No, actually it is Harper who is dysfunctional

Stephen Harper is like the guy who loses a coin toss (i.e. upcoming by-elections) and then says: “let’s make it the best two out of three”.

How is this for Harper’s dysfunctional on again, off again democracy du jour:


Harper calls three federal byelections
By THE CANADIAN PRESS
July 25, 2008


Stephen Harper in a file photo. (CP PHOTO/Jonathan Hayward)

OTTAWA - Canadians will get an early look at a general election writ small this fall after Prime Minister Stephen Harper called federal byelections in three ridings in Quebec and Ontario.

The results of the Sept. 8 vote will reflect the impact of the slowing economy on Harper's Conservative party fortunes. They'll also provide an early indicator of any bounce or bottoming out as a result of Liberal Leader Stephane Dion's decision to make the environment the centrepiece of his summer stumping at a time when manufacturing jobs are disappearing in Canada's two most populous provinces.

The Conservatives are actively minimizing their chances in the by-elections, belying significant efforts they're making in at least two of the contests.



Harper calls a 4th federal byelection,
August 17, 2008 |
CBC News

Prime Minister Stephen Harper has called a fourth federal byelection for Sept. 22 in the Toronto riding of Don Valley West, setting the stage for a possible general election later this fall.

Voting in three other federal ridings for Sept. 8 was already announced last month by Harper. They include the Ontario riding of Guelph, and Saint-Lambert and Westmount-Ville-Marie in Quebec.

The Don Valley West riding had been held by long-serving Liberal John Godfrey, who signalled his intention to resign the seat some time ago but didn't make it official until Aug. 1.

A TAINTED ELECTION! A TAINTED GOVERNMENT!

By Ralph Goodale, M.P.

From its first day in office, Stephen Harper’s government has been one of questionable legitimacy.

The Conservatives made two massive, vote-buying promises in the last campaign which they quickly dishonoured. One was never to tax Income Trusts. The other was to pay Saskatchewan $800 million more every year in Equalization.

Such bare-faced dishonesty obviously undermines Conservative legitimacy.

Their position is further eroded by the serious legal questions which have been raised by the Chief Electoral Officer about a Conservative election financing scam in the last campaign.

Respected, independent election officials are investigating whether campaign spending limits were violated at the national level, while illegitimate reimbursement claims were filed locally.

On top of that, the Conservatives benefited shamelessly from the extraordinary and inexplicable involvement of the RCMP in the last campaign. Every credible independent observer says this incident in the midst of the last election had a huge and totally improper impact.

Two and a half years later, Stephen Harper now wants a snap election – in violation of his promise of a fixed election date in October of 2009.

The illegitimate Conservative behaviour continues.

What has the Harper government so panicked that they are prepared to break their word to Canadians – yet again – and even break the spirit of the fixed-election-date law which they, themselves, enacted?

They’re spooked by at least three things on the horizon, which don’t look good for Mr. Harper.

First, the Conservatives will lose all four of the federal byelections called for September.

Secondly, the national economy is getting into deeper trouble, and the responsibility will rest squarely on Mr. Harper’s shoulders.

And third, the investigations into Conservative ethical lapses are exposing more and more illustrations of apparent Conservative corruption and incompetence

Flaherty defends Harper's breaking of the fixed election commitment

“You have to either leave it alone or unfix it,” Mr. Flaherty shrugged Wednesday. “We were going to see the largest telecommunications company in the country not pay corporate taxes, lay off another 1,500 workers bringing the total to 4,000 and continue increasing text messaging fees and other service fees, while grossly under funding its capital investment program, given the $44 billion of junk bond debt caused by my income trust blunder of a policy. That's a clear and present danger to fairness and my re-election chances. I thought we had to act....”

The above mock quote is derived from the justification that Flaherty gave on November 1, 2006 for his broken income trust promise as reported in the Globe, which read:

“You have to either leave it alone or fix it,” Mr. Flaherty shrugged Wednesday. “We were going to see the two largest telecommunications companies in the country not pay corporate taxes. That's a clear and present danger to fairness in the Canadian tax system. I thought we had to act.”





PS: Who is the smaller man in the above photo? Flaherty? Harper?

Bye bye Byelections

Harper’s reasoning for dissolving Parliament is simply beyond reasoning. His reasons, however are far more obvious. He doesn’t want to be on the receiving end of an Outremont-revisited, in which the Liberal’s leadership under Stephane Dion last year was being called into question. These four by-elections presently underway, were called at a time of maximum political convenience for Stephen Harper, or so he thought at the time. Now he is aborting them through his own manipulations of our Parliamentary system. As his empty rationale, he cites that Parliament is dysfunctional. How plausible is that , given that Parliament isn’t even in session?

No, Stephen Harper is engaged in a form of democratic censorship. Uncomfortable with the message that voters are likely to cast in these four by-elections, three of which are two thirds pregnant at this point.....Harper decides to terminate them in the hopes that he can mask the message that will be obvious to all in their results......which is that Harper has gone stale on the vine.

Let’s hope our Governor General is able to see through this ruse for what it is, and deny Harper his chance to truncate the democratic process that is now underway in Guelph, Westmount-Ville Marie, Saint Lambert and Don Valley West.

This is incumbent on her as the Queen’s representative in Canada.....to see these by-elections through to their final result, whatever that may be...and free of intervention at the highest levels of self interest.

CAITI Focus Group

Please provide your feedback on the above billboard that we are preparing for the upcoming election.....assuming Harper decides to break yet another promise, in this case his faux fixed election promise.

Do you think Harper looks better in red or blue... or doesn't it matter?

Question for Michaëlle Jean: Canada or Haiti north ?

Jean Léopold Dominique (July 30, 1930 – April 3, 2000) was a noted Haïtian journalist who spoke out against successive dictatorships.


Harper is planning to usurp the by-elections and the proper functioning of a democracy. A by-election process he began, and now a by=election process he is whimsically terminating for reasons solely related to himself.

This is like robbing a bank....in broad daylight.

The GG should forbid this. This isn’t Haiti after all, the Governor Generals’ country of birth....and the scene of this despicable backwater form of democracy that Stephen “Haiti” Harper has a penchant for.

Over to you, Governor General. Do you wish to play a hand in replicating in Canada, the electoral abuses of the country you fled?



Launch of election campaign expected as early as next week, pre-empting three by-elections


TheStar.com - Canada - PM to meet Duceppe, Layton as vote looms

August 29, 2008
Allan Woods
Ottawa Bureau

OTTAWA–Prime Minister Stephen Harper will be clear to launch a federal election as early as this weekend after he meets two of the three opposition party leaders, Conservative sources say.

A last-minute schedule change will allow Harper to sit down with Bloc Québécois Leader Gilles Duceppe at 11 a.m. today at 24 Sussex Dr. for a highly anticipated discussion on whether the government's agenda for the fall should be supplanted by a campaign and mid-October vote. Harper meets NDP Leader Jack Layton tomorrow.

The meetings aren't likely to throw the election march off course.

Duceppe has vowed to introduce a motion of non-confidence in the government as soon as possible should Parliament actually return from its summer break on Sept. 15. Layton, who initially said the Prime Minister should not ask Governor-General Michaëlle Jean to dissolve Parliament, is also talking tough. He said he doesn't expect to find common ground with Harper and will do nothing to dissuade him from calling a vote.
"I'm going to tell him that if you want to quit your job, I'm going to apply for it," he told CBC-TV from Denver. "I think the fix is in. I think he's going through a charade here."

Harper has already written off a proposed Sept. 9 meeting with Liberal Leader Stéphane Dion, which would come one day after three scheduled by-elections, saying it's a delaying tactic that shows Liberals aren't serious about working with his government.

"All the signs indicate that this Parliament is at the end of its productiveness," Harper said at a cabinet meeting in Inuvik, N.W.T.

In the 308-seat House of Commons, the Conservatives hold 127 seats, the Liberals 95, the Bloc 48 and the NDP 30. There are four independent MPs and four vacant seats.

Still, the strategy behind the timing of the election call remains delicate and two Tory sources said the party hasn't decided exactly when it will launch the campaign.

A government source said yesterday that an election call as early as Sept. 2 "could happen," but it would be a surprise because word had not gone out as of yesterday for Conservative staffers to start clearing out their Parliament Hill desks.

"It'll be at least another week," the source predicted.

A source in the Conservative party added that an election call as early as Tuesday is "unrealistic" as there are still issues to be cleared up such as putting election machinery in place and nominating candidates.

"Everything is very volatile," the source said.

Harper’s “Canadians must trust” doctrine, is looking a bit ragged these days

Canadians must trust.

That was the message delivered to me and probably a couple hundred thousand other Canadians who got sucker-punched by Stephen Harper on his income trust betrayal and who wrote to him in dismay. It took Harper three weeks to come up with that messaging. If you can believe it, Harper felt that his best argument after his blatant income trust betrayal, was to call upon Canadians’ trust. He must think we are as psycho as him.

Canadians must trust?

That doctrine has become increasingly more ragged since it was first spun back on November 23, 2006.

It is worth asking the question....how much trust has Stephen truly engendered in the hearts and minds of Canadians as a result of:

(1) Income trust betrayal?
(2) Firing of Linda Keen, Head of Canada’s Nuclear Safety Commission?
(3) Bribery attempt of Chuck Cadman, as revealed in Harper’s self incriminating tape recorded admissions?
(4) Now you see it, now you don’t, in and out taxpayer fraud?
(5) Farming out of food inspection to industry?
(6) Harper’s pending broken trust with Canadians over his fixed election date commitment?

No doubt, there are those resolute souls out there who think Harper is worthy of their ongoing trust. The skill testing question for them, is simply: Why?

Perhaps it's time for a new cult.

Might I suggest, "Canadians need answers"....starting with items (1) through (6), above.

Harper to outlaw condos after next election to support sagging house prices

Who in their right mind would elect a government that acts to limit one's choices?

Well, Stephen Harper is the head of such a government. For example, he believes in restricting what Canadians can do with their discretionary after tax earnings.

Income trusts were the first choice to be eliminated. He did this to support the sagging interest on the part of savvy investors in corporations like BCE who are very adept at squandering their earnings and loathe to pay dividends to their shareholders/owners.

Next on the list of choices to be eliminated will be home choices, specifically condos. Followed by vacation destinations. That's likely to mean a double whammy if you own a condo in Florida.

Harper is also contemplating a one child per family rule for anyone who votes Liberal or Green in the next election. These measures will be retroactive. Voters for the NDP or Bloc are exempted, as votes for the NDP or the Bloc are as good as a vote for the Conservatives.

The lunatic fringe was right...Harper’s jelly bean agenda is bad for Canada

Think back a year ago. Talk was all about the Montebello SPP Summit and the self interests being advanced by the single gene pool known as the North American Competitiveness Council. (NACC). Single gene pool because the NACC is made up of 10 look alike CEO’s from Canada and an equal number from the US and Mexico. Evidently our political “leadership” thinks that total capitulation to the whims of corporate interests is the way to go. Yippee.

Emblematic of the Montebello summit was the infiltration or otherwise peaceful demonstrators with masked, rock toting members of the Quebec police.......and the Jelly Bean agenda advanced by Canada’s Jelly Bean Tycoon, David Ganong.

The jelly bean agenda philosophy would see Canadian government doing whatever is expedient or efficient for business. Apparently the Jelly bean Tycoon’s ability to compete was totally frustrated by the fact that he had to package his jelly beans in two different packages. One for the US. One for Canada. He wanted one type of package, oblivious to the fact that Canada is a bilingual country. So who better to go crying to than Stephen Harper and George Bush?

Both George Bush and Stephen Harper thought this idea was swell, and that business interests are paramount in our society. The same myopic thinking led to Harper reneging on his income trust promise after falling under the spell of a few of these NACC folk, like Paul Desmarais Jr. Dominic D’Allessandro and Michael Sabia.

Fast forward to today.

These listeriosis deaths of today, caused by the grossly lax inspections standards at Maple Leaf Foods are simply one manifestation of world governed by the Jelly Bean Agenda. The lunatic fringe was making these kind of predictions a year ago. Of course no one listened as the lunatic fringe is lunatic and concerned about public safety. The lunatic fringe also just happen to be right in terms of the cost to Canadians of totally capitulating to the whims and wishes of groups like the NACC....the SPP...or Stephen Harper.

The death toll is now 12, but the NACC will be happy to know that Maple Leaf Foods shares (TSX:MFI) rose more than four per cent Wednesday, rebounding after hitting a new low a day earlier amid a nationwide recall in response to a listeriosis outbreak.

What kind of corporate culture does it instill, when your controlling shareholder is breaking its own rules?

Ontario Teachers' Pension Plan is a major shareholder of Maple Leaf Foods, owning 33% of the company's equity.

As with Maple Leaf Foods, Ontario Teachers is breaking its own rules, by controlling more than 30% of the votes of BCE. Canadian legislators wisely did not want any one pension fund exerting too much influence over Canadian companies or constrain them artificially. Teacher’s does not have the financial capacity to own 50% of BCE. By over-reaching in its investment in BCE, Teachers’ had to resort to destroying the credit worthiness of the company at the cost of $1 billion to its present bond investors and at the cost of dramatically increasing the company’s cost of capital and in turn, BCE’s competitiveness. This financial incapacity on the part of Tecahers’ has resulted in the company reneging on its obligation to pay promised dividends to its shareholders of some $1 billion, the firing of 2,500 employees and the announcement of a capital-light investment plan that will do nothing to see Canada advance in the delivery of state of the art telecommunications.

Teachers’ also leaned on many groups to support its application before the CRTC. One such party was Maple Leaf Foods. It is interesting to read what Micahel McCain highlighted in his letter to the CRTC about what was of primary investment concern to Teachers’:

“Teachers’ recognizes our need to invest in marketing, advertising and community involvement.”

That statement is most insightful for what it doesn’t say, as Teachers’ seems to prefer fluff like marketing and advertising, over the real stuff like investments in product safety and world class facilities, not worthy of mention by Michael McCain to the CRTC.

Here is the full letter



January 18, 2008

Robert Morin
Secretary General
CRTC
Ottawa, Ontario
K1A 0N2

Re: Broadcasting Notice of Public Hearing CRTC 2007-19

Support for the application by BCE Inc. (BCE) to effect a change in ownership and control

As President and CEO of Maple Leaf Foods, I am pleased to submit our company’s support for the application of BCE for a change in ownership and control of the company to a group of investors that is lead (sic) by the Ontario Teachers’ Pension Plan.

Maple Leaf Foods is Canada’s leading food processor, supported by our flagship consumer brands – Maple Leaf, Schneiders and Dempster’s and a family of strong regional brands. We are market leaders across our businesses and intend to sustain strong profitable growth through meeting customer and consumer needs for the highest quality, most nutritious and innovative food products – from farm to fork.

A factor in our company’s success and leading position, Ontario Teachers’ Pension Plan has been a major investor in Maple Leaf Foods for more than 12 years. Although Teachers’ initial investment was a private equity investment alongside the McCain family, their long term investment focus has been illustrated by the fact that they remain a significant investor in our company today, years after the initial public offering of our company.

Teachers’ focus has been one of supporting strong Canadian companies over the long term, rather than expecting a small quick result. Teachers’ supported our executive team and board of directors in our successful efforts to strengthen the business and improve its value, especially our growth strategy which includes strategic acquisitions. Their vision, long term value creation horizon, and keen respect for all our stakeholders has been foundational to Maple Leaf Foods.

Teachers’ recognizes our need to invest in marketing, advertising and community involvement. With 73 per cent of our $6 billion in annual sales generated in Canada, Maple Leaf Foods has a high profile and strong presence across the country, especially as a major Canadian media buyer. We donate one per cent of our pre –tax profits to worthy causes in the form of both cash and in-kind gifts.

We believe the Teachers’-led investment team will provide BCE with the resources it needs for continued and renewed success, as it has, and does, for Maple Leaf Foods.

Yours sincerely,

Michael H. McCain

Harper: "We've lost that winning feeling".

By guest contributor: Kephalos

Let me do a brief "Current Events":

Four weeks ago, Harper called the by-elections for next week.

Two weeks ago, he called another by-election.

Dion's platform has been in the public news for two months now.

I read in the news that the nasty Dion has forced our PM into calling a general election.

But in the last week what changed?

What changed is that the Tory VoteStar has polled in the by-election ridings, and the probings found that the PCP has lost that winning feeling.

Stephen Harper is in a manic panic of reality denial.

He has the scent of a loser.

The method to the Globe's journalistically corrupt madness

The articles in the Globe and Mail, and in particular their titles, are deliberate “plants”, whose main purpose is to afford those whose bidding the Globe does, with “sound bites” to use in the broader public as a defense against arguments for which there would otherwise be no defense. People like Flaherty need to be able to point to articles that are supportive of his position on income trusts, especially in the days leading up to an election. This is why we have people like Derek DeCloet writing articles on July 29, 2008 that read “Jim Flaherty, trust investors' best friend. Seriously” and Rob Carrick writing articles on August 23, 2008 that read “Much-maligned income trusts: Down but not out”

The purpose of these articles is two fold. First, most of the Globe’s readers only scan the titles of the articles. Therefore these titles are intended to leave the casual reader with the false impression that the Globe deliberately intends to convey. These articles are also then often cited by politicians in debate and in letters as a form of third party independent verification of the real world. The Globe and Mail is the furthest thing possible from being an “independent third party verification of the real world”.....as I would expect is becoming abundantly obvious to all.

The other purpose to which these misleading articles are put to, is to provide what are called internet “trolls” who are ideologically aligned with (or paid by) the Conservative Party with material to go around and quell discontent on a given issue. Below is just such an example from the Conservative troll, known as wilson. Strange that he would make this point about income trusts’ value in an article about whether the Governor General should concede to Harper’s Variable Election Date request or not.

Sorry to say, but in my view, the inevitable demise of the print news media can’t happen soon enough. People like Derek DeCloet and Rob Carrick are working overtime to make that happen sooner rather than later.

wilson has left a new comment on your post "Note to Governor General: Just say no....ours is a country of laws ":

Much-maligned income trusts: Down but not outROB CARRICK August 23, 2008Trusts have actually performed quite well as a group in the past year or so, but this is in large part a result of the fact that energy trusts have benefited from the multiyear rise in oil and gas prices. Some other trusts have struggled lately, which is good news for income seekers. As a trust's price falls, the yield on its monthly or quarterly cash payout rises.http://www.theglobeandmail.com/servlet/story/GAM.20080823.STMAIN23/TPStory/TPComment

Posted by wilson to C A I T I - O N L I N E at August 26, 2008 11:22 PM

Crisis? What crisis?

How plausible is it for Stephen Harper to say that Parliament is dysfunctional, and for this to become His rationale for reneging on His fixed election date contract with voters? Parliament is not even in session. If Parliament’s dysfunction had been an issue, Harper should have informed Canadians about that reality back in June.

So why now? Well the reason is most obvious and most telling about Steve and His false bravado. Certain parts of Parliament have been at work this past summer, specifically the Ethics Committee and their investigation of Harper’s In and Out taxpayer scam. In this respect Parliament is working very well indeed. In fact too well for Harper’s personal liking. As such we are merely pawns in the Hands of Stephen. As always, he will do as He pleases.

Meanwhile the Cadman lawsuit has placed Steve’s self-incriminating bribery confession into legal limbo. Just where he wants it. As such, Steve has immunized Himself against hearing His words of self confession spread across the airwaves in an election of His own timing. How convenient.....for Him.

Remind me. Just what is it that we are supposed to like about this guy? The fact that he is arrogant, intellectually corrupt and incompetent?


Harper ups ante on election ultimatum
PM eyes triggering snap campaign unless Dion agrees to meet before Sept. 8; Justice Minister vows not to reopen abortion debate
CAMPBELL CLARK

From Tuesday's Globe and Mail

August 26, 2008 at 3:51 AM EDT

OTTAWA — The rush for a snap election is quickening as senior Conservatives indicated that Prime Minister Stephen Harper might not wait to meet Stéphane Dion before calling a vote if the Liberal Leader does not agree to talks next week.

That could set the stage for a campaign triggered next week, with some Conservatives circling Sept. 5 as the most likely date.

Mr. Harper indicated last week he wanted crisis-atmosphere meetings with opposition leaders within a few weeks before deciding whether to call an election, but that has led to a cat-and-mouse game over the timing of the tête-à-têtes.

Note to Governor General: Just say no....ours is a country of laws

Harper strongly suggests fall election coming, dismisses fixed election date

46 minutes ago

OTTAWA — Prime Minister Stephen Harper has all but stated there will be a federal election this fall, saying his fixed-election-date law won't stop him from pulling the plug on his minority government.

Harper has been ratcheting up the pressure on the opposition parties - particularly Liberal Leader Stephane Dion - for the last month, saying it is time to fish or cut bait.

On Tuesday, the prime minister indicated he won't be waiting to consult all the opposition leaders before making his decision on an autumn vote.

"It's not a matter of polls. As you know, the polls aren't particularly wonderful," Harper said at an Ottawa announcement on funding for Arctic mapping.

"It's a matter of my responsibility as prime minister to make a decision on whether I think the fall session of Parliament can be productive ...

"Certainly spending weeks and weeks playing telephone tag with guys doesn't help me confirm that things are going to be very productive."

Harper said the three opposition parties can't be surprised because they oppose the Conservative government's agenda.

And now that Dion has introduced the Liberal party's carbon-tax proposal, Canadians are presented with dramatically opposed economic plans for the country that must be resolved.

"I think what has changed qualitatively as I have reflected on things over the past few weeks is that Mr. Dion, by laying down his program - his alternative, has now in fact made it impossible for himself and his party to work with the government or find any common ground with the government," said Harper.

As for the three federal byelections the prime minister has already called for Sept. 8, they may not take place.

"We'll have to judge whether it's appropriate to ask people to vote twice in a space of a few weeks," Harper told reporters when asked about the byelections - a powerful hint that the election call is imminent and a general vote will take place before the end of October.

Harper's fixed-election-date legislation that he brought in when he first gained power also appears expendable under the circumstances.

"You can only have certainty about a fixed election date in the context of a majority government," said Harper.

If the majority of MPs want the government to fall, he said, "then it behooves the government to provide some responsibility."

"The country must have a government that can function during a period of economic uncertainty. And if it's not this government or not this Parliament, the public will have an opportunity to decide whom."

