Friday, August 1, 2008

Confessions of a recovering Globe and Mail reporter

Globe and Mail reporter Derek DeCloet recently got eviscerated by his readers for the piece he wrote this past Tuesday entitled: “Jim Flaherty, trust investors' best friend. Seriously”

Readers’ comments are here . Assuming they haven’t been expunged.

As the article’s title indicates, this was a rather inane piece of journalism and a total distortion of reality. But the Globe is known for that. Income trust investors thank Jim Flaherty?

Obviously Derek felt under some pressure to defend himself to his readers after the article had appeared and made this rather revealing observation in an email to Bruce Benson of Calgary:

“You know what the sad part is? Income trust investors make some good points. The best argument you've got is on tax leakage. Flaherty's tax-leakage estimates are not only unproven, they are probably unprovable.”

As confessions of a recovering Globe and Mail reporter go, this is a pretty good start.

I have no idea what Derek means by “they are probably unprovable.” That’s just intellectual laziness......Hey, Derek we’re talking about a simple construct of arithmetic here. Would you accept this line of logic from your bank teller if there was a dispute over your bank account balance?

Of course you wouldn’t. So why would 2.5 million Canadians who lost $35 billion amd an essential investment alternative accept it from you or any one else?

This confession also reveals something else very disturbing, namely that Derek DeCloet and/or the Globe and Mail, obviously don’t do their homework.

The definitive study on tax leakage was done by HLB Decision Economics in collaboration with the Department of Finance during the Goodale consultative round in 2005. It proves there is no tax leakage.

That study was entitled “The tax revenue implications of Income Trusts dates" dated November 23, 2005

That's exactly is how I began my trek on this income trust journey by calling a former colleague at BMO Capital Markets and asked the simple question:

“Whatever became of that study that CAIF commissioned for the Goodale round? Did it ever get published? What did it conclude about tax leakage?”. I had the study in my hands two hours later and spoke to its author, Dennis Bruce, within 48 hours.

I guess I would make a lousy news reporter. Gather the available facts first, understand them. Speak to the author of the report. and then act. Meanwhile the Globe has had a better part of two years to do that, and they clearly have not.

Perhaps there is still hope for our recovering reporter, Derek CeCloet, although I am not holding my breath.

Meanwhile the other source of tax leakage numbers widely bandied about in the press, Jack Mintz, has totally discredited himself with this following admission:

“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 as zero”.

The question I have for Jack Mintz is the same question I have for Derek DeCloet, which is

“So what the hell are you doing about it?”

Admitting one thing in private and doing the exact opposite in public has a name. Actually several names. I prefer the term hypocrite.


Anonymous said...

Admitting one thing in private and doing the exact opposite in public has a name. Actually several names. I prefer the term hypocrite.

I prefer the term 'spineless puppet'. With one exception, Diane Francis, who has a grasp of how badly Harper and Flaherty screwed up on Income Trusts, Canada's reporters appear to be lazy, clueless or puppets to the CONservative clowns.

This issue has really opened my eyes on what toadys some of these reporters are.

Bruce Benson said...

I am still waiting for my reply from DeCloet. Perhaps he is too wrapped up in the fire fight he created and does not have time. May be he will reply when he has a free moment.

Robert Gibbs said...

No Room For Democracy In Harper's Conservative Dictatorship

Don't You Dare Question My Legislation Or My Government's Conduct
Megalomania, Propaganda, Hypocrisy And Aggrandizement Run Rampant

July 31, 2008

In an article published on Thursday, July 31, 2008, the Ottawa Citizen describes some of Harper's remarks during the last day of the Conservative's annual "summer retreat" or caucus meeting. A few observations are added.

How's this for a megalomaniacal dictator:

In a new twist, the prime minister also said he would not tolerate efforts by the opposition to use parliamentary committees to debate legislation or launch inquiries into government conduct.
The Commons justice committee, for example, has been all but paralyzed by Conservatives over whether to allow a probe into the Cadman bribery affair.

"I don't think they [Canadians] believe the purpose of Parliament is to hold investigations into scandals...," said Harper. "These are all ridiculous political games..."

In other words, Harper refuses to allow a democratic discussion of his policies and legislation, and refuses to submit his government to examination and scrutiny. He will rule with an iron fist, beholden to no one.

The world has seen this kind of tyranny before. In fact, we continue to see it today. And it isn't pretty.

Spewing pounds of propaganda:

"The purpose of Mr. Dion's carbon tax is to raise money for the federal government so that he can spend it," said the prime minister. "That is the only reason a politician ever puts in a new tax..."

Absolutely untrue, Mr. Harper. The policy is actually concerned with the benevolent goals of reducing greenhouse gas emissions, combating the effects of climate change, creating a better environment, and reducing Canada's reliance on evermore expensive and depleting carbon-based fuels.

You also conveniently, persistently and purposefully neglect to mention Mr. Dion's concomitant and compensatory plan to reduce income taxes for each and every Canadian, especially for those most in need.

Concerted propaganda indeed!

With heaps of hypocrisy:

Harper called the plan a "serious error in judgment" that would have a "devastating" impact.

