CAITI News Alert - Election 2008

Dear CAITI Member:

By way of full disclosure I voted for the Stephen Harper Conservative government in 2006. I did so with some serious reservations. Turns out those reservations were well justified, because Stephen Harper promised in the last election:

“You know where the Liberals stand on raiding seniors nest eggs. Whether it is death taxes, or taxing income trusts, a new Conservative government will never let this happen”

Well happen it did, Mr. Harper.

Worse than the broken promise however, was that his premise for breaking his promise, namely tax leakage, is a totally false and fabricated concept.

I have known this since the afternoon of November 1, 2006 when I first came into possession of the report entitled “Tax Revenue Implications of Income Trusts”. This was the study performed by HLB Decision Economics in collaboration with the Department of Finance duirng the Goodale Consultative Round and only made possible because Ralph Goodale approached the matter by way of public consultation. Jim Flaherty did not.

However what Jim Flaherty foolishly ignored was that his policy argument of tax leakage had already been proven to be a lie, even before he began holding it out as his sole policy justification that the media was only too pleased to lap up.

I refuse to be lied to by MY government. As such, the Harper persons in office are no government of mine. Like me, all of you have been lied to on this matter and have paid a price. A price measured by loss of retirement savings, loss of investment choice and a loss of faith in our government, our capital markets and media, who have failed us miserably.

It is for this reason, that I felt compelled to take matters into my own hands and run for office in the riding of Whitby-Oshawa. This is the riding of Jim Flaherty, Canada’s most deceitful, negligent and incompetent Finance Minister to ever hold office.

Ignoring the losses that you have experienced, here is some of the havoc he has wreaked onto our economy with his Tax Failure Plan:

creation of a two tiered pension system in Canada, that places 25% of Canadians who are already privileged by participating in a pension plan, at an even greater economic advantage than the 75% who are not, since their pension plans (unlike our RRSPs) can easily avoid the onerous 31.5% tax by merely buying devalued public income trusts and holding them privately and avoid any new 31.5% tax or any growth restrictions imposed by Flaherty. This explains the bid last week by pension fund OMERs for Teranet, and a whole host of similar “tax arbitrage” trades since Halloween 2006. This is grossly unfair and grossly inequitable
to compound this gross disparity further, Flaherty also granted those Canadians with PENSION income splitting, namely the ability to split their income for tax purposes with their spouse. This only benefits 12-14% of seniors, and hence is grossly unfair and inequitable
to further compound the inequity of this situation, foreign private equity firms can replicate the “carve out” that Flaherty granted the pension plans described above by simply acquiring these undervalued trusts presently held by us, under a leveraged buyout scheme. This is similar to what has occurred with BCE, except BCE skipped one step
these activities to date have caused over $90 billion of takeovers in less than two years, largely done by the above two groups and by others such as Hong Kong billionaire Li Ka Shing or middle eastern oil giant Abu Dhabi energy. It is in this respect that all Canadians are losing from this policy, as it is providing material incentives for foreigners to acquire devalued trusts formerly owned by taxpaying Canadians, resulting in a serious erosion to Canada’s tax base, at a time when we can least afford it.
this takeover activity has resulted in the loss of $2 billion in annual taxes to Ottawa. Once the entire sector is bought out in this manner, the tax loss will rise to $7.5 billion per annum, the equivalent of a 1.5% GST increase.
this outcome is as inevitable as it is avoidable. My goal is pursuing public office, is to ensure that this wholly unwelcome outcome is avoided.
keep in mind, all under a situation where no tax leakage existed in the first place! Hoe much more incompetent does it get than that?
in addition these foreign buyouts and large leveraged buyouts like BCE are being facilitated by another measure of Flaherty’s creation, namely his elimination of the 15% withholding tax on leveraged buyout loans

I could go on forever, but I will not. I have three requests that I would like all of you to all take very seriously and do your utmost to achieve:

(1) Ensure your voice is heard in this election. Like me, do not take no for an answer. Your vocal attendance at the all-candidates meetings in your riding will have a material effect on the outcome of the election in your riding and across the country. This is the means by which you can influence the voting choices of others. Now is not the time for CAITI billboards and CAITI ads in the paper. Your personal and active participation is a vastly more powerful medium. You have all the arguments listed above to make our case. When you get the inevitable lame response from the Conservative candidate or the NDP candidate, whose two parties acting together made this atrocious policy possible, then you simply ask them for the proof. When they offer you no proof, you then confront them with the fact that the absence of proof only proves that this policy fails miserably on the test of accountability and transparency. 18 pages of blacked out documents issued under the toothless Access to Information Act, that were subsequently demanded to be returned is only proof of a government and two parties with something to hide, namely their utter incompetence and unfitness for office.

(2) Ensure you vote, and ensure other like minded people vote. Make the event of voting into a celebration of your democratic rights. Gather your friends and family and vote en masse. Win or lose in this election, we aren’t going away.

(3) Please consider donating to my campaign. I have worked over 2,500 hours on a voluntary basis on this issue on your behalf. The next five weeks will be ten times more important than the last 90 odd weeks I have worked this issue. You can donate on line at :

https://www.liberal.ca/donate_riding_e.aspx?riding=35099

Thank you in advance. Wish me luck. Now is the time to rescue OUR country from those who are determined to destroy it and to rid ourselves of the enemy from within.



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

647 505-2224 (cell)