Blame for trust debacle rests with PM......LBO of BCE too!

From the National Post, Friday, April, 13, 2007
LETTER

Blame for trust debacle rests with PM

Do not fault senior retirees for investing in income trusts.

The primary reason for senior retirees and working citizens planning for retirement to invest in income trusts was for the income streams they produced, as opposed to inadequate fixed-income investment
returns or the risks related to buying public stocks for capital gains.

When your capital is limited and you need to supplement your income, diversification outside of income-producing investments is not an option.

Senior investors did not fail to diversify to fixed-income investments and stocks out of ignorance or greed, it was out of experience and the need to derive cash flow.

Many seniors with small pensions, invested in income trusts after years of studying the markets and building up the experience and confidence required to risk their limited investment capital. Most
retirees or seniors do not have the luxury of a "balanced" portfolio and until Mr. Harper and the Conservative government broke their promises, the best income-producing assets were income trusts.

They had the confidence to invest in income trusts for the following reasons:

The Prime Minister, Mr. Harper, and the Conservative party promised not to tax income trusts and indeed promoted the value of these investments for seniors. The Bank of Canada governor, David Dodge,
praised income trusts. The provincial governments legislated for the removal of unlimited liability to enable pension funds to invest safely into income trusts. The Toronto Stock Exchange included income trusts in their indexes. Mutual funds and pension funds
invested heavily in income trusts. Many brokers and investment analysts promoted the purchasing of income trusts.

Income trusts had been on the market for a number of years and many had a long record of paying steady distributions that were higher than money markets. Many funds of income trusts were rated with four
and five stars. institutional investors were investing in them, e.g. CPP and Teachers Union. Fixed-income rates were barely above inflation. Dividend stocks had very low payouts. Stocks did not provide cash flow and were a gamble on capital gains. With royalty trusts, investors were purchasing actual inventory in the ground.

No senior investor expected:

* That the Prime Minister would renege on a solemn promise made to senior citizens not to tax income trusts.
* That the Conservative Party would renege on a clearly defined party-platform promise not to tax income trusts.

The total blame for this $30-billion debacle rests squarely on the shoulders of the Prime Minister and the Conservative party for encouraging seniors to invest in income trusts and then breaking their solemn promises not to tax them.

Seniors were deceived as they were encouraged to invest in income trusts and were then abandoned and victimized by the very parties they had believed in and supported.

Gerry Harley, a senior citizen, Ottawa