Is this what Harper meant by transparency and accountability?

Wake up sheeple.....you're next


Finance refuses to divulge key trust data
STEVEN CHASE
Globe and Mail Update
January 23, 2007 at 10:28 PM EST

Federal Finance Minister Jim Flaherty's department has refused to release details of how it calculated that income trusts are costing Ottawa hundreds of millions of dollars in annual tax revenue, a key claim used to justify the new trust levy.

A Calgary trust analyst who filed a request under Canada's Access to Information Act for this information received 13 pages from the Finance Department that appear to detail the calculations it used, but these are all heavily blacked out so that only row and column labels remain visible.

BMO Nesbitt Burns analyst Gordon Tait describes another 12 less heavily censored pages that Finance sent him — details of trust distributions — as information that's already readily available to the public.

Finance justified its censorship using a section of the Access to Information Act that allows it to withhold data dangerous to Canada's economic interests.

The law allows it to keep secret information “which could reasonably be expected to be materially injurious to the financial interests” of the federal government, or could hinder Ottawa's ability “to manage the economy of Canada” or could provide “undue benefit” to anyone.

The law, however, also makes clear this is a discretionary rule rather than a mandatory protection — such as private health history — and thus is up to Finance to decide.

A second excuse Finance gave was that it's allowed to keep secret advice provided to ministers.

Mr. Tait, a critic of the controversial trust tax the Harper government announced last Oct. 31, said he doesn't understand why the Finance Department is hiding calculations from public scrutiny.

“Do they feel they can't substantiate the tax loss claims that have been made? I can't find another reason why you wouldn't make it available,” Mr. Tait said.

Income trusts pay little or no corporate tax, instead shovelling out the bulk of earnings to investors, who are taxed individually. Ottawa says it never recoups all the tax these businesses would have paid had they been structured as corporations instead of trusts.

Tax revenue losses were central to Mr. Flaherty's rationale for breaking a Conservative election promise and slapping a levy on trusts.

He justified the new levy last Halloween by saying that annual tax leakage was already $500-million and would have risen to $800-million had BCE Inc. and Telus Corp. converted to trusts.

Trusts have produced experts to repudiate Ottawa's tax leakage estimates, but the Finance Department has so far rebuffed media requests to demonstrate how it derived those figures.

The Finance Minister had also warned that tax revenue hemorrhaging would only grow if left unchecked until it threatened the federal government's ability to fund priorities such as health care, education and infrastructure.

Income trust lobbyists decried the government's decision to shelter the bulk of its calculations from public scrutiny.

“It's a joke,” said Brent Fullard, president of the Canadian Association of Income Trust Investors. “They're treating it like it's somebody's private health records or bank account details.”

Liberal finance critic John McCallum said the censorship demonstrates the need for key parliamentary hearings that begin next week on the trust tax, a probe driven by opposition parties that he said will grill Finance on its tax leakage estimates.

Mr. Tait said he doesn't believe that releasing the information Finance is withholding would reveal some wildly unexpected figures. But it would show the blow-by-blow calculations Finance made so Canadians can judge whether the leakage estimate is sound reasoning, he said.

“What we want to know is how they took information and processed it to come up with these losses so we know if it's valid or not,” Mr. Tait said.

“If you want your data to be accepted, it has to be scrutinized. It's got to be subject to peer review. You can't just come up with your own little theory and not show anybody how you came to it.”

The Finance Department's Access to Information co-ordinator did not immediately respond to requests for an interview to explain why the department refused to release 13 pages of calculations.