhlease.

Hepburn demanded to know my reasons as to why Harper would have done something if it weren't to solve tax leakage?

I told him that was his job as a reporter to figure out. He then threatened to end the meeting, unless I gave my explanation.

I said that I did so reluctantly, since that was the reporters job, not mine. Half way through explaining that the many groups who benefited from this policy had lobbied the government, for example lifecos like Power Corp and Manulife, he stopped me before I could finish, and dismissed what I was saying with the comment "That's just a conspiracy theory".

At which point I told him that he was the one who wanted my answer and then he cuts me off before allowing me to finish. I told him the only conspiracy theory was the one being advanced by his paper, namely the conspiracy theory of tax leakage caused by income trusts and his ”proof” of alleged tax leakage.

The Star is owned by Torstar Inc. Torstar has two classes of shares. Voting and non-voting. The voting shares are the corporate abuse by which the Honderich and Atkinson families control the company. This control in turn assures the Star of its editorial freedom under the Atkinson Principles.

Many newspapers had converted into trusts to achieve higher valuations through appealing to income oriented investors, who pay taxes of 38% on these distributions. These income oriented investors are not interested in investing in the "crap shoot" known as the stock market to fund their retirement income needs. Nor do they want to own GICs that pay 2.00%. Income trusts emerged to fill their needs, on which they happily paid taxes, without the benefit of the tax benefits associated with dividends.

Torstar was being pressured to convert to a trust. The Board of Tortsar had a duty to maximize shareholder value, much like was argued with BCE before the Supreme Court.

Converting to a trust would have meant abandoning the Voting/Non voting share structure. This would have meant these Atkinson Principles would be in jeopardy. So too the Star's "Editorial Freedom".

Hence the Toronto Star's editorial stance on trusts is to kill them........and support the government's lies for doing so......like the conspiracy theory known as tax leakage etc etc.

The Toronto Star is a joke. They value their so called editorial freedom, more than they do the truth. The Star needs to learn about Maslow’s Hierarchy of Needs. The Star has no business spouting off about human rights abroad if it is a willing participant in truth suppression here at home and the resultant $35 billion raiding of seniors nest eggs. In so doing the Toronto Star is helping to aid and foster an intellectually corrupt regime known as the Harper CONs

Here was my follow up email after the meeting:

From: Brent Fullard brent.fullard@rogers.com
Date: Thu, 12 Apr 2007 20:17:23 -0400
To: bhepburn@thestar.ca
Subject: Jack Mintz Quote


Bob:

Thank you for the opportunity of meeting with the Editorial Board of the Toronto Star. In our meeting today and in response to a question that you raised with me, I made reference to correspondence I received from Jack Mintz that directly contradicts what he is saying in the public and the basis upon which the tax leakage numbers he has been advancing in the public have been based. Here is what he confided to me in an e-mail dated November 28, 2006:

"I do want to point out that there is a serious flaw in some analyses especially on the taxation of pension and RRSP accounts. Finance was not right to treat the impact is [sic] zero."

As I pointed out to you, this is the very basis upon which “tax leakage” turns. Wrongly excluding these taxes results in tax leakage. Correctly including them results in tax neutrality. Below is a press release issued by Dennis Bruce of HLB Decision Economics following the testimony he gave at the Public Hearings. The operative phrase is: "While federal budgeting is done on a current basis, federal policy analysis is done on a life-cycle basis. Accounting for the life-cycle effects of tax changes, namely deferred taxes, is appropriate in the consideration of tax policy."


Brent Fullard
President and CEO
Canadian Association of Income Trust Investors
www.caiti.info

647 505-2224 (cell)



Independent economists discredit govt tax leakage claims - 10 year phase-in of tax to have minimal costs

OTTAWA, Feb. 1 /CNW Telbec/ - In remarks delivered to the House of Commons Finance Committee Thursday, Dennis Bruce, Vice President of HLB Decision Economics Inc., provided data and supporting documentation to discredit the Department of Finance's tax leakage claims.
"The department is sharply overstating tax leakage," said Mr. Bruce, who added that there would be minimal costs associated with a 10 year phase-in of the new tax on income trust distribution payments.
HLB Decision Economics, an Ottawa-based independent consulting firm that provides analytical consulting services to industry and governments worldwide, has been working on behalf of the income trust sector to develop a comparative analysis of taxes generated under the income trust structure versus the corporate structure.
Mr. Bruce told committee members that his firm worked with the Department of Finance as it prepared the federal government's 2005 consultation paper on the tax effects of income trusts. Specifically, HLB was asked by the department to develop a common methodology and assumptions for deriving tax leakage estimates.
Mr. Bruce said that HLB and the Finance Department achieved consensus on the methodology with one exception - they disagreed on whether to include deferred taxes. Deferred taxes are derived from distributions, capital gains, and dividends received in tax exempt accounts. While they are not immediately taxable, they are taxable upon withdrawal from such accounts.
"The discussions that you are hearing about deferred taxes reflect confusion about budgeting convention versus policy analysis," said Mr. Bruce."While federal budgeting is done on a current basis, federal policy analysis is done on a life-cycle basis. Accounting for the life-cycle effects of tax changes, namely deferred taxes, is appropriate in the consideration of tax policy."
Mr. Bruce went on to outline the factors that resulted in the differences between HLB's tax leakage estimates and the tax leakage figures put forward by Finance Minister Jim Flaherty. These factors include:


1) The Department's assumed effective corporate tax rate for energy
trusts fails to reflect the reductions in the tax rates for resource
corporations from 2004 through 2006, from 27.12% to 24.12%. This
results in an overstatement of tax leakage of $84 million;
2) The Department's figure for income trust units held in tax exempt
accounts is overstated. Derived from data from surveys, Statistics
Canada, interviews and Scotia Capital Markets data, the percentage of
units held in tax exempt accounts is 31 percent, less than the
Department's 38 percent estimate. This results in an overstatement of
tax leakage of $125 million;
3) The value of deferred taxes is excluded from the Department of Finance
analysis. This results in an overstatement of tax leakage of
$80 million; and,
4) The Finance Department's atypical inclusion of the impact of limited
partnerships, which reduces the tax leakage to $45 million.
5) The impact of future legislated tax changes post 2010 has not been
accounted for. Doing so reduces the ongoing federal tax leakage after
2010 by $232 million.

Mr. Bruce stressed that the discrepancies between HLB and the Finance Department led his firm to conclude that the Finance Department is "sharply overstating tax leakage."

Specifically, HLB concluded that:

- Federal tax leakage for 2006 was $164 million, not the
half billion dollars stated by the Department; and,
- Ongoing tax leakage, post 2010, after taking into account legislated
tax changes, is $32 million per year, about five percent of the
Department's figures.



For further information: Dennis Bruce, Vice President, HDR - HLB Decision Economics Inc. (613) 234-0080; Cell: (709) 632-1708