Stephen Harper: Breaking solemn promises, one faux crisis at a time

The Globe and Mail is never one to refute Harper’s faux crises. Rather the Globe is Harper’s main promulgator of faux crises:

Harper's Income Trust promise: Broken, based on the faux crisis called tax leakage from BCE/Telus......the Globe had a field day misreporting on that fantasy notion.....cost their readers $35 billion (former readers that is)....why did the Globe not report on the definitive work by Dennis Bruce.....just the numbers produced by the grossly conflicted Jack Mintz? Why did the Globe not report on the fact that neither BCE nor Telus were taxable at the time of the faux crisis.....or on the massive loss of taxes from BCE’s LBO relative to an income trust?

Why did the Globe not report on the Catalyst Proposal and thereby aided BCE’s breaking of disclosure rules for bid circulars? Could it be that the Globe’s owners, BCE and Teachers’ are the real news content editors at the Globe? Here’s an even tougher question. Is today Tuesday?

Harper's Fixed Election date promise: About to be broken, based on the faux crisis called dysfunctional parliament......has the Globe reported on the word by word content of Harper’s 200 page manual of how to obstruct Parliament that is in Don Martin’s possession, which would assist Canadians in understanding just who is responsible for making Parliament dysfunctional......since we already know who is making journalism dysfunctional in Canada;

Harper ups ante on election ultimatum
PM eyes triggering snap campaign unless Dion agrees to meet before Sept. 8; Justice Minister vows not to reopen abortion debate
CAMPBELL CLARK

With a report from The Canadian Press

August 26, 2008

OTTAWA -- The rush for a snap election is quickening as senior Conservatives indicated that Prime Minister Stephen Harper might not wait to meet Stéphane Dion before calling a vote if the Liberal Leader does not agree to talks next week.

That could set the stage for a campaign triggered next week, with some Conservatives circling Sept. 5 as the most likely date.

Mr. Harper indicated last week he wanted crisis-atmosphere meetings with opposition leaders within a few weeks before deciding whether to call an election, but that has led to a cat-and-mouse game over the timing of the tête-à-têtes.

Blah Blah Blah

Green Party Press Release

Press Release – Aug 25, 2008 – for immediate release

$50,000 offered in scholarships if Flaherty will debate income trust tax

An organization which is opposed to Jim Flaherty's decision to tax income trusts has offered $50,000 in scholarships to students in the Whitby-Oshawa riding as an inducement to Flaherty to publicly debate the issue.

”Given the economic turmoil in the Region's key auto sector and the need for higher education, the offer should be accepted,” says Doug Anderson the Green party candidate who is running against Flaherty in the next election.

Brent Fullard the president of the Canadian Association of Income Trust Investors (CAITI) has challenged the Finance Minister to a public debate. CAITI contends that when the Conservative government broke its 2006 election promise to "never tax income trusts" it reduced the equity in existing trusts by $31.5 billion dollars. Much of this was held in personal retirement savings funds and many seniors found their life savings devastated.

The Ministry of Finance claimed that the government was losing too much revenue – that income trusts caused "tax leakage".

However, numerous financial managers such as BMO Capital Markets, Cannaccord Capital and RBC World Markets have crunched the numbers themselves and have found that the tax implications of income trusts were either neutral or even positive.

Both the Green Party and the Liberals have challenged the income trust tax.

When asked to defend the trust tax, the Finance ministry released several pages on which all the relevant numbers were blacked out. The current line from Dan Miles who is Flaherty's Director of Communications is that the "tax decision is now law" and people should "move on".

Green party leader, Elizabeth May stated that “parliamentarians need objective fact based information on how well the Government raises its funds. The Harper government’s actions do not demonstrate the accountability or transparency necessary for the proper functioning of a modern democracy,”

“The public, and especially those seniors who lost their savings, have a right to some answers. It is clear that Flaherty would prefer to avoid this issue, and that’s why Fullard has offered of $50,000 in scholarships as an inducement,” said Anderson.

Flaherty will have to address the issue in the next election as CAITI and both the Liberal and Green parties have vowed that it won't go away.

BCE's idea of Better?

$1 billion less in dividends
2500 fewer jobs
$1 billion less in bond market value
Fibre Optic-light capital investment plan
$800 million less a year in taxes PER YEAR to Ottawa

BELL: The future isn’t friendly

Harper's Own: GREEN SHAFT

Flaherty’s reasons for supporting BCE deal have been proven invalid.....in the first 100 days

Despite the fact that Ottawa will lose more taxes from BCE as a Private LBO versus an income trust (i.e. $800 million per year), Jim Flaherty was supportive of the LBO, even though it also saw BCE’s debt reduced to junk bond status and its cost of capital go through the roof. Here’s what Flaherty said a year ago

“More important, though, he said that the new owners would likely be able to invest in upgraded technology - such as fibre optic wiring to households or the wireless network - that, in turn, will help increase Canadian productivity. Improved wiring to Canadian homes would allow Bell Canada to deliver faster Internet service to its customers, and allow it to keep pace with their cable company rivals.”

Jim: It looks like that ain’t happening.....why should we not be surprised?

Question for Jim Flaherty: exactly where is the upside in the LBO of BCE for Canadians?

BCE moves into the future – slowly

SIMON AVERY
From Monday's Globe and Mail
August 25, 2008 at 3:34 AM EDT


How will BCE Inc. spend money on its business following privatization? Conservatively.

The country's largest communications carrier has chosen an investment plan for upgrading its residential broadband network.

Rather than a massive spending spree to roll out fibre optic cable to all its customers' homes, Bell Canada has opted instead for a more moderate approach that it says is sufficient to compete with cable companies.

Bell announced that it will run fibre-optic cable to condominium and apartment buildings under construction between Quebec City and Windsor.

All other homes on the Bell Canada network will continue to receive signals over existing copper wiring.

The decision is part of a rapid series of changes George Cope, the new chief executive officer, is implementing in his first 100 days at the helm.

Some industry experts consider the move a step backward, saying that previous management had committed five years ago to put fibre in all new developments.

With the latest decision, the company will only offer fibre to new buildings containing 100 or more residences each.

In addition, the fibre stops at the basement.

Bell will run traffic over copper wires from the basement into each new unit of the building.

Mr. Cope and his leadership team face a delicate balancing act. They need to invest aggressively enough to keep pace with cable companies' networks, and they need to cut costs to allow BCE's purchasers to manage payments on about $30-billion of debt incurred to complete their buyout.

"If you polled the average guy on the street who knew anything about buyouts, they'd say, 'Oh my gosh, Bell is going to stop investing.' The neat thing about this announcement is that that's absolutely not the case," said Kevin Crull, president of Bell residential services. "We're investing with discipline in growing markets and where we know we can win competitively."

Most Bell Canada customers will see broadband Internet speeds increase as the company deploys fibre optic cable to neighbourhoods and then relies on older infrastructure to complete the last kilometre. The company is in the middle of a $1.2-billion project to deploy fibre to neighbourhoods. That rollout began in 2005 and should be completed by 2011. By the end of this year, the company expects to have 2.4 million households covered by this method, Mr. Crull said.

The technology, however, does not give Bell Canada the speed of its cable competitors. Vidéotron Télécom Ltée, for example, offers download speeds of up to 50 megabytes per second for $80 a month. Bell's top service is just 16 Mbps and costs more.
Mr. Crull said rivals cannot guarantee those high speeds and their service deteriorates depending on traffic volume. Furthermore, he said, the majority of customers have no use for speeds above 10 Mbps.

Bell Canada has already deployed fibre into dozens of condominium buildings in Toronto and Montreal as part of a test program started more than five years ago. The company developed technology and trained crews for the job, which is just one of the reasons the newly outlined policy falls short, some analysts said.

"Given the dropping cost of fibre gear, Bell's decision is surprising," said Dave Burstein, editor of DSL Prime, a newsletter about broadband. "It may be an attempt to keep operations simple by holding back on new technology."

Flaherty deliberately misled Parliament on the tax status of BCE and Telus

You'd think if anyone would know if BCE was paying corporate taxes, it would be Canada’s Minister of Finance, wouldn’t you? Think again. Here’s what Flaherty told Parliament on November 9, 2006:

Ms. Judy Wasylycia-Leis:
"While we're on the income trust issue, how much did department officials estimate the status quo on income trusts was going to cost the treasury?"

Hon. Jim Flaherty: "Were TELUS and BCE to convert to income trusts as they had announced they intended to do; and then the corporate income taxes that would not have been paid by those two companies, which they have spoken about publicly, in their own estimates, were together in excess of $1 billion next year."

$1 billion in taxes? BCE and Telus? Sorry Jim, the actual number is zero. How could you as Finance Minister not know that? As follows:

December 12, 2006- Bell announces 2007 business outlook ….Bell expects it will have no significant federal cash taxes through 2010, due to organizational simplification enabling accelerated use of Bell's R&D tax credits…

December 14, 2006 - TELUS sets 2007 financial and operating targets Based on a an updated review of the company's tax loss position, TELUS now expects minimal cash tax payments in 2007, a preliminary estimate of approximately $100 million in 2008 with the payment of significant cash taxes largely deferred to 2009, rather than 2008 as previously anticipated."

So what is Flaherty talking about when he said: “[BCE’s and Telus’ forecasted taxes] were together in excess of $1 billion next year.”? The Finance Minister is deliberately misleading Parliament on a pivotal issue of fact.

Meanwhile, you’d think if BCE had been serious about converting to an income trust, they’d have been devastated by Flaherty’s Halloween 2006 announcement that prevented BCE's conversion, wouldn’t you? Think again. Here’s what the Globe reported on November 2, 2006:

“At Telus headquarters in Vancouver, where it was still midafternoon, the reaction was disbelief. In Montreal, the mood was decidedly more upbeat..... and “there was dancing in hallways at Bell” after Ottawa's announcement.”

Dancing in the hallways?

Where did Flaherty ever get the notion that BCE was paying corporate taxes or was on the verge of paying taxes? Why did BCE's CEO not properly inform Flaherty of BCE’s true tax position during the many conversations that took place between the two of them in the days and weeks leading up to Halloween 2006? Was Flaherty misled by BCE? Was Flaherty misled by his advisors in Finance like Mark Carney?.....or did Flaherty know the truth and sought to knowingly mislead Canadians?

It would appear that Canada’s Minster of Finance does not know the difference between corporate deferred taxes and corporate cash taxes. BCE and Telus may have been expected to pay $1 billion in taxes in the upcoming year, however all of those taxes were deferred taxes and none of them were cash taxes.......SLIGHT DIFFERENCE! Flaherty is treating corporate deferred taxes like money in the bank, even though they are unlikely to ever be paid, as deferred corporate taxes are somewhat of an accounting artifice.

Meanwhile when it comes to personal taxes, Flaherty’s treatment of deferred taxes is the exact opposite. Flaherty assigns zero value to the deferred taxes on the 38% of income trusts held in RRSPs even though there is absolute certainty that these personal deferred taxes WILL be paid. As such, tax leakage is a manufacture argument, contrived by Mark Carney, exploited by Flaherty.

Perhaps this is why there was dancing in the hallways at BCE......Flaherty had been successfully misled about BCE’s tax status as corporation?

Meanwhile it’s Canadian taxpayers at large who are being snookered by these false claims of BCE’s lost corporate taxes by Canada's Finance Minister as his central justification for the reversal of Harper’s income trust promise.

Thereafter, BCE became the target of a private leveraged buyout.....the ultimate irony, since the LBO of BCE will cost taxpayers $800 million PER YEAR in lost taxes....relative to an income trust or the Catalyst Recap Proposal.....that BCE's CEO went to every length possible to scuttle via non-disclosure.

I guess, when it comes to Finance Ministers and its shareholders, BCE doesn't believe in full, true and plain disclosure. Ditto the Finance Minister himself.

Dion accuses Harper of "manufacturing a parliamentary crisis that does not exist."

Stephen Harper is the Prime Minister of Broken Promises. He is also the Prime Minister of False Premises for broken promises.

Harper’s fixed election promise is causing him grief....so he manufactures a false argument to “justify” breaking his promise.....Parliament is dysfunctional.....of Harper’s own doing

This is exactly like Harper’s solemn promise not to double tax income trusts. Then he got lobbied by people like Paul Desmarai Jr and Gwyn Morgan.

So Harper manufactured the completely False Premise that income trusts cause tax leakage.....of Harper’s own doing.. Such an argument is totally false and fraudulent as it excludes 38% of the taxes paid by trust taxpayers.

Meanwhile, where’s is the PRESS? The Canadian press are not up to the task of investigating and reporting the truth. Making them 80% complicit in Harper’s $35 billion fraud.


Dion says he will meet with Harper to discuss a fall election
Canadian Press
August 24, 2008

17 hours ago

MONTREAL — Liberal Leader Stephane Dion said he is ready to meet with Prime Minister Stephen Harper.

Dion confirmed Saturday the two men will meet but that no date has yet been set.

The prime minister said in the past week that he wanted to meet with the three opposition parties to discuss whether Parliament would be able to function this fall.

The Liberal Leader said he will ask the prime minister why he wants to overrule his own fixed-date election law.

"What happened in the last few days that justifies calling a general election?" Dion asked during a news conference.

He was responding to the Tories' threat to call an election before fall session begins on Sept. 15.

"Parliament is doing its work," he said.

Dion also accused Harper of "manufacturing a parliamentary crisis that does not exist."

The Conservatives passed a law that set the next election for Oct, 2009, but the legislation contains a loophole that experts say effectively allows the prime minister to call an election whenever he wants.

The Liberal Leader campaigned in the Quebec riding of St. Lambert Saturday for two byelections that will be held in the Montreal-area on Sept. 8.

Harper’s top ten reasons for wanting an election.....NOW:

Top ten reasons why Harper wants an election now:

(1) Harper never knew a promise that he didn’t want to break, in this case his fixed election date promise

(2) The economy is tanking

(3) Harper’s Cadman bribery scandal delay tactic can only work for so long

(4) The economy is tanking

(5) Harper’s In and Out election scandal delay tactic can only work so long

(6) The economy is tanking

(7) Harper’s Mulroney Influence Peddling Inquiry is just around the corner

(8) The economy is tanking

(9) US election doesn’t bode well for George Bush-lite candidates, like Harper

(10) The economy is tanking

Bonus reason: Harper desperately needs to unveil his new list of election promises, in order to commence reneging on them ASAP......did I mention the economy is tanking? Afghanistan is going bad? The Artic’s sovereignty? Obama is still pissed off at Harper?

Harper is pro-life

It is a very wise political move on the part of Stephane Dion to elicit from Harper a clear position on where Harper stands on various issues like abortion.

But we already know the answer. Stephen Harper is pro-life. He is pro-Manulife.He is against investors' right to chose.

Stephen Harper believes in an interventionist form of government that takes away choice......and penalizes those who oppose his dogma, retroactively.

The fact that promised he would do the opposite during an election, doesn’t faze him one iota. Ditto on the fixed election date commitment

One minute he supports the right of investors to chose. The next minute he is pro Manulife. That cost Canadians a mere $35 billion, plus the inestimable cost arising from the loss of choice

Taking away choice, presupposes that the state knows best. The state is imposing restrictions on where you can invest YOUR money. Meanwhile these restrictions do not apply to pension funds.

That’s Harper’s idea of a Tax Fairness Plan:

Pro-Manulife.

Pro-OMERs and the Ontario Teachers’ Pension Plan

And against the right of investors to chose.

My letter to Flaherty

August 21, 2008

The Hon. James M. Flaherty
Minister of Finance

Re: $50,000 Financial Literacy Scholarship Fund


You may have read in today’s Financial Post that I would like to establish a $50,000 scholarship to fund the university tuition costs of a number of worthy business students, in the name of promoting financial literacy.

I know that you have recently spoken out for the need for greater financial literacy in our country, and no doubt you acknowledge the need for greater access to higher learning for those individuals who might otherwise be constrained in their ability to finance the rising cost of a university education. As you probably know, business schools have some of the highest tuition fees of all undergraduate degrees.

I am therefore writing you to inform you that I am willing to establish a $50,000 university scholarship fund at the Richard Ivey School of Business at the University of Western Ontario. Students would be selected on the basis of an essay competition, focusing on the broad topic of financial literacy.

I am willing to proceed with the endowment of this scholarship on the basis that you would be willing to donate an hour and a half of your time to engage in a public debate with me on the topic of:

TFP: “Tax Fairness Plan” or “Tax Failure Plan”?

It is proposed that you would defend the “fairness” side of this debate and I would defend the “failure” side.

The debate would take place in downtown Toronto in a venue to be provided by me and at a time that is convenient to you. The public would be invited and encouraged to donate to the scholarship by way of tickets for the event. My guarantee will ensure that no less than $50,000 would be raised.

The impetus for such a debate came originally from one of your Ontario Member of Parliament colleagues who was quoted in the March 31, 2008 Hill Times as saying:

“I don’t think Jim’s losing any sleep over it. As a matter of fact, I’m sure of it. I’m sure he’d love to go a couple of rounds with these guys in a debate situation.”

“These guys” was in reference to the Canadian Association of Income Trust Investors, of which I am the President & CEO and founder.

You may recall that the Hill Times printed a letter of mine to the Editor in the April 7, 2008 edition of the Hill Times, complete with head shots of both you and stating that:

“Well, if that is truly the case, then we would certainly welcome such a “debate situation” ourselves, and have three simple questions for Finance Minister Jim Flaherty, namely: When? Where? And would you like to bring the 18 pages of blacked out documents of alleged tax leakage, or should we?”

That was the end of that.

The issue arose again in my mind when I learned that your counterpart, the Hon. John McCallum, the Liberal’s Finance critic has agreed to a public debate on September 10, 2008 in Toronto with Seymour Schulich on the topic of the Liberal’s Green Shift policy. A policy, which I understand your party refers to as the Green Shaft.

As intemperate as that language may be, the term Green Shaft is also an apt description, in the minds of many people, for your Tax Fairness Plan. However, those observations are best left for the debate itself.

I realize that you and I may not be the “draw” that John McCallum and Seymour Schulich are , so that is why I am proposing the debate be “underwritten” by me to the extent of guaranteeing a scholarship donation of at least $50,000. The proceeds from our debate would go to a very worthwhile cause, whereas the McCallum debate is a political fundraising activity, which no doubt you would consider a less worthwhile cause.

This is the broad outline of what I am proposing and expect that you would be as willing to debate the Tax Fairness Plan, a major policy platform of the Conservative Party, as John McCallum would the Green Shift, a major policy platform of the Liberal party, furthermore our debate would fund a very worthwhile cause, promoting Financial Literacy at the undergraduate university level.


I look forward to the prospect of your acceptance of this invitation and the debate itself, whereupon the $50,000 will be immediately placed in a trust account payable to the university upon fulfillment of the agreed upon debate.

Please contact me at your earliest opportunity with your decision or to deal with any questions you may have.

Please formally respond to this invitation by way of email at debate@JimHadHisChance.ca


Yours truly,


Brent D. Fullard
President & CEO
Canadian Association of Income Trust Investors (Taxpayers)

Flaherty needs this debate at lot more than I thought

Evidently Jim Flaherty has turned down the debating opportunity that would fund a $50,000 scholarship at the Ivey School of Business for Financial Literacy, citing the fact that the Tax Failure Plan is now law. At least that’s what his spokesperson said. I will only believe it when I hear the rejection from Flaherty himself.

Obviously Flaherty needs this debate more than I thought. Perhaps he is unaware that the tax itself doesn’t kick in for another two years, making his “it’s the law” argument both facile and weak. That’s like saying you are willing to go barreling down a dead end highway oblivious to the fact the road ahead ends in cliff, but the law requires that you proceed recklessly ahead and imperil all the passengers in the car in some version of an economic death wish.

I wonder whether Jim Flaherty is even aware of the fact that the rapacious 31.5% tax doesn’t kick in for another two years?

Meanwhile, had Jim not become conscious of the litany of warning signs that line this highway to hell? Signs like CONSTRUCTION AHEAD: BCE LBO results in more lost taxes than an income trust could ever hope to. Or the sign that says ROAD ENDS: Retirees are substantially reducing their standard of living to fund the private equity takeouts of their grossly devalued trusts. The one sign that really irks me is the one that reads STOP: This Finance Minister is reckless.

I wonder whether Jim Flaherty will be running for office in the next election, or simply running from office?

Here’s what Seymour Schulich had to say about Flaherty’s trip down a dead end highway:

Click here


Bait and Switch:

We hear a lot about “fish or cut bait” from the Conservatives.....how about this exercise in “bait and switch” :

Hill Times March 31, 2008:

"I don't think Jim's losing any sleep over it. As a matter of fact, I'm sure of it. I'm sure he'd love to go a couple of rounds with these [CAITI] guys in a debate situation."Unnamed Ontario Conservative MP


Financial Post August 22, 2008:

"The tax fairness plan is law. The Minister made his position clear before the finance committee and there is no need for further debate," Flaherty’s press spokesperson said.


Only one problem:

The tax was also the law on March 31, 2008 when the debate between Flaherty and CAITI was first proposed by the Conservatives.

I guess those were simply empty words. An exercise in bait and switch....or in this case debate and switch. These people can’t be taken seriously.

The only "green shaft" that I am aware of, is Harper's Tax Failure Plan to double tax income trusts

Liberals must convince voters the Green Shift is not the shaft
Barbara Yaffe, Vancouver Sun
Published: Thursday, August 21, 2008

The Green Shift carbon plan has so far failed to light the fire under the federal Liberals that the party had hoped for.

Part of the problem stems from the fact that leader Stephane Dion chose to launch his new idea in late June, just as Canadians were turning their attention to summer vacation plans. Few people were inclined to ponder Dion's policy on their camping or canoe trips.

While the Green Shift hasn't turned into a green shaft for the Grits, it clearly hasn't benefited them much.....blah blah blah

Meanwhile $35 billion dollars later and the opposite outcome of what was promised, namely tax leakage to replace no tax leakage????

Flaherty's $50,000 challenge ....RSVP required

The proposed debate would be entitled “Tax Fairness Plan" or "Tax Failure Plan”?


Flaherty's $50,000 challenge
Barry Critchley,
Financial Post
Thursday, August 21, 2008


Brent Fullard was an investment banker for about 20 years, a career that included stops at Merrill Lynch, First Marathon and BMO Capital Markets, before retiring in 2003 with a plan to pursue capital markets' ideas that were constrained by the conflicts inherent in a bank-owned dealer.

But retirement for Fullard has been anything but a fade into the sunset. Indeed, he has been busier than ever in pursuing investor advocacy and capital markets opportunities. "It has been remarkably fulfilling and I remain confident that success will be achieved," Fullard says.