Well, Mr. Harper, your income trust policy of October 31, 2006 exactly mirrors that statement.

You actually caused what you claimed you were preventing, and you thoughtlessly devastated seniors, retirees and Canadians saving for their retirement.

Advancing to aggrandizement:

"I'm confident that we are the only party that has a 'serious' agenda in many files - not only the environment, but also the economy, justice, health, relations with our partners in the federation," said Harper.

"We are the only party that offers to Canadians a plan to govern, a plan to manage the country during this time of slowing global economic growth, and we're ready to make that case before the public any time."

Yes, Mr. Harper, you and your disciples are the only ones who have all the answers.

You are the apostle - nay messiah - who will lead us all to salvation.

Robert Gibbs said...

July 29, 2008

Re: Jim Flaherty, trust investors' best friend. Seriously
Globe And Mail
Published: July 29, 2008

Dear Mr. DeCloet:

Although I don't wish to be abrasive, I can't help but describe your article noted above as repugnant and insensitive to the millions of income trust investors who were so adversely affected on October 31, 2006 - and who will also be further devastated in the near future - by the Conservative government's and Finance Minister Jim Flaherty's income trust policy.

To so many investors, seniors and retirees, this was an 'epic' betrayal of trust and an ill-conceived policy, as evidenced by the many financial experts who have denounced it and the resultant foreseeable adverse consequences.

Having now expressed my discontent with your article - and especially your headline - I, of course, expect no reticence on your part, but perhaps you could find your humility long enough to review - and perhaps publish (edited or not) - the following commentary concerning the Conservative's income trust policy.


Robert Gibbs

Robert Gibbs said...

Decloet's "flogg-off" response:

Dear Mr. Gibbs,

Thank you for your note. I agree that the Conservatives' trust policy hurt a lot of investors, and the losses incurred after Oct. 31 have been written about -- at length -- in this newspaper and elsewhere. The point of today's column wasn't to revisit all of that, but to look at the state of the trust market as it exists today. I don't write the headlines on my columns, by the way. An editor does.

As to your commentary, I can't help you but if you submit it as a letter to the editor (, perhaps they will publish it.

best regards,
Derek DeCloet

Robert Gibbs said...

How's this for 'tax leakage'?

"...more than $3 billion in 'tax leakage' from the transaction..."


Another LBO Of A Canadian Income Trust Due To Harper's Income Trust Tax

Fording Canadian Coal Trust To Be Bought By Teck Cominco

July 29, 2008 (EDIT)

VANCOUVER - Teck Cominco Ltd. pulled the trigger on a deal to buy the assets of Fording Canadian Coal Trust for about US$14 billion.

Tuesday's bid is for US$12.4 billion in cash and shares worth about C$1.5 billion.

Don Lindsay, president and CEO of Teck Cominco said the structure of the deal is key because of the tax advantages, and the fact the company already owns 20 per cent of Fording.

Teck expects to reap more than US$3 billion in tax benefits from the transaction based on established rules covering the acquisition of Canadian resource properties. It will fund the cash portion largely from a US$9.8-billion loan facility it has arranged with a syndicate of banks.

The deal follows what Fording described as an extensive review of strategic alternatives, particularly in light of the need to address our income trust structure before 2011.

Robert Gibbs said...

Harper Fails To Meet Own Deadline Rules For Disclosing Gifts

The Canadian Press

July 30, 2008 at 6:21 PM EDT

OTTAWA — It seems Prime Minister Stephen Harper has failed to meet his own conflict-of-interest deadline for declaring gifts he received.

Mr. Harper has not publicly declared gifts received since last fall despite being required to do so under new conflict guidelines introduced by his government.

But an official [falsely] insisted Mr. Harper is in compliance with the rules because all gifts are in the process of being disclosed or still being appraised to establish their value.

Under the new conflict rules in the Conservatives' public accountability legislation of 2006, all gifts cabinet ministers receive valued over $200 must be reported within 30 days.

Mr. Harper hasn't reported anything since a present he received during an official visit in October of 2007.

Dr Mike said...

I think there may be some hope for DeCloet--he has softened his line on trusts somewhat & did show some points of reason--however, his comments about Brent to Bruce Benson were disturbing to say the least.

Maybe what we have to do is coddle & baby along these guys with the truth , repeating it over & over again like the master Harper until the points hit home.

It should be easier in our case because what we say is actually the truth--no fabrication , no lies , just the truth.

Growing up in small town Ontario , I was taught that a person was only as good as his word & the truth should always win out.

I think this will happen with this situation as time goes on.

But without the help of the media & a few good investigative journalists , this will take a lot longer.

I say keep sending these guys the truth in a civilized manner & we have to hope that they see thru the ruse of Harper & Flaherty.

Of course , I could be wrong & the influence of the editorial staff may beyond the scope of reason.

I have to remain hopeful.

Dr mike Popovich.

Anonymous said...

I prefer the term "shill".

Robert Gibbs said...

"...a person was only as good as his word..."

Dr mike Popovich.
August 1, 2008 5:02 PM


Didn't Deceivin' Stephen say:

"The greatest fraud is a promise not kept."

Harper, you epitomize the word FRAUD!!!