The first opportunity occurred in Halloween, 2006, when the Conservative government brought down the hammer on income trusts by decreeing that from 2011, they would start paying taxes. The move, completely contrary to what the Tories said during the election campaign, spurred Fullard into action: He helped form the Canadian Association for Income Trust Investors (CAITI), which mounted a campaign to restore the security of choice for many Canadian investors, particularly seniors who liked the monthly flow of income.

But Fullard, along with CAITI, focused their attention on tax leakage, the ostensible reason for the government's decision. The two commissioned studies that broadly concluded that while there was minimal tax leakage, it was way, way lower relative to the $35-billion "cost" of the government's decision. And Fullard's mood was not improved when Ottawa produced its studies, which showed 18 redacted pages and exposed some fundamental flaws in its methodology.

"If they had shown that there was tax leakage, then a valid reason for their actions would have existed. But that wasn't supported by the facts," he said.

Then along came the BCE privatization. Through Catalyst Asset Management, Fullard met with BCE's directors and developed a proposal whereby BCE shares would be converted to a stapled security. What irked Fullard was not BCE's rejection, but rather that it chose not to make mention of it in all its public disclosures. In Fullard's view, that was a breach of BCE's bid circular disclosure requirements. Concerned that Catalyst's plan wasn't mentioned, Fullard took to the court, first in an appeal court in Quebec and later the Supreme Court.

Now comes word that Fullard is hoping to embark on his next challenge, a debate with Jim Flaherty, the federal Finance Minister, on supposed tax leakage associated with income trusts. In this way, Fullard is responding to a comment attributed to a Flaherty spokesperson in April, 2008, as quoted in the Hill Times: "I don't think Jim's losing any sleep over it. As a matter of fact, I'm sure of it. I'm sure he'd love to go a couple of rounds with these [CAITI] guys in a debate situation."

Fullard's challenge was also inspired by the upcoming debate between Seymour Schulich, one of the country's legendary owner investors and John McCallum, the federal Liberal finance critic, on the question of a carbon tax. Proceeds from the Sept. 10 event will go to McCallum's riding association.

But Fullard's challenge comes with a twist: He will put up $50,000, payable to Flaherty’s favourite charity. Given the Minister's "current crusade on financial literacy," Fullard believes a suitable charitable cause would be an Ontario scholarship for business education. "By doing this we could also help repair some of the damage caused by the Minister's statement that Ontario is the last place to invest."

bcritchley@nationalpost.com

Sorry....I was remiss

I mentioned that I gave Stephen Dion four documents last night at Garth Turner's event in Oakville.

Below is the fourth of those documents which presents my views on how the Liberals need to start messaging the income trust issue.....notice the date:

Garth billed the event as an “idea” session.....think of this is my contribution to the Liberal Party. No tax receipt required:

From: Brent Fullard
Date: Thu, 11 Oct 2007 07:41:53 -0400
To: Herb Metcalf, Andrew Bevan John McCallum, Jim Peterson ,Garth Turner , Scott Brison , John McKay Senator Grafstein , Paul Szabo
Cc: Ralph Goodale

Subject: The Liberal's Messaging on Income Trusts

As a person who has spent an inordinate amount of time on this issue (pro bono) and someone who has been proven correct in his predictions (I wasn’t the only one) about the impact of this policy and its many far reaching effects, please allow me to provide you with some unsolicited advice:

In my opinion, your “messaging” on income trusts is in need of work, as evidenced by Dion’s speech in Edmonton yesterday (income trust excerpts below) . In my opinion this messaging is dated and stale and does not resonate with “the larger audience”. Believe me when I say “Who really cares about restoring two thirds of investors’ lost savings apart from the investors themselves?”.

That messaging of restoring two thirds of the lost value yours was great for February 13, 2007, the day you announced your policy position of a 10% tax. It is clearly not great today, as it ignores all the corroborating events that have occurred since that time all of which are god sends to our cause and in making our/your case . This current messaging will gain you as many voters as it lose voters, witness the editorials following the Calgary consultation a few weeks ago. You gave the press nothing new or substantive to ruminate over, apart from the fact that you were consulting with affected parties which was then cynically portrayed by the press in strictly political terms. You didn’t attack the core falsehoods of this policy or make the direct causal link to takeovers. You didn’t mention the blacked out documents released under ATI. The government’s tax leakage analysis is clearly wrong in that it leaves out 38% of the taxes paid on income trusts. It’s a proven and verifiable fact. You know that, I know that. This is a scandal that is being masked. Who benefits from that?

You have to elevate this issue to the level where all Canadians realize this is negative to them and their children's and grand children's’ futures. That’s easy: loss of sovereignty, loss of general tax revenue. The evidence is firmly in place. Use it. Connect the dots. We’re not making this stuff up or falsely portraying how our issue so readily morphs into vastly larger issues and themes like accountability, transparency, sovereignty, lost tax revenues, hollowing out, betrayal at the hands of government, hidden agenda, gross inequities (pension plan carve out), gross ineptitude (BCE, Prime West) etc.

Make the policy connection. People need to have their “entrenched” views, which have only been established by resonating “intuitive” rhetoric, challenged through the process of “cognitive dissonance” using known facts and subsequent events. Cognitive dissonance is the only way people will rethink their current view on something. People need to be challenged with an “outlier observation” which is inconsistent with their world view and you then offer them an alternative explanation for the entire ball of wax. There are a vast number of “outlier” observations in our quiver. For example, 7 of the 25 largest takeovers of the last 5 years have occurred in the mere 11 months that this policy has been in existence and as a direct consequence of this policy. Many other foreign takeovers will follow. The arguments against this policy are endless.

Which Canadian is unaware about what the reasons for Harper’s shut down of income trusts were?(BCE and Telus), and what ultimately happened in the short space of 8 months (private equity takeout of BCE and the LOSS of $793 million a year in taxes)? How many Canadians think selling our energy to the middle east is a good idea? Prime West is a trust......hmm? Cognitive dissonances takes the form of 18 pages of blacked out documents, BCE going private in face of denial to become a trust. Abu Dhabi purchase of Prime West, Prentice’s non announcement about foreign takeovers maybe yes maybe no solely designed to chill the takeovers without addressing the issue itself and designed simply to avoid further embarrassments from Abu Dhabi’s #2 through 250.

The Liberal party simply needs to appeal to the enormous base of support that is latent in the minds of Canadians. Latent yet visceral concerns about issues like foreign takeovers (72% of Canadians concerned according to recent poll). Canadians innate oncerns about accountability and transparency of government as viscerally conjured up by 18 pages of blacked out documents (92% of Canadian think its wrong – Angus Reid poll).

Play to Harper’s weaknesses and attack his presumed strengths. Is there a hidden agenda with this man? (blacked out documents)! Is he a strong leader? ( Abu Dhabi yes/no!) Does he make good policy decisions? (BCE?) Can he be trusted ( income trust mother of all lies). These questions don’t even have to be explicitly asked. When faced with the evidence in the proper way and framed in the correct context, people will ask these questions of themselves. What is more powerful than that?

This issue is a gold mine that is not being mined properly, less so to make a point about the income issue per se, but for you to make the larger issues that resonate with every voter and not just a handful of voters. Our country. Our democracy.

Let me know if you disagree. I would like to help in any way I can, hence our desire to align our campaign spending with yours for maximum “Liberal” effect. We have a huge vested interest in seeing the Liberals form the next government. So too the entire population, they just need to know why. A lot of good food is going to waste.


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

647 505-2224 (cell)

ROB learns a hard lesson others in a position of trust may wish to avoid

RE: Globe's ROB article of today: BFI learns a hard lesson other trusts may wish to avoid

The Globe and Mail has so many intersecting concepts that it conjures up at any given time to makes its “point du jour”. None of their arguments run in parallel or coherent lines.

Take for example the Glib’s reporting of the BCE situation. The Glib is owned by BCE. Endless amounts if ink were spilt by the Glib making the point about “the primacy of shareholders”. This was the guiding light argument as to why the BCE bondholders were being asked to take a $1 billion hit, despite representations by the company about the essential nature of preserving investment grade credit ratings.

As such, the Glib would have us believe that shareholders, as owners of BCE’s equity are sacrosanct

Now we have this statement in today’s ROB about the nosedive that BFO took:

“What's playing out at BFI is a classic tension between a management team and board that wants to plow cash back into the company and shareholders who want the cash their company generates to be handed over to its owners.”

Tension? What tension? If the owners want the cash, they are entitled to the cash. Much in the same way that BCE had no right to suspend dividends pending Teachers’ yard sale exercise in raising $34 billion in debt.

However in making the above observation the Glib has accidentally revealed what this whole Tax Failure Plan is about........a contrivance that allows Management to assert its “rights’ to determine how excess earnings are deployed as opposed to the Owners.

It only stands to reason that a company that follows the wishes of its Owners as opposed to the whims of its Management is WORTH MORE.

This “worth more” concept is what provided the impetus for companies to convert to trusts.

Conversion to a trust also imposes the legal and tax discipline on management that obligates them to adhere to a payout model of the trust. This is mandated under tax law. Some 95% of excess earnings must be pad out pronto.

MANAGERS like Dominc D’Allesandro loathed such a concept....... he and other CEO’s who were like minded.

They were faced with the inexorable pressure to convert to payout model companies to attain higher values (whilst maximizing tax collection to Ottawa)

They were the people who wanted to kill the trust model. They were only interested in the Primacy of Managers and not the Primacy of Shareholders,

So what did this cabal-at-large do with the help of Mark Carney and Jim Flaherty? They created the canard argument of tax leakage.

Canard: An unfounded rumour.

The other casualty of this cabal was honest insightful business news reporting in Canada....with a few limited exceptions......but no exceptions presently in the Globe and Mail since Steven Chase was reassigned.

The hard lesson for the ROB: The Globe and Mail has lost all credibility and reason on the topic of Flaherty’s Tax Failure Plan

My question for Stephane Dion.....was a gift

Garth Turner holding the mike. CAITI President Brent Fullard speaking

Last night I along with over 1,000 of my closest friends attended the Stephane Dion presentation in Oakville hosted by Liberal MP Garth Turner. (DUI was also there, but I have excluded her from the aforementioned total).

My question for Stephane Dion was a gift. By that I don’t mean that my question was a lay-up softball question, but rather that I presented Stephane with a gift as opposed to a question per se. The gift I provided to Stephane consisted of four documents:

(1) 18 pages of blacked out documents that allegedly are the “proof” of tax leakage
(2) A letter from the Department of Finance requesting the 18 pages of blacked out documents be returned immediately
(3) A Department of Finance memo dated October 31, 2006 stating, in effect, that the double taxation of income trusts will lead to leveraged buyouts of the vulnerable trusts by private equity, which will lead to a loss of tax revenue to Ottawa, as the memo acknowledges the tax advantages to leveraged buyouts
(4) A memo describing to the Liberal Party how they should message this income trust issue in terms of the broader issues involved: broken promise, false pretense for broken promise, complete lack of transparency, no consultation, no accountability, reverse outcome of what policy ostensibly was supposed to achieve, foreign takeovers, displacement of Canadian investors, two tiered pension system, special tax carve out for pension funds., major loss of tax revenue costing all tax payers Etc

These four documents constitute a how to guide for Stephane Dion to win the next election. In Garth’s portion of the presentation he made the point about the loss of jobs under Stephen Harper and used the layoffs at GM’s truck assembly plant in Oshawa as emblematic of job losses. I made the point to Stephane that the layoffs at GM are not something that can be laid exclusively at the feet of the Harper government, whereas the 2,500 layoffs at BCE are the sole cause of the LBO of BCE which was the sole outcome of the income trust double tax that precluded BCE from becoming an income trust. I said these job losses also came with the loss of $800 million a year in taxes to Ottawa from the LBO of BCE.

I encouraged the Liberals to use the income trust failed policy as the basis to point out the incompetence of the Harper government and reveal their deceitful practices concerning the manufactured concept known as tax leakage.

Stephane Dion responded by saying that Liberal Party is committed to its 10% Plan, for which the 10% tax is fully refundable to all Canadians, including RRSPs. As you may know, CAITI has not supported this plan since there it does not jive with the fact that there is no tax leakage and hence why disfavour foreign investors and since the Liberals have not been explicit on whether new trusts will be allowed and whether existing trusts will be constrained as to their growth. That said, the Liberals have taken this issue a long way towards the proper policy position.

Yeah.....on income trusts!

Lawrence Martin’s column of today couldn’t be further from the truth. “Bumbling Grits give Team Harper an economic free ride”

Yeah...on income trusts!!!

The Liberals have an income trust policy......hidden under a bushel. Meanwhile there are two by-elections in Montreal. Are the two Liberal candidates pointing to the direct cause and effect of the CONs/NDPs/Bloc’s support of the trust tax as being SOLELY responsible for the loss of 2500 jobs at Montreal headquartered BCE......let me guess....no.

Would the Liberals be making a huge issue of the 2500 lost jobs at the GM truck assembly plant in Oshawa if the by-election were in Oshawa...let me guess...yes. In doing so would they dostinguish themselves from the other parties? No.

Harper and Flaherty are only tangentially responsible for the lost jobs at GM and are SOLELY RESPONSIBLE for the lost jobs at BCE. Lost jobs and lost tax revenue were the very outcome we were predicting in the first week of November 2006..... via the private equity takeover of BCE/Telus and the 200 trusts.....and all the attendant and inevitable adverse consequences.

So why are the Grits giving Team Harper an “economic free ride”?

Bumbling Grits give Team Harper an economic free ride
LAWRENCE MARTIN
lmartin@globeandmail.com
August 20, 2008
When it was announced that the governing Tories had registered a fiscal deficit for the first two months of the year, Liberals were practically dancing in the streets. Manna from heaven, they told me. The Conservatives were supposed to be the party of economic rectitude. Yet, they'd gone from a surplus of $2.8-billion from the same period a year earlier to $500-million in the red.

It was good news for any opposition party. Except the Grits. They went missing in action. Nothing happened. The story disappeared in a day. Their blowing it caused some consternation within the ranks, complaints to Stéphane Dion's office, finger-pointing at finance critic John McCallum.

That passed, but then came another potential blessing for them. Unemployment numbers. Huge! Fifty-five thousand job losses in the month of July. Biggest drop in 17 years, stoking fears we're heading downstream with the ailing neighbour. But the same thing happened. The Liberals couldn't capitalize. The unemployment story was a one-day wonder. Caucus members were left to wonder: Where are we?

The economy, not the environment, is emerging as the No. 1 issue in the next election, which now seems certain to take place in the fall. The Conservatives keep serving up balls to bat out of the park. The income-trust flip-flop, the savaging of Ontario as a dismal place to invest, two of the biggest-spending budgets of all time, soaring energy prices, and now the deficit numbers and big unemployment tallies. But check the charts. On the question of which party is seen as the better manager of the economy, it's Stephen Harper's Conservatives out in front by a long shot.


"The economy should be a slam dunk for us," said Liberal MP Maurizio Bevilacqua. "But, as yet, it isn't happening." Speaking of the recent Tory deficit numbers, he said: "To me, it was clear you had to jump on those."

The Liberals enjoy some immunity from prosecution on the economy. On other issues such as the environment and ethics, the Conservatives can point, with some effectiveness, to past Liberal failings. Mr. Harper was up to that old trick yesterday in rather sophomoric fashion. He said Jean Chrétien's criticism of his not attending the Beijing Olympics was hypocritical because he had only attended one such Olympic opening himself. Of course, on China, Mr. Chrétien was making a point about the importance of building relations with the world's emerging economic giant. Missing Olympic openings in Seoul or Sydney was hardly a valid comparison.

On the economy, Mr. Harper can't resort to blaming the other side. Paul Martin and Mr. Chrétien erased a staggering $42-billion deficit and put in place economic fundamentals that saw the country go on a long happy fiscal roll. There was, of course, a considerable amount of luck involved, and their tenure coincided with fortuitous international conditions. But they deserve some credit.

"We've got a great story to tell on this," said Mr. Bevilacqua. "We have to refresh people's memories." The Liberals should have had their leader and others out stomping for a week, waving the Martin/Chrétien numbers against those of the Tories. Some party members say they've been making noises, but their noises haven't found the way into the media. That's always a problem. But the test for any political party is to have the moxie to attract media attention.

In the United States, Bill Clinton posted positive numbers just as the Liberals did here. Conservatives then came to power in Washington and have plunged the country into one of its worst deficit crises. It's more fodder for building the case that conservatives should no longer be considered prudent fiscal managers.

Being a willowy styled academic and an expert on things constitutional, the Liberal Leader doesn't carry much heft on the economy. Much of his own economic platform is buried in his Green Shift plan. And there are few big-bang measures with which the public can identify.

But, given the Tory vulnerabilities, that shouldn't stop the Liberals from being able to score points. One idea the party is mulling is to have the men with the economic clout - Mr. Martin and Mr. Chrétien - do some speaking out. Although former prime ministers shouldn't be heard from too often, there are times - Mr. Chrétien didn't do badly on China - they can be most effective. On the economy, with a few pointed reminders of their own record, they could end the free ride the Grits are giving Team Harper.

Green Party accuses Harper of "BREATHTAKING HYPOCRISY"

New Glasgow: Leader of the Green Party Elizabeth May issued a
statement today accusing Prime Minister Stephen Harper of
"breathtaking hypocrisy."

"Mr. Harper has not shown himself to be overly bound to his own
promises, but one might imagine he would honour a law he insisted on
passing," noted Ms. May. "He broke his promises on the full range of
accountability measures, leaving his ministers' doors open to
lobbyists. He broke his promise to Income Trust investors to never
levy a tax on their retirement savings. He broke his promise to
Newfoundland and Labrador and Nova Scotia to honour contracts for
off-shore revenue sharing. And he has completely ignored laws he did
not like when passed by Opposition parties, such as the Kyoto
Implementation Act. With yesterday's comments about ignoring his own
promise enshrined in law to move to fixed election dates, Mr. Harper
has taken hypocrisy to dizzying heights."

"Mr. Harper is quoted as saying (by Canadian Press) that 'They (the
Opposition Parties) have no intention of respecting the fixed
election date.' Let's be clear. The only party whose actions are
constrained by Mr. Harper's law is his own party. The law has the
effect, which Mr. Harper crowed about at the time, of denying him, as
sitting Prime Minister, the option of bringing down his own
government before October 2009. The law contemplated that as a
Minority government, it could well fall sooner than Mr. Harper's
date. There are no constraints in the law on the action of the
Opposition. Thus, the charge that they have no intention of
respecting his law is absurd.

"For months it has been clear that Mr. Harper was chafing at the
limitations he imposed upon himself. His government has out-lasted
projections for its demise. He is running on empty -- no new ideas,
no vision, no plan -- or, rather, at least not one he could sell to
the Canadian public from a minority perch. As a Minority claiming
difficulty in pursuing an agenda, his record of devastating cuts to
key sectors, from Kyoto programmes to the arts, the savaging of
public institutions and assaults on the civil service, suggest a
rather effective exercise of minority power.

"Hoist with his own petard, he has been acting like a bully boy,
taunting the Official Opposition to bring him down. And, finally,
his true colours: He is not going to be constrained by a law he
passed intended to demonstrate his moral superiority over previous
Prime Ministers whom he lambasted for doing exactly what he now
contemplates. Bringing down his own government at a time of his choosing."


"The Green Party of Canada will welcome an election when it
comes. But in Mr. Harper's posturing about a dysfunctional
parliament, we will not allow voters to forget that it was his
combative and belligerent approach, his dictatorial style, his
300-page instruction book to Conservative MPs for how to disrupt
committee proceedings, that have led to this session of Parliament
being a shameful abuse of Canadian Parliamentary tradition." said Ms. May.

The most likely scenario in which trust investors will heed the call to "move on"

Sunset over Lake Muskoka, August 19, 2008

Frank:

I wanted to report that both OFW and I attended the family
memorial/wake for Rick on Saturday at Alliston, Ontario.

We both felt it was good that the trust contingent could be there at the
gathering attended by about 40 family and friends.

Both OFW and I talked at great length on a wide range of issues which are
"still alive" with many of us.

I've blind copied the rest of the trust investors for whom I have an address.

Rick was an honest investor who wanted to survive and to support his
family. He regularly attended all the meetings, both the Barrie 2ND Cup
coffee shop confabs and the full-blown gatherings which TOITS put together.

He will be missed.

Tomas

The "prostitutes" have it

The results of yesterday’s poll are in. By a wide margin, Canadians feel that the Globe and Mail is best analogized as “prostitute” rather than as a “pimp”.

Here are the official polling results:

Prostitute: 71%
Pimp: 29%
Undecided: 0%

Even though this was not a random sampling of Canadians with statistically valid numbers of Canadians representative of all regions of the country, we are going to align ourselves with the Glib’s low scientific standards and present the results as if they actually did meet such standards, much in the way that the Mail and Globe accords the findings of Jim Flaherty’s non existent tax leakage analysis with full scientific and religious certitude.

Dogma can be contagious, as we all strive for the lowest common denominator.

That said, these results have a margin of error of 3.1 percentage points 19 times in 20.

Here are some representative comments in favour of The Mail and Globe is a “prostitute”:

(1) Allow me to be the first one to boldly go...Harper's the Pimp. The Globe's the Prostitute.

(2) Prostitute , but the pimp could be in the running. ROTFLMAO

(3) Its got to be prostitute. To be the Pimp is to control what product is being sold top the common "man". In the case of the Globe & Mail, they are simply following the line put out by their pimps.

(4) Our Canadian values are rapidly being eroded to a commercialized consumer based society. You are also correct to state that in America the populations are so huge that their still remains a healthy number of people that do not tune in. In the case of pimp or prostitute, I would have to say prostitute, the same as Harper, both prostitutes for big business, the real pimps!

(5) The so called news media in this country, the Globe & Mail being the prime example, are nothing more than propaganda agents whose job is to build consensus for what ever screw job our elite want to impose on us. The Globe's reporting on Income Trusts being a good example. So Whore is the term I like. Just like Harper the Whore who peddled his ass out to the Israel Lobby before he was even elected, and after to Power Corp, Manulife and all those other peddlers of mutual funds.

Editor's Note: Personally I am surprised by these results, although I am willing to accept them due to my utmost respect for the democratic process. I would have thought the Globe and Mail was the pimp and not the prostitute, as they are trying to pawn off their unsubstantiated nonsense to us as readers in much the same way as pimps try to sell their wares....lots of lipstick, high heels..........and socially transmitted diseases....in this case real tax losses...foreign takeovers...excessive debt levels...domination by pension funds...lessened competitiveness...reduction in investment choice...decimated IPO market...I could go on forever.

When is a fixed election contract not a contract?.....when Harper's name is on it.

Harper Says He'll Decide Soon on Election Timing

By Theophilos Argitis and Alexandre Deslongchamps

Aug. 19 (Bloomberg) -- Canadian Prime Minister Stephen Harper reiterated allegations that opposition parties are obstructing his agenda and said he'll decide in the coming weeks whether to call elections.

``What I will have to decide over the next few weeks is whether or not we can have a productive fall session of Parliament, or whether in fact a government needs a new mandate,'' Harper told reporters today in Hamilton, Ontario.

Harper's government is 27 seats short of a majority, meaning it must rely on backing from opposition parties to pass legislation and stay in power. Harper, 49, has been in office since February 2006 and up to this month had said he wouldn't use his authority to dissolve Parliament and trigger elections before completing a four-year term.

Under a law that fixed election dates, Canada's next vote is scheduled for Oct. 19, 2009, though one could take place sooner should the government fall or if Harper dissolves Parliament.

Stephane Dion, leader of the opposition Liberal Party, said the government is hampering the work of parliamentary committees and accused Harper of wanting to trigger an election before lawmakers finish a probe into spending practices by the ruling Conservative Party during the 2005-06 election campaign.

Speaking to reporters in Ottawa, Dion said while he hasn't decided whether to bring down the government, voters seem to have more appetite for elections than they did last year.

To contact the reporter on this story: Theophilos Argitis in Ottawa at targitis@bloomberg.net

Globe and Mail: Pimp or prostitute?

I have learned that you have to be very careful around the media when coining an analogy to describe a given situation. For example there was the time I described Jim Flaherty’s utter negligence as being the “Financial equivalent of the Walkerton water manager. Stan Koebel”.

Derek DeCloet of the Mail and Globe took this analogy to the absurd extreme, in order to malign the argument being made, and constructed the false inference of me saying people were killed by Flaherty’s negligent actions, rather than simply Flaherty’s incompetence serving to kill a vibrant $200 billion sector of Canada’s economy.....the death watch of which occurs daily before our very eyes.

As such I need to be more careful when using analogies around the excitable and intolerant press.

Meanwhile, on behalf of income trust taxpayers, I am always searching for new ways to communicate this income trust issue to the more intellectually challenged people in our midst. I have observed that sex is a popular analogy with many of the “lame of mind” out there.

First there was the classic Parliamentary debate in which NDP Pat Martin referred to income trusts as the ultimate corporate “wet dream”. Almost makes me feel as sleazy as Pat Martin, just to write those words.

Then there was the erudite Terry Corcoran who in one of his moments of childish and prurient glee wrote about the Town Hall meeting that John McCallum hosted in Toronto at the Design Exchange as the “Town Hall Lesbian Kiss Off”. I’ll leave it to Terry to attempt to explain that one to anyone interested in that train of logic. Not that logic is a good descriptor when dealing with Terry the Terrible.

All of which leads me to solicit (no pun intended) from you the following question. Which analogous term best describes the gross editorial and journalistic bias that resides within the Mail and Globe on the topic of income trusts?

Do you consider the Globe to be performing the analogous role of:

(1) Pimp
(2) Prostitute
(3) Other

Please advise, as I can ill afford a repeat of the gross misinterpretation by the media over my daring use of the term “Walkerton Water Manager” to describe Jim Flaherty’s gross negligence and incompetence.

I won’t be going out with this until I hear back from you. Thank you in advance.

BFI: Halloween revisited

In today’s government induced market meltdown, BFI Canada Income Fund declined the most in 22 months (hmmmm? that would be Halloween 2006 if I am not mistaken?) losing 17 percent to C$18.45. The income trust that owns a trash-hauling company announced plans, yesterday after markets closed, to cut the dividend and convert to a corporate structure.

The resultant loss of taxes paid to Ottawa from trust distributions otherwise received by Canadian tax paying investors will be exacerbated by the capital losses induced by this double punch exercise in fiscal insanity promoted under, of all names, The Tax Failure Plan

Andy Willis gets it wrong.....once again

Andy Willis of the Mail and Globe got it wrong again in his article today about BFI’s reversion back to a corporation. Andy describes BFI as having “proven skills at turning garbage into cash”.

Meanwhile Andy has proven skills at turning facts into garbage with his statement of:

“In a sector that's consolidating, BFI is effectively blocked from doing large takeovers - which means acquiring additional garbage dumps - due to the two-year-old federal tax rules on trusts.”

Andy darling. Do you even know what you are talking about when you put pen to paper?

There is nothing “effective” about BFI ‘s being “blocked from doing large takeovers”. You are truly remiss. Flaherty’s legislation EXPLICTLY prevents BFI from doing large takeovers. Slight difference!

BFI’s growth in being artificially constrained by Flaherty and those mindless minions in the Department of Finance under a set of Central Planning Politburo rules known as the Capital Insertion Rules that severely restrict the ability trusts like BFI from doing “large takeovers” or growing at their historical rates of growth. Apparently someone in Ottawa thought that was a good idea.....certainly not in keeping with “leveling the playing field”

It appears at the time these Capital Insertions Rules were put in place to EXPLICITLY restrict the ability of BFO to grow, namely October 31, 2006, there was another set of rules put in place at the Mail and Globe, called the Bogus Information Insertion Rules......these rules apply to all articles written by the Globe on income trusts.....only maligning and misleading information is fit to be printed, lest the truth emerge about the gross incompetence of Jim Flaherty and his CTV Bell Globe Media friendly bespoke tax policy.

Would this have anything to do with "Fish or cut bait'?

Canadian Countdown: Flood of Job Losses Coming?
August 19, 2008 | From theTrumpet.com


Amid the global economic slump, Canada’s economy looks set to cool. Is it only a matter of time?

ROBERT MORLEY

Fifty-five thousand jobs disappeared last month. The shockingly large loss was the biggest monthly drop in 17 years. But the employment report shouldn’t be too surprising—warning signs abounded. Now, just like all the people who were partying it up around Noah’s ark when the rain first began to fall, some Canadians are finally beginning to wonder if a flood really is coming.

The employment figures, which economists called “extremely ugly ” and “stunningly bad,” follow months of on-again and off-again job creation and job losses. Although July’s figures were by far the worst so far, Canada has generally shed jobs since April.

The reality that Canada could be on the verge of a significant slowdown seems to be finally sinking in—55,000 job losses in one month for an economy the size of Canada’s is very significant. “I think it’s fundamentally changed a lot of people’s views of the Canadian economy,” said Michael Gregory, a senior economist at bmo Capital Markets.

The job-loss report follows a news release by Statistics Canada that revealed that the economy contracted once again in May. Bloomberg reports the surprise contraction was the fourth decline in six months.

Conditions in Canada could be about to get a lot worse.

Look to the U.S.

There is little doubt that Canada’s biggest trade partner is now in the throes of recession. America has shed jobs for seven months in a row. And Barron’sfigures show that gross domestic product actually shrank in the second quarter. America’s housing market is in free fall, the banking sector remains frozen, and consumer spending looks like it is now constricting.

Spillover effects are heading northward. “There’s clear evidence that the U.S. economic slump is dragging down Canada’s economy,” said Sal Guatieri , senior economist at bmo Capital Markets. “It just doesn’t look good.”

Canada is hugely dependent upon the U.S. market. An astounding 78.9 percent of all Canadian exports are sent to the United States. Canada’s next-largest trade partner, the European Union, is a final destination for a paltry 5 percent of Canadian goods. If America’s economy stalls—and that is what is happening—Canada’s will stall too.

There is a reality in the land of the Great White North that sometimes gets forgotten: What happens in America eventually happens in Canada, it just takes a little time. More job losses are on the way.

For example, the Canadian housing market looks eerily similar to America’s in 2005 or 2006, just before it began its drastic reversion to the mean.

A recent report from investment bank Merrill Lynch says house prices in Canada are clearly in bubble territory, with cities in the West especially so. The economic analysis, titled “Peaked: Canada’s Housing Market In Depth,” warns home prices are heading for a sustained downturn.

“We’re most concerned about Saskatchewan, where the doubling of house prices in both Regina and Saskatoon over the past two years has led us to estimate that these markets are now close to 50 percent overvalued—a level that our research denotes as the beginning of the ‘extreme’ zone where bust risks rise materially,” said the report (emphasis mine). After Saskatoon and Regina, the most overvalued homes are in Victoria, Vancouver, Edmonton, Sudbury, Calgary and Montreal.

The report stirred a firestorm of protest, from realtor associations and housing industry representatives, who claimed the report was flawed and that local conditions suggest home prices have not overly appreciated. In July, Finance Minister Jim Flaherty also said: “There is no bubble in the Canadian housing sector, that has not been our concern.”

But to someone living in the U.S., the protests sound all too familiar.

During the lead-up to America’s historic housing bust, the airwaves were filled with the same sort of claims, from the same sort of people, as to why there was no bubble. Federal Reserve Chairmen Alan Greenspan and Ben Bernanke, the president of the National Association of Realtors, various lenders, builders and other government officials all claimed that soaring housing prices were sustainable—even as prices doubled, tripled and shot to multiples of household income.

Then came the worst bust since the 1930s.

And the recent legislation announcement by Mr. Flaherty, designed to help prevent a possible housing bubble, may have the unintended consequence of helping to pop it. The changes, due to take effect later this year, include ending government-backed 40-year mortgages, and requiring buyers to have a minimum down payment of 5 percent. Both are sound recommendations, but the side effect is that the new legislation will reduce the number of home buyers able to get a loan. Thus, current demand for houses will fall, home prices will come under pressure and fewer homes will be constructed.

Economists note that national sales of existing homes fell at an annualized rate of 14 percent in June—the largest decline in a decade. Canadians beware: As America found out, once sales start declining, it is only a matter of time before prices begin to fall too.

That’s not to say that home prices will not keep rising in certain areas for a while. America’s bubble lasted longer than many expected, and there are a few isolated areas where prices are still holding up. But when bubbles do pop, it doesn’t take long for the air to come rushing out. Just ask all the granite countertop salesmen, real-estate agents, and loan brokers in California. Or ask all those who lost their deposits at the failed IndyMac Bank, or shareholders at the soon-to-be-bailed-out Fannie Mae and Freddie Mac mortgage lenders.

A collapsing housing market will have grave implications for the Canadian economy. Although the housing and related industries may not have grown to quite as large a proportion of the economy as they did in the U.S., they were still responsible for much of the job creation over the past several years. As of 2006, the construction, real-estate, finance and insurance industries originated over a third of Canada’s economic activity.

If Canada’s housing market follows that of America, increasing job losses will soon start to hit the headlines. Rona, Canada’s biggest home improvement retailer, is already reporting signs of stress. Profit has dropped for the third consecutive quarter and the chain spent $2.8 million to close stores and sell assets.

Canadian banks will be hit hard too. Many Canadian banks are already suffering losses due to exposures in the U.S. Falling home prices in Canada will lead to mortgage delinquencies, and repossessions in their home markets, resulting in a double whammy to company finances.

But for now, the housing market, at least in western Canada, powered by high natural resource prices, seems to be holding its own.

The West Covering for the Rest

Western Canada is reaping the benefits of a massive global commodities boom. As oil, natural gas, potash, coal and grains have gone through the roof in price, the resource-producing economies of Alberta, Saskatchewan and Manitoba have zoomed.

There is no doubt: If resource prices maintain their upward trajectory, it will help parts of the economy—but it won’t save it. Mining and agriculture originate less than 6 percent of Canada’s gdp. Most of Canada’s economy is consumer spending—and far more people are employed in industries like construction (which may be poised to rapidly contract) and manufacturing (which has been contracting for years) than in the resource sector.

But for now, the good times continue to roll for many. The West is booming, covering for the rest.

But the rest of Canada, especially Ontario and Quebec, is in a very different financial situation than the West. The two manufacturing provinces of Canada are starting to resemble the Michigan Rust Belt—abandoned factories, growing unemployment, and a falling standard of living. In July, Ontario lost 45,000 jobs, the highest monthly loss in 18 years. Bell Canada announced it is shedding 2,500 management positions, and Ford said it will be canceling another of its assembly lines, leaving 500 more workers unemployed. In New Brunswick it is estimated that half of all households are just three paychecks away from financial difficulty.

Canada remains on edge. But deteriorating economic conditions in Canada and around the world are sweeping it to the precipice. The first drops of a job-loss deluge are being felt.

A global financial crisis is on the way, and Canada will not escape the coming flood.

To find your boat for the coming storm

The Jim Flaherty equal opportunity fund raising debate

It wouldn’t look good if John McCallum out fundraised Jim Flaherty by way of John McCallum’s upcoming debate with Seymour Schulich at $1,000 a ticket on a major policy platform of the Liberals.....the Green Shift.

How many of you out there would pay $1,000 a ticket to see Flaherty debate Brent Fullard on his magna opus Tax Fairness Plan? This would be a chance for Flaherty to make good on his MP colleague’s empty promise of April 2008 in the Hill Times that:

“I don’t think Jim’s losing any sleep over it. As a matter of fact, I’m sure of it. I’m sure he’d love to go a couple of rounds with these [CAITI] guys in a debate situation.”

Come on Jim. You’re the Finance Minister of the Entire Country as you like to call yourself. How about a debate? You are sure to blow me away. Who knows, perhaps you can fulfill Terry Corcoran’s stated desire to vaporize me.....in person no less.

John McCallum’s going to make you look awfully lame in the fundraising department. You might lose your standing in the party. Attack ads need funding.

How’s about it big guy? How about about if it was underwritten for a minimum $50,000? Is that worth an hour of your precious time?

Dan Leger’s social science lesson for the day

Four of the 11 comments on Dan Leger’s column of today:


MLR wrote:

I agree with everything HRM posted and "weathered storms over the Atlantic accord fiasco and the decision to tax income trusts, to name but two of their battles" Don't be so sure Dan! Income Trust investors haven't all died off. We are just waiting for our opportunity to vote Harper and his henchmen out of office! The sooner the better. Look what they did to Ontario if you folks want to know where this country is headed!

Closely Watching wrote:

Harper has NOT weathered his Income Trust betrayal. We seniors that were lured into believing Harper's promise of 'safe harbour' for our retirement savings have not forgotten and will not forget. Many seniors who were not conservative voted for the Conservative party based on Harper's promise to not change the taxes on Income Trusts. He achieved his minority by leveraging this issue with seniors. He has not improved in the polls because he betrayed us, pure and simple. You, like Harper, underestimate the numbers and power of the seniors who have been hurt by this betrayal. You can't make a tax hit of this magnitude that takes away seniors hard earned saving and expect them to just 'get over it' or 'forget about it'. This is personal for hundreds of thousands of us and we won't rest until Harper is gone. You, however, are correct about one thing...it's time for an election.

brauman50 wrote:

Anyone that would cheat his countries Seniors out of C25 Billion with a lie should be removed from office. Don't forget the Halloween Masacre. It's payback time. Call for a new election and return the money to the Seniors. Dion, Do what is right for the people.

sailortwo wrote:

"Weathered the storm on income trusts?" Don't believe it! Hundreds of thousands, possibly millions, of investors, many seniors such as myself, are waiting for a chance to vote the would be dictator Harper and his gang out of office. The media feels the income trust outcry has subsided, mainly because they refuse to study the subject and publish letters from outraged investors. But check out the Internet, this is where you'll find the truth.

Maxine Bernier's Oath of Exemption

Privy Councillor Oath which is sworn as well as the Oath of Allegiance to the Queen on the day they become Cabinet Ministers:

I, (insert name) , do solemnly and sincerely swear that I shall be a true and faithful servant to Her Majesty Queen Elizabeth the Second, as a member of Her Majesty's Privy Council for Canada. I will in all things to be treated, debated and resolved in Privy Council, faithfully, honestly and truly declare my mind and my opinion. I shall keep secret all matters committed and revealed to me in this capacity, or that shall be secretly treated of in Council. Generally, in all things I shall do as a faithful and true servant ought to do for Her Majesty. So help me God

Notice that there is nothing in here about doing good for Canadians? It’s 100% about ass-covering.

Question: Given that Julie Couillard is being blamed for the lapse of secrecy concerning confidential government papers left in her residence by Maxine, did Julie Couillard swear to this or did Maxine Bernier? My eyes were somewhere else at the time.

Don Martin needs to act now to exonerate Harper: Our PM of False Pretenses

The interesting thing about my line of work is that a “no” is as good as a “yes”. It some cases even better.

In this case, “no” took the form of a “nah”.

For reasons that didn’t make much sense, Calgary Herald journalist Don Martin was unwilling to respond in substance to this indirect request I made of him several days ago:

“Speaking of Committee Hearings, when is Don Martin going to release his copy of Harper’s 200 page manual of how to obstruct Parliament? I think it would be an important public service. Might swing a few votes in Harper’s direction?”

Since that email, we have learned that Stephen Harper may call an election, citing the dysfunctional nature of Parliament as his excuse.

Don Martin was kind enough to contact me today, to which I responded:

“Don; I appreciate the response. Are you saying the full text of 200 pages is available? Brent

To which Don Martin responded:

“Nah, most of it is just photocopied procedural paper anyway. The juicy stuff is a slide show given to the chairs that was only about 30 pages.”

Oh that’s most interesting. Why am I not surprised? It’s not a 200 page manual on how to obstruct parliament. Instead its a 30 page picture book on how to obstruct Parliament. In any event it’s germaine to whether Harper’s reasons for calling an election are events of his own creation, and hence a false pretense, or events not of his own creation, hence quasi-legitimate.

In my last attempt to get information from Don Martin to exonerate Stephen Harper from the charge of being the Prime Minister of false pretenses, I sent this last furtive request to Don Martin:

“In that case please send it to me and black out any indications of your source. This has become relevant to today's political debate. Stephen Harper may be using false pretenses of a "hung parliament" to call an election that only serves his interests. Harper is the master (?) of false pretenses. Just look at tax leakage as the false premise for his broken income trust promise/fraud.

I will nominate you for the Order of Canada. Don Newman feels lonely up there. Thank you in advance.”


To which I have received no response from Don.

Maybe the aforementioned Don Newman O.C. or Susan Bonner of the CBC can have better luck than I in getting Don Martin to share what he knows. The spin has to stop somewhere?

Stephen Harper: The straight talk express?

Election 2006:

“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”

October 31, 2006: CBC News

"Flaherty imposes new 31.5% tax on income trusts"

November 1, 2006 in Question Period:

"The commitment of this party was not that we would have no taxes for Telus. It was not that we would have no taxes for BCE. It was not that we would have no taxes for foreign investors, or no taxes for major corporations. It was a commitment to protect the income of seniors."

April 18, 2007 Financial Post

FLAHERTY'S TAX CONUNDRUM

BCE Privatization Could Cost Him $800-Million In Tax Leakage; More Tax Loss Than From BCE & Telus As Trusts!

June 6, 2008:

BCE suspends payment of dividends

July 28, 2008:

BCE's new owners permanently cutting 2,500 workers

My advice for Stephen Harper: Look both ways before crossing a busy street. You might get run over by your own Straight Talk Express. Why would anyone take you seriously in the future? Seriously?

Dan Miles promotes "Journalism for slobs"

I have to thank Eric Reguly, he of the glib and male variety, as the inspiration for this title, for it was Eric who set the tone for the debate on income trusts, with his article in the aptly named ROB magazine of March 2005 entitled ”Capitalism for slobs."

It was Eric who also called for income trust lobbyists to be entombed in concrete and thrown into the lake. That’s Eric’s idea of a debate...with dead people.

Meanwhile Terry Corcoran’s idea of a debate is to vaporize certain people who disagree with him....more dead people to win debates with. And these are Canada’s two leading newspapers?

Actually it is quite sad, as well as most revealing.

My original approach to the media was not to attack them, but rather to educate them. This involved many one-on-one meetings of a typical duration of one hour in length or lengthy conversations over the phone followed up with various reports and the like. After all, the facts in support of income trusts are extensive, and all from credible sources.

Meanwhile the concept of tax leakage has the validity of the manufactured concept that it is. Believing in tax leakage in 2008 is the equivalent of re-enacting the Salem Witch Trials or practicing Fiscal Policy Creationism.

About a year ago it dawned on me that probably 80% of the blame for the income trust fiasco resides with journalists. It didn’t have to be this way. However it is the assumed role of journalists in society to challenge the veracity of government pronouncements. Politicians are predisposed to lying, in one form or another. It’s endemic to our political system. Citizens look to journalists to protect them from these lies and to ferret out truth from fiction.

And yet how much “push back” is evident in this comment of November 21, 2006 from a Globe and Mail reporter?

“To paraphrase Maggie Thatcher, we also met with Flaherty, and the gentleman is not for turning. The government isn't going to change. & judging from my e-mails and work by analysts such as your former partner Diane Urquhardt (sic), there's a lot of retired folks who are not loving trusts these days.”

Evidently this guy had given up before even starting. There will be no Olympic Gold medal in journalism for this guy. That’s for sure.

Legitimately displeased with the performance of journalists, I have made my displeasure known as well as the detailed reasons for my displeasure.

Over the weekend some of you may have received an email from Dan Miles. Jim Flaherty’s Director of Communications, that read:

“Now trying to tarnish the reputations of me, journalists, MPs, economists, investment advisors.... Anyone who disagrees with you.... Is not healthy. Please everyone out there, let's help our pal Brent.....”

This is quite the concept, except I have no control over any one’s reputation except my own. The interesting part of this comment is the notion that I am trying to tarnish the reputation of journalists, or anyone else for that matter. Investment advisors? Surely he’s not referring to Diane Urquhart? That’s a whole subject unto itself.

If a person were to stop and think about this for a moment, it is Dan Miles who is actually doing more in contributing to these people’s potentially diminished reputations, than I ever could hope to, assuming that was even my goal. After all, it is not I who is spoon-feeding journalists with false information, cooked up analyses or cherry picked data. I am not the one setting these people up. That is the role that has been assumed by Dan Miles. Evidently, he is paid to do that as detailed in his interview with the CBC of February 2, 2007, in which he stated:

“I think that the biggest thing that the communications on the government's side can bring to the table and what they try to focus on is anticipation. You have to be able to anticipate the question, and then you have to be able to anticipate the issue and then you can go from there to try to craft a message to try and get you message out… "put out the fire" so to speak.

I've had in the time that I've worked in government I've seen the challenges posed by trying to communicate a bad policy.

Basically what you are trying to do for journalist is to make it easy, and make your lead their lead. That is a crucial part of what we do.

To be good at what we do, we have to make it as easy as possible for journalist. They shouldn't have to be reaming through reading pages and pages and paragraphs of material to try and find what we are trying to tell them.”

Then you develop an event. And this depends on the gravity and importance of the policy, as there are a number of factors that determine what your event is going to be. And then if it is deemed that is to be of great significant then obviously you are going to develop an event [BCE’s faux announced conversion?] and what is the picture of that event going to be? This is crucially important because at the end of the day it is going to be the picture that is painted that will be in the minds of Canadians.”

Enough about Dan the media manipulator. Meanwhile my goal has been to help journalists. This has proven to have been a somewhat futile exercise, as many journalists are demonstrating that they are not up to the task of being helped.

Part of my current approach is “tough love”. Contrast that to Dan Miles approach which is best characterized as “tough luck”. How many of you journalists out there who have relied on Dan Miles for spoon fed “leads” and “developed events” that have been served up in a way that has been made “as easy as possible for a journalist”, actually believe that Dan Miles will be there for you when you take your inevitable fall?

Do you people actually believe that Canadians aren’t going to get to the bottom of the fraud known as tax leakage? Perhaps that’s where Canadians-at-large differ from journalists-at-large, since these people they didn’t accumulate $35 billion in savings by performing jobs that were “as easy as possible”. These people worked for this money. They aren’t going to let some tin pot incompetent Prime Minister steal it from them, and certainly not through a process known as “journalism for slobs.”, as best exemplified by this comment by a Toronto Star reporter:

“I didn't explore the possibility that [Flaherty] was lying. Perhaps I should have.”

To which Dan’s response would likely be: “tough luck”, since journalists’ reputations appear to be the furthest thing from Dan’s scheming mind of deliberate deception and total obfuscation.

Don’t say you weren’t adequately forewarned. Enjoy your reputations while they last. Remember, I am the enemy, as I represent the truth that needs to be quashed.....or vaporized....maybe concrete?

Jack Mintz should be charged with impaired policy driving

There's nothing more dangerous than Jack Mintz's theories on the fly. First his wild and unsubstantiated views on tax leakage and this piece from April 2007 below espousing the virtues of trust takeovers.

His thinking is impaired by his huge bias against trusts on behalf of the special interests he advocates on behalf of, such as corporations-at-large (like Brookfield Asset Management on whose board he sits) and US Private equity firms who he gives tax advice to with the view to eliminate the payment of taxes in Canada.

Meanwhile Jack Mintz can hardly be viewed as being independent of the Department of Finance either, since he worked there and remains tied to them. He is the Department's surrogate spokesman and public foil.

Professors should be licensed as truly independent and/or certified as competent before they are allowed to run reckless over the Canadian economy with their wacky ideas cum hidden agendas.

Perhaps Jack Mintz can describe how well this lame post-action-rationalization theory of his panned out for BCE or the now 45 trust takeouts:

Tax expert says change in ownership could result in better management, productivity

STEVEN CHASE
Globe and Mail
April 4. 2007

OTTAWA -- Ottawa's hefty income trust tax is making trusts more vulnerable to takeovers -- but that's not necessarily a bad thing, because ownership changes tend to usher in better management, a leading Canadian tax expert says.

Jack Mintz, a business economics professor at the University of Toronto's Rotman School of Management, says trusts were shielded, to some extent, from takeovers prior to the federal trust tax announcement because their relatively high market values made purchases more prohibitive.

"It allowed managers maybe to avoid the threat of takeover -- and therefore encouraged inefficiency," said Mr. Mintz, who's not a fan of the trust structure.

"There's a lot of Statistics Canada evidence now to show that even foreign companies have done a pretty good job of running Canadian companies and improving their productivity -- that maybe this is all not such a negative thing after all."

here have been 12 takeovers of trusts announced or proposed in the five months since the Harper government announced a surprise 31.5-per-cent tax on income trusts, according to Deloitte & Touche.

The measure put downward pressure on income trust unit values, increasing the incentive for outside buyers to scoop them up. It has also made access to capital for these business more difficult.

Prof. Mintz says trusts could end up being run more efficiently and productively by new management.

"When you are operating as an income trust and have the high valuations at that point -- and the very high distributions -- it made it difficult for someone to come in and do a takeover based on such a very high valuation," Mr. Mintz said.

Finance Minister Jim Flaherty sold the trust tax as a way to recoup tax revenue that these corporate structures were not paying, but critics say the measure will ultimately cost Ottawa money as takeovers put trusts in the hands of entities, including foreign private equity funds, that won't pay Canadian federal taxes.

New foreign owners of trusts would pay less Canadian tax, says Ogilvy Renault LLP's Leonard Farber, a former Finance official. "Foreign takeover will result in less tax at both the federal and provincial levels," he said yesterday.

First, he said, there'd be no more tax revenue from Canadian investors, who generally pay tax at a higher rate than corporations.

"[Also], private equity will load up debt in Canada on the strength of the Canadian asset base, rendering the operation basically non-taxable in Canada, and interest crossing the border will be free of withholding tax."

Jim Flaherty's Communications Director attempts to discredit CAITI's President

You may have received an email today from Dan Miles entitled "URGENT Help Brent". If not, see below.

Please be advised that I have no association with Dan Miles whatsoever, despite his attempts to portray himself as an agent of mine.

Dan Miles for those who probably don't know is Finance Minister Jim Flaherty's Director of Communications and a very effective spokesperson........for our cause.

That's because every time he offers up new "facts" or "explanations" for past or present activities, the government's lies and orchestrated cover-up become ever more apparent.

The truth means nothing to Dan Miles. He probably doesn't even know what the truth is. Let me provide two examples. One facile. One anything but.

Facile example:

Yesterday Dan Miles lamented on the fact that I must be working from "a small dark basement". I informed him that I was actually working from my cottage overlooking beautiful Lake Muskoka. Furthermore, my cottage doesn't even have a basement that is habitable. And yet in today's email we have Dan Miles proceeding with his false claim about my desperate circumstances and working from my basement. He liked that version of "reality" better, so he ran with it. But then apparently, that's his job: professional promulgator of falsehoods.

However this issue has nothing whatsoever to do with me and everything to do with tax-paying Canadians and the proper functioning of a democracy, which leads me to the less facile point

Less facile example:

Let me describe the income trust matter to you on a FACTUAL basis.

Harper made a promise. Harper broke that promise. Happens all the time with politicians, with two exceptions however:

(1) People lost $35 billion AND lost an essential savings vehicle.

$90 billion in related takeovers have ensued that have caused real tax leakage amounting to $2 billon a year. Meanwhile pension funds can exempt themselves from this tax, even though only 25% of Canadians belong to such pensions.

(2) The PREMISE for the broken promise is completely false. This is the lie part of Lie Conceal Fabricate.

Unlike global warming, tax leakage is a readily discernable and non-debatable construct. By its very nature, it is an absolute. In Flaherty's case however, it is an absolute lie.

Flaherty and his intellectually corrupt minions like Mark Carney (or is he the actual boss?) then go about fudging the tax revenue analysis and fudging the methodology to "cook up" some bogus argument for tax leakage by leaving out 38% of the taxes paid by the income trusts held in RRSPs.

Correct.....a mere 38%.

On that basis, Flaherty would never have passed his bar exams if the Bar Admissions had arbitrarily left out 38% of his marks. Perhaps we would all be better off if that had been that case, but that's not the point. The point is the government is lying to us. Dan Miles is responsible for promoting those lies of his boss. Income trusts do not cause tax leakage. The Government's fraudulent analysis causes tax leakage.

That's why Flaherty's Keystone Cops in the Department of Finance demanded that the 18 pages of blacked out documents issued under the ACCESS TO INFORMATION ACT be returned. RETURNED?. See attached letter.

How desperate and self incriminating is that? The only thing I can think of that is more desperate and self-incriminating than that, is Dan Miles' email to you of this morning.

Thanks Dan. Keep up the good work. We would be nowhere if it weren't for you. You must live by the Department of Finance credo enunciated by Brian Ernewein at the Public Hearings:

"If we were incompetent, we wouldn't admit to it"

Final word: No admissions necessary, since it's become abundantly self-evident at this point that Flaherty & Co. ARE incompetent

PS. Dan: I have three email lists. You are only on one of them. You missed the other two. Would you like me to forward your self incriminating plea to them as well? Would you mind if I posted it on the CAITI blog for maximum exposure?

PPS. Dan: Why the ongoing preoccupation with my occupation? You must understand that fighting to expose the corrupt Harper government is a full time job....and most rewarding.

PPPS. When is your party going to make good on that empty boast that "Flaherty would love to go a few rounds in a debate situation with those CAITI guys"? Simply name the time and place. Would my basement be a suitable venue?


On 8/16/08 7:19 AM, "Dan.Miles@fin.gc.ca" wrote:

> I am appealing to everyone on this email list, journalists, investors, MPs,
> Senators, businesspeople to find it in your heart to help Brent (Captain Spam)
> find a job.
>
> For the past couple of years Brent could be found in a small dark basement
> behind his computor sending endless emails. We all know Brent is far better
> than this. He has far more potential. In fact, he assures me his skill set
> goes well beyond just typing.
>
> Before he expends all of his intellectual capital in this way, please help
> him. Please send any job openings directly to him, I am sure he would be most
> appreciative.
>
> Brent is capable of so much more and you can help.
>
> Thanks in advance for your assistance. I am scouring the want ads this
> morning.

Who’s the bigger hypocrite? Harper or the Toronto Star?

Today's Toronto Star Editorial reads "Tories' tactics insult democracy".

Funny, but when I met with the Toronto Star Editorial Board, they didn't consider Flaherty's 18 pages of blacked out documents to be an insult to democracy?

In fact these hypocrites were arguing that it was a "good" thing? That was April 12, 2007. Maybe the Star has "found religion", since then?

I doubt it, since their commercial agenda still rules their inane view on income trusts.


EDITORIAL
Tories' tactics insult democracy
Toronto Star
Aug 15, 2008 04:30 AM


If history is any guide, the hardball tactics being deployed against a parliamentary committee this month are being carefully choreographed by Conservative party strategists. Doubtless they believe the best defence is a strong offence – no matter how offensive to the precepts of a parliamentary democracy.

By denigrating the parliamentary process, they may hope to distract voters from the substance of Elections Canada's allegations of co-ordinated spending abuses in the last campaign, in which Conservative headquarters – then as now – was seen to be calling the shots.

But even by the low standards of this dysfunctional minority Parliament, the latest standoff is unprecedented. Not content to hurl insults across the table about allegations of under-the-table dealings, some Conservatives have opted to duck the table entirely.

One after another, Conservative party officials, former candidates and their representatives who were served with notices to testify have snubbed Parliament and left the witness chairs empty. Some say they were told by headquarters to stay away.

Campaign director Doug Finley added his own unique twist by refusing to appear on his scheduled day and demanding to kick off the hearings so he could no doubt deliver a coup de grâce. In a performance that would have embarrassed previous Tory leaders who had an underlying respect for the institution, Finley behaved like a juvenile squatter who had to be evicted by the Sargent-at-arms.

This disrespect fits the pattern behind the Conservatives' so-called "in-and-out" scheme, which pooled untapped advertising spending limits from local ridings so that the national campaign could exceed permissible ceilings by more than $1 million. Elections Canada says $1.3 million was transferred into the local bank accounts of 67 candidates, then sent back to the national campaign.

It was a dubious moral calculation back then. And the party's latest theatrics may be another miscalculation. By thumbing their noses at Parliament, and aggressively casting aspersions against Elections Canada, the Conservatives are giving voters fresh insights into their modus operandi in the last campaign – and the next one.

Opposition MPs have accused the Conservatives of contempt of Parliament. By turning the committee hearings into a three-ring circus, on a fundamental question of election fairness, the Conservatives are showing their disdain for democracy itself.

Jack Mintz: "I don't have an agenda"

Meanwhile, Flaherty “has no proof”.

Sounds like the perfect “set up”.

Just add equal parts of Eric Reguly.......and spin until the truth is completely discarded.


"I don't have an agenda" to stifle income trusts, Jack Mintz says. "I like tax neutrality."
Mintz slammed over trust stance: Group questions 'tax leakage' of $1-billion a year

National Post
Tuesday, October 24, 2006
Byline: Carrie Tait
Source: Financial Post

Income trust proponents lashed out at Jack Mintz yesterday, arguing he is picking on income trusts and pushing inflated tax leakage figures to promote his larger agenda of overhauling Canada's corporate tax structure.

Mr. Mintz, professor of business economics at the Joseph L. Rotman School of Management at the University of Toronto, estimates the government will lose about $1-billion a year in tax revenue because of income trusts, a figure the Canadian Association of Income Funds, along with other income trust fans, hotly disputes.

CAIF argues the corporate tax revenue lost by a company converting into an income trust is offset by increased personal income tax, and points to research by HLB Decision Economics Inc., a company CAIF hired to crunch the numbers.

With this data in hand, CAIF is questioning the motives behind Mr. Mintz's $1.1-billion number.

Mr. Mintz spent seven years at C.D. Howe Institute, an economic think-tank, where he lobbied for sweeping changes to Canada's corporate tax structure. Critics say he is flogging tax leakage statistics as part of an ongoing campaign to prove his suggestions should have been adopted.

"Mr. Mintz seems to be using income funds as the thin edge of the wedge in his pursuit of a larger agenda of tax reform he has been chasing for years," said Jeffrey Singer, a senior partner at Stikeman Elliott LLP.

"Income funds are essentially his convenient lever."

George Kesteven, CAIF's president and the manager of investor relations at PrimeWest Energy Trust, agrees.

"That's a lot of what's behind Mintz's approach to this whole issue. It's a little bit of: 'See, I told you. You didn't amend the corporate tax system and this is one of the outcomes.' "

Mr. Mintz dismissed these charges: "I don't have an agenda," he said. "I like tax neutrality."

The debate over income trusts and their impact on the Canadian economy has gained momentum since Telus Corp. and BCE Inc. declared their intentions to convert into income trusts early next year. With a combined market capitalization of $45-billion, these two will be mammoth additions to the trust sector, which currently has about 265 members with a total market cap of $220-billion.

The same income trust discussion raged this time last year when the Liberals suggested changes needed to be made to the way income trusts are taxed. In the end, the Liberals decided to "level the playing field" between trusts and corporations by increasing the dividend tax credit.

With a minority government, observers say it is unlikely the Conservatives will want to tinker with such a politically charged topic.

"No one wants to star in the remake of a movie that was a disaster the first time it ran," Mr. Singer said.

Bravo Lawrence Martin !

It is comforting to know there's still someone at the Globe who can put 2 and 2 together, and get something that approximates 4 :

Cry us a river, Tories, but who wrote the book on chaos?
If it were elementary school, the teacher would tell the Conservatives to go stand in the corner

LAWRENCE MARTIN
Globe and Mail Update
August 15, 2008 at 8:02 PM EDT

Oops. Maybe they forgot.

Last year, the governing Conservatives prepared a secret handbook on how to disrupt parliamentary committees and create chaos. No mere pamphlet, the book ran to 200 pages.

It instructed committee chairmen to select blatantly biased witnesses and tutor them in advance. It gave the chairmen pointers on how to obstruct parliamentary business, to storm out of meetings if necessary.

Team Harper never expected its opus to be made public. But the media got hold and the headlines poured forth – “Tories blasted for handbook on paralyzing Parliament” and the like.

Liberal Ralph Goodale noted how it was rather peculiar to see the government getting its knickers in a knot over a dysfunctional, chaotic Parliament when, in fact, “the government's deliberate plan is to cause a dysfunctional, chaotic Parliament.”

We thought the Grits were bad, chimed in the New Democrat, Libby Davies. But these guys, she said, were taking the gutter stuff to a new level. “They've codified it.”

The Prime Minister's Office had all the committee chairmen return their dirty-tricks texts. Given the Conservatives' red-handed embarrassment, it was expected that they might show a touch more temerity in the future.

Not these honchos. As was clear at the House of Commons ethics committee hearings this week on the so-called in-and-out scheme, their parliamentary chaos manual is alive and thriving. It's had yet another printing.

In committee, Conservative campaign director Doug Finley showed his version of contempt for the process, demanding that he, and only he, would dictate when he would testify. He finally had to be forcibly removed from the hearing room. For their part, Conservative MPs ignored summonses to testify.

Then the Prime Minister came forward in Newfoundland to say he might have to force an election because opposition-induced obstructionism was plaguing his governance. The Commons, the aggrieved PM declined to mention, was so full of barricades throughout the spring and early summer that it passed almost every piece of legislation that the Conservatives proffered.

Hypocrisy, of course, abounds in the nation's capital, all parties being guilty. But this week's hypocrisy moment may rank as one for the ages. The Conservatives wrote the handbook on obstructionism, they've followed it to the letter on many occasions, and they now come forward to proclaim that they are somehow the victims and that they may have no recourse but to go the polls.

They probably plotted the committee wrangle the week before. Team Harper wanted to set the timing of an election at its own choosing. A provocation was in order. It's summer. They likely figured that few were paying close attention, that their ploy would be taken seriously.

The opposition parties warrant their share of condemnation for their ethics committee comportment this week. The Liberals have their own history of bullying committees. Check out the Chrétien government's record. This week, however, they weren't quite down to the standards of the governing side.

All along, Team Harper has been quite faithful to its manipulation manual. We recall, among the many examples, the tricks they pulled to avoid being called to account on the censorship of documents regarding the Afghan detainees file. We recall Auditor-General Sheila Fraser saying they were out to gag officers of Parliament.

The in-and-out affair is not a heavyweight matter, but it is not one that looks good on the governing party. The Conservatives may be correct in saying the Liberals have also shifted campaign moneys around to their advantage. But, as Tories have admitted, they did more of it. And their deeds were being done in the middle of the 2006 campaign – a campaign in which they were repeatedly promising to clean up on the Liberal act.

Facing a slumping economy that is threatening to worsen, Stephen Harper appears to want an election badly – so badly that he'll dip into the hypocrisy pool on another count. The government has made a commitment – a good one – to having fixed election dates. It has repeatedly denounced a system under which a prime minister can set the date willy-nilly, at his own choosing. But now Mr. Harper seems set on doing that very thing.

There are good reasons for an election this fall. Everybody's patience has been tried long enough. But this week's show of flim-flam should not be allowed to be the trigger. It was crybaby stuff. If the Harper boys don't get their own way, they stamp their feet and start bawling at bad treatment from others and make big-time threats – forgetting all the while what they had put down in their own playbook.

If it were elementary school, the teacher would tell them to go stand in the corner.

Flaherty's calming advice: It's only a loss if you sell?

House values sinking into red
Average national prices decline 3.6 per cent in July sparking fears U.S. housing woes are moving north

August 15, 2008
Tony Wong
BUSINESS REPORTER
Toronto Star

Canadian average home prices have fallen for the second month in a row, raising concern by economists that the housing market may have been caught in the undertow of a U.S.-based slowdown.

Average home prices nationally fell by a significant 3.6 per cent to $327,020, from year ago levels in July, according to figures released by the Canadian Real Estate Association yesterday. In June, prices fell by 0.4 per cent, the first time the market recorded a decrease in nearly a decade.

"We had a small drop the month before, but this looks like the real thing. We hope it's not the beginning of an accelerating trend," said TD Securities economics strategist Millan Mulraine in an interview.

The bulk of the declines were in the western provinces, with cities such as Calgary down by 7.8 per cent and Edmonton by 5.3 per cent. The previously unassailable Vancouver market saw a 1 per cent drop, all helping to bring the national average down.

"Canada's housing market is running into some seriously foul weather amid the weakest affordability in nearly two decades," said BMO Capital Markets senior deputy economist Doug Porter in an economic note. "The steady drum beat of double-digit sales declines this year is beginning to weigh more heavily on prices."

A drop in prices is typically preceded by a fall in sales. In this case, sales volume in cities such as Vancouver were down by a mammoth 44 per cent, and Calgary by 13 per cent.

Sales are also down in the Toronto market, by 12 per cent, for the seventh month in a row. But prices are narrowly hanging on in positive territory, up by 1.5 per cent in July, over the same time last year.

But there's no guarantee that will last.

"The provincial economy isn't exactly holding up too well, so we certainly can't rule out a future price decrease in the Toronto market," said Mulraine. "It's not improbable since the trajectory is downward and the market is definitely past its prime."

One thing Toronto has going is the strength of its financial services sector, which is still doing well, and should help to buffer job losses from manufacturing and other industries, said Mulraine.

Closer to home, the Oakville, Milton and District Real Estate Board reported yesterday that prices in Milton declined by 1 per cent in July to $332,827. This was "most likely due to the moderate economic growth and the increased choice in the resale market," the board said.

Nationally, a combination of mounting new listings and fading sales has pushed the market into buyer's territory in many cities, with "pricing power in full-scale retreat across many major markets," said Porter.

So far, no one is saying the Canadian market is going the way of the U.S. market, where a credit crunch has seen median home prices year over year fall by 14 per cent, and where some hard-hit areas have seen values drop by 50 per cent.

"While we still doubt that Canada will stage an instant replay of the trauma in the U.S. markets, even a mild version would be bad news," Porter said.

Four more years!

From the CBC net news site:

Shifty Calhoun wrote:

They bribe an independent MP.
They fire a nuclear watchdog for doing her job.
They break Elections Canada laws.
They try to sue the Liberals for doing their job.
They embarrass Canada when an MP leaves classified documents at a girlfriend’s house.
On the day of apologizing to Aboriginal people of Canada, an MP calls in to CFRA and trashes Natives.
They cancel the access to information database (not very transparent).
They allow American lobbyists to influence Canadian law (new copyright laws).
They have done nothing for the environment.
They are the most secretive government we’ve ever had.
The Fortier and Emerson appointments.
Selling out our economic sovereignty to the USA via the softwood lumber deal.
Harper’s $35B tax grab on Income Trusts which decimated seniors’ savings.
Firing the National Science Advisor.
Not showing up to honour Canadian scientists that have won the Nobel Prize.
Trying to impose censorship in the Canadian Film Industry.
Allowing Flaherty to present the biggest spending budgets in Canadian history (spending more than a drunken Liberal).
Cancelling of the Court Challenges Program.
Pandering to Quebec by:
a) Renewing the program but ONLY for official language minorities
b) Playing footsie with Dumont, then Charest, then Dumont again, then Charest, then Dumont.

Yup, a list of accomplishments to be proud of.

Ex-con becomes born-again Con

Do you think there's any chance that Harper would have falsified his tax leakage analysis?


Liberals slam Harper aide's plum appointment


OTTAWA - The Liberals say a plum appointment for a controversial adviser to Prime Minister Stephen Harper is another example of Conservative hypocrisy when it comes to accountability.

Bruce Carson was named this week as the first executive director of the new Alberta-based Canada School of Energy and the Environment.

The institute recently got $15 million from the Tory government.

Carson, who was disbarred and jailed in the early 1980s for defrauding law clients, will split his time between the Prime Minister's office and his new post until after the next federal election.

Liberal MP Brian Murphy called the appointment "a clear conflict of interest of the worst sort."

"How can the prime minister's senior adviser possibly accept a position that's dependent on funding from the federal government, while continuing to work part time in the Prime Minister's office?

"Once again, this is a government that is willing to bend, break and ignore the rules when it's most convenient. We've seen it with the in-and-out scandal, we've seen it with Stephen Harper ignoring his own fixed election dates legislation, and now we see it with them violating the spirit of the Accountability Act".

The Canada School of Energy and Environment is a collaboration involving the University of Alberta, the University of Calgary and the University of Lethbridge.

Single purpose agent for Mark Carney seeks his elimination from Wikipedia

On 8/15/08 1:03 PM, "Darren> wrote:

Brent

I haven't signed into Wikipedia for a while so I wasn't aware of this until a few days ago. Apparently somebody nominated the 'Mark Carney' article for deletion from Wikipedia.

The wiki user which nominated the article for deletion was deemed to have a single purpose account, the purpose of which was to delete the Carney article. Wonder who? Is somebody uncomfortable with their role in a previous DoF position. Who knows.

Anyway, a couple wiki editors defended so it looks like the article stays. Poor Mark. :-(

Attempted deletion here

Darren:

Too late...he’s now the freakin’ governor of the Bank of Canada. Or does he want to black that out as well?

So much for transparency, disclosure and accountability at the Bank of Canada? Words without meaning. Concepts without implementation.

Brent

Mail and Globe loses its credibility with professionals on Bay Street .

From: John Priestman, Michelle Robitaille, Kevin Hall –(Guardian Capital)

Comments on Recent Negative Trust Articles – August 14th, 2008

On August 13th there were two articles written on income trusts that carried very negative tones.

Investors do not appear to have reacted to the articles as the trust sector was up on the day they were printed

“Income Trust Balloon Quickly Deflating” – by Angela Barns, [Globe and Mail]

Diane Urqhuart has been negative on trusts for a long time.

The article is very one-sided in that there is no mention of the numerous trusts that have maintained or increased their distributions over time, some very recently like Yellow Pages and Keyera Facilities (60% of trust universe have maintained or increased distributions according to the data used).

We have always maintained that there are good trusts as well as bad trusts, like every asset class.

Of course energy trusts and energy service trusts are cyclical businesses dependant on energy prices with volatile cash flows and distributions. This is not new information.

“Here’s Scary Reading for Energy Trust Investors” – by Andrew Willis, [Globe and Mail]

He quotes data from a recent CIBC research report on the tax pools of the energy trusts and their taxability in the future.

He also quotes data from the previous article on distribution cuts by energy trusts.

The main point of the article is that distribution cuts are on the way starting in 2011. Again this has been known for a year and a half.

Part of the distribution cuts are due to CIBC’s assumption that the energy trusts will make a decision to re-invest more of their cash flow for tax reasons. He does not mention that this may actually be good for the trusts if they can re-invest it and make good economic returns.

What Andrew Willis fails to mention is that in the same research report, CIBC includes their price targets and total return estimates that average 50% in the next 12 months.

No mention that some energy trusts have been raising distributions this year.

No mention that while distributions in 2011 will likely be lower, they will be treated as dividend income for taxable Canadian investors, which will receive a much lower tax rate than current tax rates on distributions (unless they are deemed to be a return of capital, which will continue to be non taxable in the year received but will lower the investors cost base).

No mention of the fact that CIBC believes:

There will be continued demand for high-yielding-dividend paying equities or entities that have high quality asset bases and can re-invest at economic rates of return.
On a total return basis, trusts appear to be competitive with the junior E&P stocks on a risk-adjusted basis


We [Guardian] continue to believe that the market is already largely discounting future taxation. Having said that, there may still be volatility surrounding a trusts decision to convert back to a corporation and/or cut distributions.

Prime Minister de gall

Re: Don Martin: Harper's possible forced election, a 'galling move'

Class act these CONs: To wit: “my f---ing head's going to explode!"

Why is it always about them?

I could be wrong about the CON thing, but I don’t think it was the NDP or Liberals who were text messaging Don Martin with their neurological problems.

Speaking of Committee Hearings, when is Don Martin going to release his copy of Harper’s 200 page manual of how to obstruct Parliament? I think it would be an important public service. Might swing a few votes in Harper’s direction? Especially those with a distaste for democracy.


Don Martin: Harper's possible forced election, a 'galling move'

Thursday, August 14, 2008
National Post


Canadians will go to the polls just before the U.S. election this fall. Go ahead, roll your eyes. Election predictions have been kicking around since early 2007, only to be proven premature with yet another whimpering surrender by Liberal MPs in the House of Commons. But there's a hefty difference now. After a year of enduring false starts and bogus threats, the Prime Minister has moved beyond baiting the Liberals, signalling yesterday that he is willing to ignore his own fixed voting date and force an election himself, probably for Oct. 27."I think, quite frankly, I'm going to have to make a judgment in the next little while as to whether or not this Parliament can function productively," Stephen Harper said during a visit to Newfoundland.So much for Liberal leader Stéphane Dion's "I have the power" boast that he alone will decide the timing of the next election. Mr. Harper has claimed the power for himself. It's a galling move in some ways because fixing the election date was the Prime Minister's idea, a token nod to old Reform Party ideology. Mandating a vote for Oct. 19, 2009, was sold as a key part of the Conservative pledge to be transparent and accountable, a pledge that has been tarnished on more than a few occasions since Mr. Harper came to power.Declared government House Leader Rob Nicholson at the time: "Instead of the prime minister and a small group of advisors being the only ones who know when the country will move into the next general election, once this bill is passed, all Canadians will have that knowledge, which makes it fair."But sacrificing fairness and principle to the greater interest of preserving Conservative power may be the only antidote to the toxicity infecting federal politics today.This week's ethics committee probe into Conservative election financing shenanigans has provided a rare mid-summer preview of the upcoming and ongoing dysfunctionality of the House. Witness intimidation, procedural stonewalling, cross-table name-calling and chair challenging have been the orders of every day, with MPs making only the odd stab at soliciting relevant information. While the Conservative MPs are responsible for most of the obstruction, feelings on all sides have hardened to the point where one seething committee member wrote me mid-way through the hearings yesterday to declare, "my f---ing head's going to explode!" Indeed. It's that bad. Many Liberal doves have turned hawkish on a fall vote, in the belief that delaying until spring will give the Conservatives four more months to attack their carbon tax. But influential Conservatives are convinced Mr. Dion will still back away from an election, particularly if he loses one or both of the Liberal seats in next month's by-elections.In that case, the only solution for this election-hungry government is to order committee work obstructed by its own MPs to bolster Mr. Harper's assessment that Parliament is paralyzed beyond repair, which would then justify breaking the government's own fixed election law. There are several reasons why the Conservatives have an early election preference.Mr. Harper is convinced the Green Shift carbon tax will be a seat killer for the Liberals, an impossible sell that would nudge him close to majority rule. Waiting until 2009 comes with the risk that the oncoming economic slowdown will hit hard on his budget books, turning what is now a small fiscal deficit into a red-inked torrent of bad news next spring. And there's always the possibility that Obamamania will seep across the border and instill Canadians with a mood for change - although Mr. Dion would seem a very faint echo of Democrat presidential nominee Barack Obama's oratorical charisma. So put the Conservatives solidly behind the notion of a fall election vote, joining the Bloc Québécois and the New Democrats. Even many Liberals now insist their green plan can be sold as bold, particularly given a wacky summer of weather that has pumped hot, dry air north and kept southern Ontario soaking in cool temperatures. In what could be a final irony come late September, this Parliament appears headed for a rare display of unanimity by declaring itself too divided to function - and voting itself into the history books. National Postdmartin@nationalpost.com

Harper is the expert on “shafts”.

Take the income trust “shaft” for starters in which he "shafted" Canadians for $35 billion.

Doesn’t Stephen have such a way with words?

Liberal Green Shift is 'green shaft,' says Harper
August 14, 2008
THE CANADIAN PRESS

FREDERICTON—Prime Minister Stephen Harper took aim at the Liberal party’s carbon tax policy today, suggesting the so-called Green Shift proposal is really a “green shaft” that will stifle the Canadian economy. Harper, wrapping up a two-day tour of Newfoundland and New Brunswick, described the Liberal policy document as a “hidden agenda” that is finally out in the open. “We have got to fight it with everything we’ve got,” Harper told party faithful in an overtly partisan speech at a hotel in Fredericton. “Put simply, we cannot let the Liberals take this country back to the tax-and-spend policies of the past.” Harper said the Liberal policy was a tax increase masquerading as environmental policy. “It will drive up the price of everything — transportation, groceries, electricity, heating, even propane for our BBQs,” he said. He said the policy would hurt the Canadian middle class while making the cost of living “unbearable” for fixed-income seniors and low-income families. The Liberals say Harper is misrepresenting their key policy, stressing that the carbon tax will be largely offset by income- and business-tax breaks, which the Conservatives fail to mention. The complicated climate-change plan would also offer tax benefits to the poor, elderly and rural dwellers. Harper’s campaign-style speech highlighted Tory accomplishments stretching back to Confederation, and the prime minister boasted that he now presides over the longest-serving minority government in Canadian history. He reminded the crowd that his government is committed to cutting taxes, getting tough on crime, paying down the debt, strengthening the military and reinforcing sovereignty over the Arctic. Meanwhile, he said, the country’s economic fundamentals are strong, with low and stable interest rates and inflation, high employment levels and a balanced budget. Earlier in the day, in a speech to the Conservative Atlantic caucus at a meeting west of Fredericton, Harper claimed the Liberals failed to mention the Green Shift in a statement issued after they concluded their own Atlantic caucus meeting last week in Nova Scotia. “There’s a reason it didn’t mention the carbon tax policy,” he said. “That’s because it’s a bad policy for Atlantic Canada. It would hurt families here, it would hurt industries here and that’s why they’re not talking about it.” Before heading to New Brunswick, Harper fuelled election speculation after a funding announcement in Newfoundland by obliquely musing about the possibility of engineering the defeat of his own government. In Newfoundland and again in New Brunswick, he suggested Liberal Leader Stéphane Dion is responsible for creating chaos in Parliament and he urged his foe to make up his mind about whether the Conservatives should continue governing. “I see Mr. Dion has been threatening to defeat the government again this summer — I am starting to feel like I am starring alongside Bill Murray in the movie Groundhog Day,” he said. “As humorous as Mr. Dion’s behaviour has been, this spectacle of his threatening to defeat the government, then backing down, has to end.”

Harper discloses what he's been up to since Halloween 2006

Hasn’t Harper been doing this ever since Halloween 2006.....engineering his own defeat?

Harper hints he will engineer his government's defeat, trigger fall election
32 minutes ago CUPIDS, N.L.

My investment advice for Roslyn

Subject: Re: Question for Andy Willis: Is Stephen Harper in your Income Trust Hall of Shame?

Aug. 14, 2008:

Brent: Give that idiot, the real zinger.....if you purchased Canadian Oil Sand Income Trust in 1996, 500 units would have cost you $5,400. At this point in time, you have 2.000 units and in the year 2008, the distribution will be $10,000. Over the 12 years, I would say the returns have been in the vicinity off $72,000 (maybe more). My darling husband bought this one and I told him that oil sands were not the thing to buy. I hope he has forgiven me! LOL. I purchased 500 shares of Harvest Energy in 2002 and what a pity (they gave me a bonus of 5 shares) at $12.00....so the $6.000 brought about 10% first two years then it brought 42% for the next two and then boo hoo, it only returned 25% from then on. I am devastated. One of my companies Transforce (a trucking company went the corporate route) and I can't live on dividend of 2% so I sold it and made a profit of some 1300.00. Off he top of your head what can I invest in now! By the way Dion appears to be gaining in popularity in Quebec. The killing of our soldiers and civilians in Afghanistan is not boding well for Harper! Roz.


Roz:

My investment advice is that you should invest in the future. That would mean not voting Conservative, NDP or Bloc in the next election

Brent

Stephen Harper is the CEO of Asleep Country Canada.

Yo Harper: NOT YOUR FAULT???? Puhlease:

Here we have the 45th takeover of a undervalued trust by either foreign private equity, a foreign entity, private equity or a Canadian Pension Fund.

These takeovers by way of leveraged buyouts, together with the LBO of BCE that would not have occurred had BCE been allowed to become a trust, have caused over $2.0 billion A YEAR in tax leakage for a policy whose stated purpose was to stem tax leakage. Tax leakage that was never proven to exist in the first place.

Harper is the CEO of Asleep Country Canada. Alseep at the switch that is:

BIRCH HILL EQUITY PARTNERS MANAGEMENT INC. AND WESTERKIRK CAPITAL INC. ENTER INTO AN AGREEMENT TO ACQUIRE SLEEP COUNTRY CANADA INCOME FUND

2008-08-14 10:22:15.640 GMT



TORONTO, Aug. 14 /CNW/ - Sleep Country Canada Income Fund (the "Fund") (Z.UN - TSX),and US privaet equity forms Birch Hill Equity Partners Management Inc. ("Birch Hill") and Westerkirk Capital Inc. ("Westerkirk") announced today that they have entered into a support agreement under which Birch Hill and Westerkirk have agreed, subject to certain conditions, to offer to acquire all of the outstanding units of the Fund for cash at a price of $22.00 per unit (the "Offer") for a total enterprise value of approximately $356 million. The Offer will be made by 7019416 Canada Inc. (the "Offeror"), a new acquisition company established by Birch Hill and Westerkirk, by way of a take-over bid that will be mailed to unitholders of the Fund on or before August 18, 2008. The transaction is expected to be completed on or about September 23, 2008.


Sleep Country Canada Income Fund is the largest retailer of mattresses in Canada with 133 corporate owned stores under the Sleep Country Canada banner and 27 stores in Quebec under the Dormez-vous Sleep Centres Inc. banner. The Fund also owns Sleep America LLC, the largest mattress retailer in Arizona with

46 stores. The Fund is an open-ended limited purpose trust that owns 100% of the voting securities of Sleep Country Canada Inc. The Fund's units are listed on the Toronto Stock Exchange under the symbol Z.UN.


In accordance with the Offer and the support agreement, the Fund expects to continue to pay regular monthly distributions to unitholders equal to $0.1208 per Unit pending payment for units tendered to the Offer.




The Offeror's financial advisor is TD Securities Inc. and its legal counsel is Stikeman Elliott LLP. The Independent Committee and the Board of Trustees are receiving financial advice from Genuity Capital Markets and their legal counsel is Goodmans LLP. Legal counsel to the Fund is Davies Ward Phillips & Vineberg LLP.

Letter from Rome

To: Brent Fullard
Subject: RE: Keeping score on Andy Willis

Brent, I live in Europe and no longer cover trusts. Please remove me from your email list. Thank you. Eric

Eric Reguly

European Business Correspondent, Rome bureau
The Globe and Mail
Canada's National Newspaper

Mobile: +39 331 649 6202
ereguly@globeandmail.com
BlackBerry: ereguly1@mobileemail.vodafone.it

CTVglobemedia


Eric:

You never did cover trusts........faithfully, at least, or with any degree of insight.

Meanwhile we in Canada are still living with your sad legacy of reckless mis-reportage.

No doubt your creative business (?) writing skills were honed by your university degree in French Literature/

You sure called this one wrong, as you as you admitted before departing Canada for greener pastures.

The Mail and Globe. The gang that can’t shoot straight.

Say Hi to Peter Munk for me, next time you do another installment of “Lifestyles of the fabulously rich and famous” from Europe.

Brent Fullard

Keeping score on Andy Willis

Maybe Andy Willis of the Mail and Globe should remind his readers about how “income trusts were packaged and sold” by the CONs.

Andy is having a very difficult time letting go of all of his support (tacit and otherwise) for Harper’s false premise for the tax.

Andy darling: Where’s the leakage? That’s what the legislation was passed on. The premise of tax leakage. Not the premise of ponzi schemes. Time to listen to someone other than DUI: Diane Urquhart Influence.

Approach the issue scientifically, not dogmatically, for example:

“Prove the case or drop the tax.” Diane Francis


Keeping score on income trusts

Andrew Willis, today at 5:05 PM EDT

For those interested in tracking the ups and downs of income trusts, a web site devoted to the sector posted a scorecard this week on distribution hikes and cuts over the first half of the year.

A total of 38 trusts bumped up the cash they hand out to owners in the first six months of the year, according to data assembled by IncomeTrustResearch.com and published on Tuesday. The average distribution increase was 16.4 per cent, with the energy trusts supplying much of that joy on the back of record oil prices.

Seven energy trusts hiked distributions by an average of 33.9 per cent. Meanwhile, the business trusts raised payouts by an average of 12.5 per cent.

The study by IncomeTrustResearch showed that the trust hall of shame picked up 16 members through the first half of 2008. That's how many funds cut or halted distributions. Including the five trusts that resorted to complete suspensions, these trusts averaged 61-per-cent reductions in their distributions.

Those wondering why there's so much focus on trusts that cut distributions should recall how most of these companies were packaged and sold.

With a few exceptions, such as commodity play SKF Pulp Fund, trusts were marketed by the Street as income-generating investments. Many investors were sold on trusts as replacements for bonds in their portfolios at a time when interest rates were at historic lows. When these trusts fail to deliver on what was promised, that's going to attract attention.

Mark Carney implicated in "in and out" scandal

Too bad Mark Carney didn’t have the same ethical concerns as these ad execs who appeared before the Ethics Committee today, when Mark falsified his tax leakage analysis.

That was a case of in and out as well.

Mark put “in” a really big number for the percent of trusts held in RRSPs......38% instead of 31%.....and then he took “out” all the taxes that these inflated number of trusts held in RRSPs pay. A classic case of cooking the books. And to think, he’s now the Governor of the Bank of Canada. Maybe its time for an early withdrawal


Ad execs say they worried about the legality of Tory campaign ad system
Canadian Press
August 13, 2008

Canadian journalism's shallow gene pool

Yesterday we had Margaret Wente of the Mail and Globe (hey, I can get things totally backwards too), writing about the John Edwards matter in an article entitled “Sex Lies and the National Enquirer”. That title scored about a 6 on the creative writing scale.

I can’t comment on the article itself as I never read it. I haven’t read a Margaret Wente article since she weighed in on the income trust matter in an article dated November 9, 2006. Just think. Margaret Wente with no business background whatsoever thought she had the whole income trust matter figured out in nine short days. I guess that’s what makes her a complete short as a writer. Ignorance trumps facts.

Today we have none other than L. Ian MacDonald sharing his peculiar brand of thoughts on the John Edwards matter, in an article entitled.....guess what.....Sex Lies Videotape! In the normal course that title would rank a score of 2 on the creative scale. However coming as it does the day after Margaret’s thingy, it ranks a complete zero.

Here’s a novel thought to consider. Rather than falling all over each other in an attempt to cover the John Edwards scandal, which is more a scandal about the media than it is about John Edwards, perhaps these sharp minds should turn their more productive selves to uncovering the scandal called manufactured tax leakage numbers. Perhaps they can find out why Flaherty demanded that the 18 pages of blacked out documents released under the Access to Information Act were demanded to be returned. I sent mine back by fax. I hope I haven’t confused any journalists yet?

There’s a $35 billion prize for the journalist who comes up with the correct answer first. Canadians would be most grateful. As it stands, they are anything but.

Now the Propaganda Ministry wants to know if "I work?"

From: Dan.Miles@fin.gc.ca
Date: Tue, 12 Aug 2008 14:19:41
To: brent.fullard@rogers.com
Subject: Re: Children with scissors/ Tories with axes


Do you work Brent? Or is railing against everyone and everybody your full time occupation?



From: brent.fullard@rogers.com
Date: Tue, 12 Aug 2008 18:37:41
To: Dan.Miles@fin.gc.ca
Subject: Re: Children with scissors / Tories with axes


Do I work? No I am a coupon clipping laz-about who in the past year appeared before the Supreme Court of Canada, the CRTC, and the FSCO, to the extent that's its any of your business or that your view counts for anything with me.

You see, . I was simply trying to rectify the damage caused by your mindless boss, resulting, to date in the loss of $800 million a year in tax revenue, 2500 jobs and the increase in service costs for Canada's new junk bond telco......BCE.

PS: I also did a couple loads of laundry.

PPS: Glad to see you took your own advice and "moved on".

PPPS: The letter in today's Globe entitled: ”Tories with axes”was written by Gwynne Dyer and not me. Please accuse him of railing against the Harper government's incompetence and not me, in these circumstances. I know the truth hurts.

Maybe a picture would help the financially illiterate Jim Flaherty

Why Canadians need income trusts: The yield on 10 year Canada’s over the past 20 years (above).

Jim Flaherty thinks its all about the pension funds and not the 75% of Canadians who don't belong to an employer pension plan.

Jim Flaherty thinks its all abuyt the Tecahers' of this country and their cries of:

"We must find long-term investments [like BCE] that provide good cash flow into the future," Jim Leech, senior vice-president of Teachers'.

Guess what Jim, we all need "investments that provide good cash flow into the future".

So why did you steal ours out from under us when you said you wouldn't? So why did you give the pension plans a holiday from the 31.5% trust tax?

Are the pension funds more important than us? How can that constitute a "tax fairness plan" or a "leveling of the playing field'?

What is your answer? We are dying to know.

Flaherty calls for greater financial literacy.

In that case, he badly needs a lesson in the ABCs of BCE

Talk about the pot calling the kettle black. Today we learn from the article entitled ”Financial literacy needed in complicated economic climate” that "Canada's minister of finance told a meeting of financial managers recently that whether it's a sophisticated investment or a simple savings account, today's financial world cries out for improved financial literacy."

In that case Jim Flaherty needs a remedial lesson in the ABC’s of BCE.

In his reckless attempt to stem phantom tax leakage, he CAUSED tax leakage. $800 million a year in the case of BCE alone. Another $1.2 billion from the other 44 trust tax related takeovers.

Can we really afford to have a sub-prime Finance Minister who CAUSE what he sets out to SOLVE? That is the definition of negligence and incompetence.

We share in that outcome if we don't speak out against it. No more so than in the case of the media whose job it is to ferret out incompetence and waste. Not much ferreting required here, as the under reported story has pretty much written itself. Just looking for a paper with the public’s interests at heart to print it.

The new Déjà vu BCE

Two years in the works and Bell’s new branding gets mixed reviews?

Maybe they should spin out Bell Canada?


Bell's new logo goes back to simplicity

David George-Cosh, Financial Post Published: Friday, August 08, 2008

TORONTO -- It took BCE Inc. four marketing agencies and two years of planning to come up with a new logo that may be the simplest among major North American businesses.

Gone are the widely polarizing beavers Frank and Gordon. In their place is the single word "Bell," clad in a plain blue font and a new slogan company executives hope to underscore the changing dynamic within Canada's soon-to-be-privatized largest telecommunication company: "Today just got better."

Wade Oosterman, Bell's chief brand officer and president of Bell Mobility, felt the move to a simpler brand strategy was necessary to pursue after relying on its folksy beavers for far too long.

"[Bell] is an incredible organization with an asset richness that is beyond belief," Mr. Oosterman said. "But I think we've constructed a very powerful language with which to work and is uniquely tailored to the demographic segments that we might want to pursue in any one initiative."

The campaign marks the symbolic shift of Bell following the appointment of George Cope as the company's new chief executive as the completion of its private-equity takeover looms.

Rick Seifeddine, Bell's brand senior vice-president, says the new visual representation of the brand was an attempt to "really clean things up."

Bell is using the opening ceremonies of the Beijing Olympics as a launching pad for the campaign and will be releasing advertising on a variety of multimedia platforms across Canada.

Mr. Oosterman declined to comment on how much the advertising campaign will cost but experts estimate it will be in the tens of millions of dollars.

The campaign was developed by four ad agencies, a large collaboration for the marketing world. Zulu Alpha Kilo, Leo Burnett, Ig2 and Bell's old marketing partner, Cossette Communication Group, teamed up to design the new logo and marketing look for the telecom company.

Marketing experts have already given the new campaign mixed reviews.

"The question is whether this campaign is playing to the strengths of their brand," said Robert Levy, president of Brandspark International, a Toronto-based brand strategy and market research firm. "It will certainly get people talking and it 's a very dramatic change from the folksy beavers."

Another question is whether Bell's new brand can live past its initial launch, said Peter Scott, a branding expert with Toronto-based q30 design inc.

"To some degree, it reflects back to the 1975 brand that was designed by Jean Morin in Quebec with a very simple logo, but unfortunately, it's not a particularly well-rendered version of that," Mr. Scott said.

dgeorgecosh@nationalpost.com

Financial Post

Tax, lies and the Globe and Mail

Today Margaret Wente has a piece about the John Edwards matter in the Globe entitled: “Sex, lies and the National Enquirer”

For the better part of 20 years, I have accused the Globe’s Report on Business as being the journalistic equivalent of the National Enquirer, except the National Enquirer were the ones to break the Edwards story. that everyone else is in the Main Stream Media are now playing catch up on.

Perhaps the better comparison now for the ROB would be to the Watchtower, put out by the Jehovah’s Witnesses, as both publications are all about proselytizing.

I think the Globe and Mail needs to look in the mirror. It’s blind allegiance to the Tax Fairness Plan has a wrought vastly greater damage than the titillating story of John Edwards can ever hope to.

There is however the important lesson in the Edwards matter about just how easily misled the main stream media can be, as evidenced by Margaret Wente herself who, of all people, even weighed in with her own ridiculous and grossly misinformed views in support of the double taxation of income trusts. She must have bumped into Eric Reguly in the hall before firing off with her views on that enormously complex issue that Eric Reguly had to eventually recant on.

Strangely, Reguly’s recant of “Flaherty, the Finance Minister has made a huge mistake” never found its way into print????

I guess the Globe doesn’t do mea culpae. They’re too busy misreporting today’s story to have time to correct yesterday’s story, not realizing that Canadian taxpayers are still living with yesterday’s story.

The Globe and Mail is the problem. How much of what Margaret Wente wrote about on November 9, 2006 hasn’t been totally debunked? So why would anyone listen to her today? I know I don’t. Ditto the entire paper. Consider that my moral of the trust fiasco. Here’s Margaret’s:


The moral of the trusts fiasco
MARGARET WENTE

Globe and Mail Update
November 9, 2006

My husband and I don't own income trusts. Our investment manager wouldn't let us. "Too risky," she would say. We used to be unhappy about this because it seemed like everyone but us was getting rich. Now we're happy, because it turns out she was right.

The chickens have come home to roost for a lot of dumb clucks (a.k.a. retail investors). They've been thoroughly plucked, and are they ever mad. But who should they be mad at? Not the Harper government, which did what any government would do. Instead, they should be mad at the investment industry, for selling them a bill of goods. They should be mad at the securities commissions for turning a blind eye. And they should be mad at themselves, for forgetting the basic rule of Investing 101: Caveat emptor. If something looks too good to be true, then it probably is.

Every few years, some new financial craze takes small investors for a ride. Last time, it was tech stocks. They were wildly speculative, and everybody knew it. But income trusts were different. They were marketed as safe, conservative products, something akin to a GIC. And the biggest target market was seniors -- a group with little financial sophistication and a very low capacity for risk. The pitch was that income trusts paid out nearly twice as much as bonds, but were almost as safe. For many seniors whose fixed incomes have been depressed by low interest rates, the pitch was irresistible.

In fact, many income trusts are highly risky, which makes them totally unsuitable for seniors. "Where was the investor protection?" demands Diane Urquhart, a top financial analyst. She's been warning of the perils of income trusts for quite some time. But nobody listened. There was too much money to be made. As the income-trust craze snowballed, investment bankers, financial advisers, and other middlemen raked in hundreds of millions. Billions more flowed into the pockets of company executives, who gorged on bonuses and stock options and windfall profits as their companies miraculously soared in value after being converted to income trusts.

Meantime, small investors got greedy. They figured that if a little bit of income trusts was good, a lot was even better. They forgot the other rule of Investing 101: Diversify. It's these people who are the maddest, because they lost, proportionately, the most. But the parties they should be maddest at are themselves.

The dirty secret of income trusts was that a lot of them paid out more than they were earning. A common practice was to jack up the initial distributions in order to entice investors. That, in turn, would goose the value of the company far beyond its underlying worth. They were houses built on sand. Last year, the Canadian Accounting Standards Board reported that income trusts were overvalued by between 39 per cent and 50 per cent, and that distributions averaged 60 per cent more than earnings. In other words, investors were encouraged to buy ridiculously overvalued companies -- and pay steep commissions for the privilege.

"I don't expect seniors to do their own homework," says Ms. Urquhart. "The financial industry has the duty of care to provide products that are appropriately designed." And where were the securities commissions? Good question. "All those authorities who should have ensured proper specification of the yield turned a blind eye."

But oh! It was great while it lasted! The management of a company called Teranet raked in $167-million when it went public as an income trust. In another deal, a New York private equity firm bought a humble yarn manufacturer called Spinrite for $81-million. For converting it to an income trust, the equity firm made a quick profit of $87-million. Shortly afterward, the amateur knitting craze abruptly ended. Spinrite's value fell by half, and it cancelled all its juicy distributions.

The pain hasn't ended yet. Ms. Urquart says that income trusts (which remain sheltered from tax for four more years) have farther to fall before they reach reasonable valuations. If you can't afford to lose any more of your capital, sell now. And start asking your financial adviser some tough questions.

mwente@globeandmail.com

Interest deductibility rears its ugly head once again

Once you've cut through all the terminology, preserving interest deductibility simply means preserving the ability for corporations to service foreign acquisition debt from their pre-tax cash flows. Something which is taxed at the rate of 31.5%, if it were a publicly traded income trust using its pre-tax cash flow to service its distributions.

That hardly sound like "tax fairness"? Unless you're a clown.

To make things even more egregious, foreign acquisition debt is most likely foreign held, whereas income trusts are predominantly held by taxable Canadian investors. This results in no tax for Canada under the corporate model, and real tax leakage to the extent anyone cares or understands. I know Jack Layton and the NDP certainly don't.

That hardly sounds like "leveling the playing field"? Unless you're a clown.

Not satisfied with this level of flagrant tax inequity, the corporations also want "double dipping" to be preserved. Today’s report (below) recommends they be pacified with such a level of ongoing tax abuse and accounting alchemy. Deducting twice for the same expense. Meanwhile income trusts are tax twice just for the heck of it.

Not satisfied with this level of multiplicative tax inequity, interest on corporate debt paid to foreigners attracts a ZERO withholding tax under the corporate model, whereas income trust distributions attract a 15% withholding tax.

That hardly seems like "Standing Up for Canada'? Unless you're a clown.

The same clown who said a 15% withholding on income trusts was not enough was the same clown who was responsible for reducing it to ZERO on corporate interest payments.

Who might that hypocritical clown be? Hint: He works for Harper and the CCCE, and against the interests of tax paying Canadians. He bears no physical resemblance to the guy pictured above. Just mental.


August 11. 2008

Ottawa under fire to keep interest credit

Eric Beauchesne
Canwest News Service

Monday, August 11, 2008

OTTAWA - Canadian firms trying to grow their businesses internationally would be disadvantaged by the federal government's elimination of interest deductibility on offshore investments, an economic think-tank argues.

Finance Minister Jim Flaherty, under pressure from business groups, has already watered down his 2007 budget measure that would prevent Canadian companies from deducting the interest costs of making foreign investments so that it only applies to investments in which a firm would also be eligible to deduct the interest costs in the host foreign country.

"This is not the time to remove interest deductibility on foreign investments, even if it only applies to 'double-dips,' " the Conference Board of Canada argues in its report, titled Provide Fair Tax Treatment for Canadian International Business.

The report supports the argument of critics of the revised proposal that there is no reason why a deduction should be denied because a deduction is allowed in a foreign country.

"The foreign country deduction has no impact on Canadian tax revenues, and is arguably of benefit . . . since it increases the amount of after-tax income available to be returned to Canada," it said.

Further, the report says that Canada's share of the global foreign-direct investment market is already slipping, adding that the elimination of interest deductibility on such investment would add a new barrier to international business growth and risk placing some Canadian firms at a competitive disadvantage.

"Canadian firms need - at the very least - a level playing field for investment abroad if they are to take full advantage of global value chains and foreign affiliates," said the think-tank's chief economist, Glen Hodgson. "This should be the key guiding principle for all reform of international business taxation."

The report has been submitted to the federal government's Advisory Panel on Canada's System of International Taxation, established last year to review and make recommendations on Canada's system of international business taxation. The panel is expected to issue its report by Dec. 1, 2008.

That Flaherty established the panel and that his department has since also issued a discussion paper on international business taxation are reasons to be "hopeful" that the government will reverse the controversial measure and reintroduce full interest-rate deductibility, Hodgson said in an interview.

While the legislation implementing the revised proposal has been passed, the measure doesn't come into effect until 2012.

"I'm ever hopeful that governments can be convinced to do the right thing by good analysis," said Hodgson, who has worked at both the Finance Department and at Export Development Canada.

In order to compete globally, companies are increasingly looking for the best place to locate specific activities and are also establishing foreign affiliates to sell into global markets, the conference board report said, citing an estimate by the Organization for Economic Co-operation and Development that each dollar of such outward direct investment generates two dollars of additional exports for the originating country.

© Vancouver Sun 2008

It's time for Ralph Goodale to name names

Canadians need to hear from Ralph Goodale is less oblique terms, when Ralph writes:

“[Harper] has also eroded the tax-base”

So name names Ralph....don’t be shy....BCE, Prime West Energy, Union Waterheaters, TransAlta Power, Lakeport Brewing, Great Lakes Carbon and the 39 other income trust takeovers in the attached table (available on request at contact@caiti.info)

These takeovers have eroded Canada’s tax base to the tune of $2 billion in lost tax revenue PER YEAR!

It’s time to name names and tie Harper's policies to their obvious outcomes. Taxing income trusts has benefited Manulife, Power Financial and foreign private equity, to the detriment of every tax paying Canadian and the integrity of our capital markets.

So please say it Ralph. LOUD and PROUD.

Lest people vote for these Harper CONs again.


August 11th, 2008

For Immediate Release

WEEKLY COMMENTARY

By Ralph Goodale, M.P.


CANADA’S ECONOMIC TROUBLE DEEPENING

The western Canadian economy is booming right now, thanks to world-wide inflation in prices for basic commodities like oil.

That good fortune is not the result of any government policy. It’s simply our long-awaited turn to cash-in on rising global markets.

But be cautious. The commodities boom – as enjoyable as it is, while it lasts – is masking fundamental weaknesses that Stephen Harper’s Conservatives continue to ignore, or even make worse.

Mr. Harper has recklessly increased federal spending by more than $40 billion, to try to buy voters with their own money. Prudence has been thrown to the wind.

He has also eroded the tax-base – pushing Canada to the brink of a deficit once again, while failing to provide meaningful reductions in personal income taxes.

Independent monitoring agencies, like the Conference Board of Canada, are reporting a sub-standard performance by this country in such fields as productivity growth, innovation, literacy skills and environmental integrity.

In four of the last six months, despite western resource wealth, the economy not only stalled overall, it actually shrank. Sectors like manufacturing, forestry and tourism are in particular trouble.

The Bank of Canada and all major private sector forecasters are now predicting a pathetic annual growth rate of barely one percent.

In July, 55,000 Canadian jobs were lost. The last time we saw that sort of setback was in the early 1990’s under Brian Mulroney.

Remember, the Harper Conservatives are the people who failed to tell the truth about Income Trusts or Equalization.

They are the ones who raised Personal Income Tax Rates, while claiming to cut them. They are the ones who proposed investment policies that encouraged foreign takeovers of Canadian enterprises.

Incompetence and dishonesty are their hallmarks.

That’s why Tory times are always, ultimately, tough times. And it’s happening again!

THE HONOURABLE RALPH GOODALE, M.P. (WASCANA)
310 University Park Drive, Regina, Sk., S4V 0Y8
Telephone: (306) 585-2202
Facsimile: (306) 585-2280
E-mail: Goodale@sasktel.net

The out and out taxpayer fraud known as in and out

Party sent $37,000 to his campaign, then took it back: ex-Tory

Parliamentary panel looks into alleged Conservative scheme to evade ad spending limits Monday, August 11, 2008
CBC News

In a hearing about Conservative election spending, an unsuccessful candidate testified Monday that he agreed in advance not to spend $37,000 the party sent to his campaign in 2006 and quickly took back.

Gary Caldwell, who ran for the Tories in the Quebec riding of Compton-Stanstead, said he later redrafted his election spending report to withdraw a claim for a 60 per cent federal rebate on that amount.

"I realize that the central party, any party, can give money to the local riding association, but when we examined this further I became convinced that it was only a legitimate local expense if we in fact spent it," he told the Commons ethics committee. " In fact, that was not the case."

Caldwell said he left the Tories "after what happened and my concern that the Conservative Party was no longer interested in rehabilitating parliamentary institutions." He plans to run next as a Green Party candidate.

The former Conservative, who said he spent about $9,000 on his 2006 campaign, was the day's first witness before a quarrelsome panel of MPs.

The committee is examining alleged Tory "in-and-out" arrangements to take advantage of unused spending room in local campaigns. The controversy has raged since the RCMP searched the party's Ottawa headquarters in April at the request of Elections Canada.

The elections agency alleges that the Conservatives exceeded their $18.3 million spending limit on campaign advertising by more than $1 million in 2006 by disguising national ads as local expenses.

Such a scheme would give the party a spending edge and set candidates up to claim undeserved federal campaign subsidies. Elections Canada has refused to approve hundreds of thousands of dollars in rebates claimed by Tory candidates.

That refusal is the subject of a lawsuit being pursued by the party against chief electoral officer Marc Mayrand, the head of the agency.

Doug Finley, who directed the party's winning national 2006 campaign, tried to be the first witness of the day, sitting down at a witness table and insisting on his right to speak. He was escorted from the room by security guards.

Outside the hearing, Finley said he had told the committee it was the only day and time he could appear.

Dutiful Dan Miles can't handle the mileage

Flaherty’s Chief Spin Meister and Mouthpiece, Dan Miles has called it quits, citing as his reason the “ travelling [time] between his principal residence in Port Perry, Ont., and Ottawa” (see article below). Meanwhile we have Canadians fighting in Afghanistan, representing the other end of the spectrum of public service.
Dan Miles represents the self-serving end of the public sector, as he’s now going to the private sector to cash in his chips. It will be interesting to see with whom.

I only became of this news today, which makes the following correspondence I had with Dan Miles over the weekend even more poignant and appropriate:

From:
Date: Sat, 9 Aug 2008 13:31:48
To:
Subject: Re: The Globe's ABCP tear jerker. Non sequitor


Is everyone and everything hypocritical but you Brent?



From: brent.fullard@rogers.com
To: Miles, Dan
Sent: Sat Aug 09 14:02:43 2008
Subject: Re: The Globe's ABCP tear jerker. Non sequitor

So far, yes. That's where lying will get you. You're still at the top of the list. Something you can tell your grand kids as you recount your days as mouth piece for Harper's intellectually corrupt regime. There, I said something positive.


Finance Minister Flaherty looses his director of communications
The Hill Times,
August 11th, 2008
By Abbas Rana

And Storeshaw leaves Treasury Board President Toews' office to join Flaherty's office as the chief spokesman
Displaying start of article containing 980 words - After spending about two and a half years in Ottawa as director of communications to Finance Minister Jim Flaherty, Dan Mileshas decided to move on.

In a telephone interview last week, Mr. Miles told Hill Climbers that when he started his job with Mr. Flaherty (Whitby-Oshawa, Ont.)—after the Harper Conservatives won the 2006 federal election—he never expected the minority government to last this long, and during this time, he has been travelling between his principal residence in Port Perry, Ont., and Ottawa. Since it's not known when the next federal election is going to be and this minority government could last until October 2009, he said he decided to move home to work in the private sector.

Edwards scandal rocks US media

Today we learn:

Edwards scandal rocks US media
News organisations under fire for failure to expose Democrat's extramarital affair (details below)

Meanwhile in Canada, the media have stood idly by, while hard working, tax paying Canadians have lost $35 billion of their retirement life savings and an essential investment choice based on the lie called tax leakage.

Yes Virginia, tax leakage is a lie. A hoax. A media coddled conspiracy. If you disagree, then prove otherwise. I am glad to be proven wrong.

The only tax leakage, is the tax leakage CAUSED by this policy, from all the $96 billion in trust tax related LBO takeovers, including BCE

How unwise is that?

At least one media person in Canada has the fortitude and moral integrity to report on the facts, namely Diane Francis who has consistently argued: “Prove the case or drop the tax”.

The rest of the media in Canada have condemned income trust investors as “guilty until proven innocent”. Thanks.

Meanwhile , what kind of utterly lame professional journalist would ever say something like this about their professional misconduct; “I didn't explore the possibility that [Flaherty] was lying. Perhaps I should have.” Carol Goar, Toronto Star, January 2008

So what has Carol Goar done to atone for her sins? Nothing.

Talk about a cover-up by the media. Maybe Canadian journalists can reform themselves before this Harper government cover-up about tax leakage gets completely blown......along with their credibility. Just like has no occurred with the Edwards scandal or the episode with WMD as the false justification for Iraq.

Don’t these journalists realize that they are instruments to their own demise? We don’t need newspapers anymore if they don’t report the news. The internet is the quick and readily accessible antidote to journalists’ inability to perform their duty.

Print journalists are one button click away from being irrelevant. Why are they compelling their readers to make that choice?

See also: “It shouldn’t be the role of journalists to knowingly propagate lies”

One Judith Miller is one too many. Ditto for Carol Goar.



Edwards scandal rocks US media
News organisations under fire for failure to expose Democrat's extramarital affair
Paul Harris in New York
The Observer,
Sunday August 10 2008

When former presidential candidate John Edwards finally admitted to having an extramarital affair this weekend he faced an outpouring of recrimination. But a lot of ire has now been aimed at the mainstream media in America, which did not report on the story even as it became a national talking point on the internet and late-night television.

That blanket of silence was finally lifted after Edwards, a former senator who has run twice for the Democratic presidential nomination, gave a television interview to ABC News in which he detailed his romantic relationship with former campaign worker Rielle Hunter, which he said occurred in 2006.

The news was like a dam breaking in the mainstream media. Suddenly Edwards' affair became a front-page story. For many in the new media world of blogging, however, the coverage is too little, too late.

'There will be ramifications from this incident on the blogging community and also on the mainstream media,' wrote Steve Clemons, a blogger at the Huffington Post, an online newspaper which has led reporting of the affair.

The fact remains that the Edwards story was ignored for almost nine months by the vast majority of American newspapers, radio and TV news organisations despite detailed accounts of the scandal in the National Enquirer and widespread coverage on the internet.

The scandal was also covered by many foreign newspapers, leading to the bizarre situation in which many Americans were reading detailed accounts of the allegations long before their mainstream media news organisations were reporting on it.

The "globe" has become Flaherty's catch-all excuse:

It's a good thing Flaherty didn't head the IMF. ......He'd have no one to blame, except his own miserably incompetent and negligent self:


August 2008: "Canada is feeling the impact of global economic factors that are beyond the control of any one individual or government"

Spring 2007: Trust buyouts not my fault, Flaherty says

TORONTO, OTTAWA, LONDON -- Income trusts are being sold at an increasing rate, largely to foreigners and private equity players, but Finance Minister Jim Flaherty rejects the charge by critics that the Harper government's controversial income trust tax is in some way to blame.

"This is not something that has to do with a particular tax policy," he said yesterday during a visit to London to promote his 2007 federal budget.

"It has to do with large pools of capital that have been accumulated and are looking for purchases in various parts of the world."

The Globe's ABCP tear jerker, non sequitor

You have to love the hypocritical Globe and Mail.

Today they have a feature article on the ABCP mess, attempting to falsely portray it as “retail investor” problem, when in fact this market is predominantly an institutional market. Otherwise the Public Sector Pension Plan wouldn’t have lost $1 billion on ABCP and the Caisse wouldn’t have lost, what, $1.9 billion?

The Globe’s ABCP focus on retail is all part of a campaign to falsely position this issue in the minds of the public in advance of a government bailout. Why? Well, we have learned from the income trust issue just how sacrosanct the savings of pension funds are, which is why Flaherty gave them an income trust “carve out”, creating a tax arb between the pension funds and average Canadians who save through RRSPs. His idea of “leveling the playing field”?

The Globe has quite the track record of falsely positioning financial issues in the minds of the public. Just look at the hatchet job that Eric Reguly of the Globe did on income trusts over a two year period leading to Halloween 2006.

Do these stories strike you as anything resembling “balanced journalism”?

Capitalism for slobs.
By Eric Reguly. March 2005 Report on Business
Income trusts are turning Canadian CEOs and investors into coupon-clipping couch potatoes
Income trusts are the glazed doughnuts of the financial world, and the investors who gorge on them are becoming fat and happy. Soon, they will become lethargic, their arteries and brains clogged with trust lard. And what's bad for investors is also bad for corporate Canada.

Trust lobbyists, that's enough of your fury
By Eric Reguly. December 2006 Report on Business
Someone should encase income trust lobbyists in concrete and fling them off a bridge into deep water. On second thought, forget it; even that wouldn't stop the misguided creatures. Houdini-like, they would somehow break free and call for Jim Flaherty's head the moment their lips broke the surface. They are unstoppable and insatiable.
Still, the trusts lobbyists are lusting for blood, as if it's their god-given right to determine tax policy. They should be ignored.

Trust lobby had no hope against Flaherty
By Eric Reguly. February 1, 2007 Report on Business
If the expanding array of income trust lobby groups were to emboss their stationery, they might consider the image of Sisyphus, the symbol of hopeless labour. The lobbyists keep pushing the rock up to Jim Flaherty's door only to have it roll back upon them with great squishing sounds. Repeat process, repeatedly.
There’s no arguing with the man (Flaherty), and the trust’s disjointed effort only made it easier for him to say no

Rather than maligning income trusts and income trust investors, the Globe should be maligning ABCP and ABCP investors. Anyone who put their life savings in something they didn’t understand is certainly setting themselves up for disappointment. Like Alan Jones who stated on the front page of the Globe “If you were say investing in a mutual fund or something like a bank stock, and you knew what you were buying, you’d know the possibility that it was going to lose money. But in this case we weren’t informed”.

So what’s his point? He’s not at fault? If so, he stole that line from Jim “It’s not my fault.” Flaherty.

So where are the Globe’s cries of “ponzi scheme” and “you weren’t properly diversified”? These charges are aptly applied to ABCP investors, and not to income trust investors, to whom the Globe solely directed them.

Contrast ABCP to the income trust investor, who was investing prudently in real businesses to generate their much needed retirement income and not through some black box financial concept called ABCP.

The only risk these investors imprudently took was relying on Stephen Harper’s false promise.....not knowing that the Globe and every other media outlet in Canada would subsequently hide the truth behind Stephen Harper’s false premise for breaking that promise, namely the allegation that income trusts cause tax leakage.

The Canadian media are as bad as ABCP. In fact worse. Black box financial instruments are replaced by black box journalism.

However, as with all things "unnatural", that house of cards will soon collapse, as well. Thanks to the internet.

Hi, I'm Stephen. This is my brother Jim and my other brother Jim

You probably know them for their valiant consumer activism:

Income trust Jim (allegedly cause tax leakage, and acne from too much coupon clipping)

Text messaging Jim (sorry, I was just trying to score political brownie points)

Would you like to meet the rest of my family?

Head over heels mad Max?

Nuclear safety Gary?

Land mine Helena?

Nobody buy's that argument Diane?

It was a difficult decision Jason?

A primer for Jack Layoff.....er Layton

PRIVATE EQUITY: Locust or lifeline?
by Peter Atrill
ACCA the global body for professional accountants
18 Oct 2007

Synopsis: The private equity industry has developed rapidly in a relatively short period of time. It has now reached a point where it has entered the public arena through the acquisition of large, listed businesses. This has drawn attention to certain business practices, which critics have been quick to denounce. It has also exposed tax anomalies that have created unfairness among taxpayers.

When a different point in the economic cycle is reached, those who have issued dire warnings against Private Equity’s heavy reliance on debt may be proved right. High levels of gearing impose strict financial discipline on the managers of a business. Expenses have to be tightly controlled, underperforming assets sold, and surplus workers dismissed if the business is to meet its interest payments and maturing capital repayments. To tighten control further, and to encourage wealth-maximising behaviour, managers of the business are often rewarded through aggressive incentive schemes.

Studies in the US suggest that, on average, returns from private equity over recent decades are not impressive when compared with stock market returns7. This is a somewhat surprising conclusion, particularly given the higher level of financial risk borne by private equity-backed businesses. It should be expected that their returns would significantly outperform stock market returns. In fact, studies in both the UK and US suggest that, once an adjustment is made for the risk premium arising from high levels of gearing, average returns from private equity are at best mediocre and at worst significantly underperform the market

Introduction:

Although the private equity industry is still at an early stage of development, it has provoked much controversy. In the eyes of some critics, it is little more than ‘casino capitalism’. Private equity firms simply acquire businesses, sell off their assets, shed employees, and undermine the working conditions of those remaining: all to make fat profits for a few. Unsurprisingly, these claims are vigorously denied by private equity firms, which view themselves as an essential ingredient of a strong, dynamic capital market. They, and their supporters, argue that private equity helps in developing leaner, more efficient businesses, which, in turn, helps the economy as a whole. Indeed, it has been suggested that the methods employed by private equity firms offer ‘a compelling business model for the 21st century’[1].

In this article, the case for and against private equity will be explored. Possible benefits will be examined and the problems and risks associated with the growth of private equity will be identified.

What is private equity?

Private equity firms raise their funds from private sources, such as pension funds and wealthy individuals, and use these funds to acquire a controlling interest in a business which they see as underperforming. Having acquired a business, they attempt to improve its fortunes through strong management and tight financial control. Although they invest mostly in unlisted businesses, they have recently extended their reach and have begun to acquire listed businesses. Following acquisition, these businesses are usually de-listed and restructured, perhaps with the intention of re-flotation at some future date. As well as providing investment finance, private equity firms also offer advice on strategic and financial issues to their client businesses.

A private equity firm will normally provide finance for a business through a mixture of debt and equity. The debt element is usually large so as to produce additional benefits from gearing. (The Automobile Association (AA), for example, was acquired in 2004 by a private equity firm for around £1.8bn, of which £1.3bn was financed by debt.) The debt is typically underwritten by banks but is increasingly offered through the debt market.

High levels of gearing impose strict financial discipline on the managers of a business. Expenses have to be tightly controlled, underperforming assets sold, and surplus workers dismissed if the business is to meet its interest payments and maturing capital repayments. To tighten control further, and to encourage wealth-maximising behaviour, managers of the business are often rewarded through aggressive incentive schemes.

The trend towards the acquisition of large listed businesses such as Hilton Hotels in the US, Alliance Boots in the UK, and Qantas Airways in Australia have brought private equity deals much more into the public arena.

This new trend has been attributed to an incentive effect created by fee income linked to the size of private equity investments and to a less bracing competitive environment than is the case for acquiring smaller businesses.

Whatever the underlying reasons, these deals have placed the spotlight on what has formerly been the fairly secretive world of private equity. The business methods used, and their social and economic impact, have attracted the attention of trades’ unions, financial regulators, and governments.

Locusts or lifelines?

Private equity is now big business. In the first half of 2006, more than £11bn of private equity was raised in the UK, which was more than that raised through initial public offerings on the London Stock Exchange[2]. The British Venture Capital Association (BVCA), the industry body for private equity, sees the increasing importance of private equity as a positive development. It argues that it is good for the economy, good for jobs and good for pensions. Around 1,300 UK businesses receive private equity investment each year and, according to the BVCA, private equity-backed businesses have grown faster and created more jobs than FTSE250 businesses over the past five years.

Furthermore, as many pension funds invest in the private equity funds, the returns they receive benefit pensioners[3]. Supporters of private equity concede that producing leaner, more profitable business can be a painful process. Tough decisions have to be made - but the end justifies the means.

Thus, according to one leading supporter:
‘There is no room for passengers nor surplus assets in an efficient business and there is a need on occasions to downsize the workforce and sell off assets to make the business more viable in the future[4].’

It is not just the business itself that may be affected: the methods employed by private equity firms may create echoes elsewhere. Other businesses, particularly those feeling vulnerable to a takeover from a private equity firm, may adopt similar methods, such as high gearing and downsizing, in order to remain viable and independent. Critics of private equity point to the increasingly high levels of gearing used by private equity firms to finance acquisitions.

This trend is partly due to the ready availability of cheap debt and partly due to the rising acquisition costs as a result of increasing competition among private equity firms. The key question, however, is where will it all end? According to the UK Financial Services Authority (FSA) the default of a large business, or a group of smaller businesses, backed by private equity now seems inevitable[5]. If so, it may create financial shock waves that will adversely affect both the liquidity and volatility of the debt markets and, perhaps, affect the wider economy.

Implications for Capital Markets and Stock Exchanges:

The longer-term implications for capital markets resulting from the growth of private equity have also caused concern. It has already been mentioned that listed businesses are increasingly targets for private equity businesses and, once acquired, are promptly de-listed. It is also the case that growing businesses, which normally seek access to finance through a stock market listing, can now have their financing needs accommodated by private equity firms. Both result in fewer listed businesses, which has worrying implications for businesses and investors. From a business viewpoint, the benefits of listing, such as accurate share valuation, access to a wide pool of finance, and the opportunity to develop and transform, can be a real loss. From an individual investor’s viewpoint, the opportunity to invest in large, growing, businesses becomes more limited and capital markets become less attractive.

Inherent Complexities:

The complexity of many private equity deals has also caused concern. When structuring a particular financing package, a range of complex financial instruments, including derivatives, may be employed involving many different parties. As a result it is not always clear who bears the financial risk and what their likely reaction will be in a crisis. Furthermore, the participation of so many parties in private equity deals leads to an increased risk that price-sensitive information will be leaked. This is a particular problem, where listed businesses are targeted for acquisition.

Disclosure concerns:

The recent trend towards acquiring large listed businesses has been greeted by calls for private equity firms to be more transparent and accountable. It is argued that not enough information is publicly available to permit a proper assessment of the performance of private equity firms. It has also been argued that there is a need for businesses that receive private equity backing to communicate to a wider group of stakeholders such as employees, suppliers, and customers concerning the aims and objectives of a business and its plans for the future. It is worth pointing out, however, that, on occasions, the acquisition of a business by a private equity firm may actually improve transparency.

For example, when the AA formed part of Centrica plc, the utilities group, information relating to the business within the annual financial reports of the group was sparse. However, since being taken over by a private equity firm, a 56-page annual report on the business is now published[6]. Nevertheless, it is generally the case that higher standards of transparency and accountability are required now that private equity has entered the public arena.

Tax Unfairness:

Critics have suggested that the taxation system works to the benefit of private equity: first, because of the tax relief available on interest payments, and second, because of the ‘taper’ relief on capital gains tax. As interest on debt attracts tax relief, the cost of debt becomes cheaper and so, it might be argued, encourages higher levels of gearing. While this relief is available to all businesses, it is nevertheless true that private equity-backed businesses tend to exploit this more. Some believe that there should be a limit on the amount of tax relief for interest payments in order to make high levels of gearing less attractive. Indeed, some European countries are already toying with this idea. This proposal, however, is based on the belief that high levels of gearing are also imprudent levels of gearing, and that the market has misjudged the level of debt that businesses can sustain.

Credit risks to the economy:

When a different point in the economic cycle is reached, those who have issued dire warnings against heavy reliance on debt may be proved right, but their day has yet to come. Private equity executives receive much of their rewards from their share of the profits in the selling of a business (known as ‘carried interest’). In the UK, gains on the sale of business assets are liable to capital gains tax, which ‘tapers’ from a high point of 40% down to 10% where an asset has been held for more than two years. If possible, it is usually better to receive rewards in the form of ‘tapered’ capital gains rather than income as the latter is taxed at 40% for high earners. This generous level of taper relief for capital gains was introduced to reward entrepreneurs and risk-takers. However, a problem can arise where there is a misalignment between amounts invested and the claims made on the gains from sale. Whereas private equity executives may inject only 1% of the total equity capital, they may receive a 20% stake in the gains from sale. There appears to be a fair degree of acceptance, even within the private equity industry, that this situation creates unfairness among taxpayers.

Private Equity Investment Returns:

Private equity is generally assumed to generate high returns for investors and there is plenty of anecdotal evidence to support this assumption. Nevertheless, studies in the US suggest that, on average, returns from private equity over recent decades are not impressive when compared with stock market returns7. This is a somewhat surprising conclusion, particularly given the higher level of financial risk borne by private equity-backed businesses. It should be expected that their returns would significantly outperform stock market returns. In fact, studies in both the UK and US suggest that, once an adjustment is made for the risk premium arising from high levels of gearing, average returns from private equity are at best mediocre and at worst significantly underperform the market[7,8]. This average performance, however, masks a much wider range of returns than with listed equity investments: for the investor in private equity funds, therefore, the choice of investment fund is critical.

NDP Leader Jack Layoff. Cause and effect

Jack Layton, better known as Jack Layoff, should take some of his righteous indignation, normally reserved for trivial undertakings like ATM fees , text messaging fees and pay day loans and direct it towards himself. The reason for this is simple, Jack Layton is as responsible for the 2,500 layoffs at BCE as its new owners, Ontario Teachers’ Pension Plan, Providence Capital, Madison Dearborn Capital and Merrill Lynch Capital Partners, are.

The cause and effect of Jack Layton’s role in these 2,500 layoffs is irrefutable. You see Jack Layton and his party are the champions of the income trust double tax. The income trust double tax that prevented BCE from converting to an income trust to satisfy its need to maximize shareholder value. What naive Jack falls to understand is that BCE is worth more when it distributes it earnings to its shareholders rather than blowing $8 billion on another Teleglobe, hence the value bump from an income trust. Meanwhile tax revenue to Ottawa would have been maximized since BCE's shareholders used to be taxable Canadians. Now they are not.

Jack Layton also fails to understand cause and effect.

You see, Jack Layton’s blind support of Stephen Harper’s Halloween massacre, resulted in BCE becoming a highly desirable and highly vulnerable target for foreign private equity, Sure enough, three days later BCE’s CEO Michael Sabia was on the phone with New York based private equity powerhouse KKR discussing that very alternative......taking BCE private by way of a leveraged buyout. That was November 3, 2006.

Now it's August 9, 2008. Not only was the leveraged buyout of BCE a highly predictable, cause and effect, outcome of Jack Layton’s blind support of the income trust tax, so too were the many adverse outcomes. In the case of BCE alone, here were the predictable outcome

Job losses (2,500 to date)
Tax losses ($800 million less per year in taxes from BCE as a private LBO as opposed to a public LBO
Foreign takeover (BCE used to be Canada’s most widely held public company with 600,000 shareholders, versus 4, three of whom are US)
Debt binging (BCE will now have $44 billion of debt and $8 billion of equity, instead of the near reverse)
Debt binging will lead to higher service costs (what does Jack think the text messaging fee increase is for, if not to service BCE’s new mountain of debt)
Breaking of pension rules (how can Teachers’ own 50% of BCE when pension rules restrict it to 30%, what scheme is being used to circumvent federal legislation?)
Creating a two tiered pension system (why can pension funds own trusts privately and not be subject to the trust tax, when the 75% of Canadian without pensions have to pay a 31.5% tax? In their RRSPs?)

When it comes to his blind support of this policy to double tax businesses as trusts held in RRSPs, Jack Layoff has a lot of supporters. Normal NDP folk like Paul Desmarais Jr., Gwyn Morgan, Dominic D'Allesandro and John Manley. Also Jack has a lot of support from the blind media in Canada who feel, like Jack Layoff, that 18 pages of blacked out documents is ample “proof” of this policy’s central rationale, namely alleged tax leakage. Jack Layton along with Canada’s media are taking this country into the dark ages, which suits Bay Street just fine. Blacked out documents are Jack Layoff idea of transparency. Ditto the Toronto Stock Exchange and TD Bank.

And here’s the cause and effect of that:

Permanent job layoffs
Massive losses in tax revenues
Foreign takeovers
Two tiered pension system
Pension funds gone wild
Zero withholding tax paid by foreigners on leveraged buyout loans
Lessened competition in key sectors like telecom
Higher cost of capital for Canadian businesses
Less choice for investors

Goldman Sachs would be proud of Jack Layton. I know Manulife’s CEO is. He said as much, at the public hearings on Income Trusts. Go Jack Layoff, go. You are destined for greatness, as enumerated above.

PS: Did I mention the other 44 trust takeovers that have resulted in an additional $1.2 billion in annual tax losses. I wonder how many layoffs? Maybe Jack Layoff can tell us?

Prentice is opposed to spam? That's news.

It looks like Jim Prentice has broken from his party's position on spam:


Prentice on text messaging
August 8, 2008

OTTAWA — — Canada will not interfere with the day-to-day business decisions of major telecommunications firms, despite public unhappiness over moves by two major companies to charge for incoming text messages, Industry Minister Jim Prentice said Friday.

Mr. Prentice said he had expressed his “serious concerns” to the firms over the possibility they would charge customers for unwanted spam text messages and said they had assured him customers could have such charges removed.


As for spam, what about taxpayers footing the bill for all these "10 percenters" (pictured above) from the Conservative Party that are being stuffed in mail boxes across the country at taxpayer expense?

Dare I say hypocritical?

Sorry BCE, "better" isn't good enough

Today Bell launched its new look, and new branding:

Bell Home Phone (where have I heard that before?)
Bell TV
Bell Internet

Meanwhile they have a new tagline "Today just got better" . That sounds a lot like Telus’ “The future is friendly”

Catalyst Asset Management had also prepared a new name and a new mantra for the company as well, over a year ago. This name is consistent with how the company was going to be capitalized and run, because “better” just isn’t good enough:

Belloptimal.com

Snake eyes for Prentice...how about the 2,500 BCE firings?

Government won't interfere in wireless texting charges: Prentice
Friday, August 8, 2008
CBC News

Minister of Industry Jim Prentice said Friday the government had no intention of introducing new legislation to regulate cellphone companies over changes in text messaging services.

Prentice had met with the heads of Bell Mobility and Telus over the companies' new texting charges introduced in July, which called for customers whose cellphone plans did not include texting bundles to be charged 15 cents for incoming text messages. Previously, customers without text plans were only charged for outgoing messages.

The charges were not popular with consumer groups, and New Democratic Party leader Jack Layton called them a "cash grab" and called for the government to step in.

But Prentice said in a statement Friday that after meeting with the two companies, he was "assured that customers charged for spam could contact their service provider to have the charges removed from their bills."

"Given these undertakings by Bell Mobility and Telus, I would encourage consumers dissatisfied with existing plans to seek alternatives. The telecommunications market in Canada is dynamic — choice is available," he said.

Prentice said the government's auction of wireless spectrum was designed to create a more competitive market and more choice for consumers.

"Based on the level of competitive bidding that took place, we think we are well on our way to achieving those goals," he said.

Bell's new texting charges went into effect Friday. Telus announced a similar plan, with its changes set to take effect on Aug. 24.

Consumers have protested the move as a cash grab in response to the increasing reliance on text messaging in Canada. In the first three months of 2008, Canadians sent 4.1 billion text messages, according the Canadian Wireless Telecommunications Association. In 2007, Canadians sent more than 10 billion messages.

Two Quebec residents launched class action lawsuits against each of the companies last month, and the federal New Democratic Party also started an online petition and Facebook group to protest the changes. The Facebook Group, dubbed "I’m against the text message cash grab" has attracted more than 36,000 members since it formed a month ago.

NDP Leader Jack Layton issued a followup statement Friday, calling on the government to implement legislation to protect consumers from the charges.

"Cellphone companies want to charge consumers 15 cents for each text message they receive, including spam," said Layton. "Cellphone companies are gouging consumers, and our government stands back and watches."

Bell spokesperson Mark Langton confirmed Prentice's statement, saying the company has strong anti-spam filters on its network and would have charges from spam removed.

Bell's introduction of the new charges coincides with the company's launch of a new marketing campaign, centred around the tagline "La vie est Bell" in Quebec and "Today just got better" in the rest of the country.

President and CEO George Cope, who took over leadership of the company on July 11, said in a statement the new branding is part of the company's new strategy and new goal to "be recognized by customers as Canada's leading communications company."

Just two weeks after taking over at Bell, Cope initiated a shakeup at the company, cutting 2,500 management positions. The company is also changing the names of its business units: Bell residential phone service becomes Bell Home Phone, Bell Sympatico changes to Bell Internet and Bell ExpressVu becomes Bell TV.

The “move on” mentality of Dan Miles

For those who don’t know, Dan “move on” Miles is the highly ineffectual Communications Director of Jim “it’s not my fault” Flaherty.

Dan seems to have a difficult time rationalizing his boss’s policy on income trusts.

That’s probably because no credible explanation has been given for this policy, and no proof of tax leakage had been provided.

The best argument that Dan Miles is able to muster is “move on”.

Move on? Whose purpose does that serve, if not Dan Miles' and Jim Flahery’s. It certainly doesn’t serve the proper functioning of our government called Canada.

Dan Miles used his “move on” logic at the time when CAITI launched its JimHadHisChance.ca billboard campaign in the spring of 2008. Here’s what Dan had to say in the Hill Times article of March 31, 2008:

“It’s regrettable that they can’t move on.”

Regrettable for whom? Oh you, of course. Why is it always about you?

In a further attempt to get mileage from this same lame vacuous argument, Dan Miles had the following conversation yesterday with Doug Boraas of Calgary via e-mail:

Doug to Dan:

Dan,

Why are you trying to defend your boss-(Flip-Flop Flaherty) in letters to the editors that are printing the truth re taxing income trusts as per below:

I don't know Mr. McMillan but when you tried to run down Deb Yedlin in Calgary a few weeks ago, you are about as ignorant and arrogant as your predecessor Diane Ablonczy.
Deb Yedlin is indeed one fine business editor and represents the facts, NOT the lies you and Harper et al are peddling!

Doug
A former conservative

Dan to Doug:

If she is so great at reporting the facts how is it she could write that
Flaherty had not been in Calgary since the Income Trust announcement in
October 2006.... When in fact he had attended an editorial board at her
paper last year?
How is that?

Doug to Dan:

As far as I know Flaherty has not been in Calgary since he played his dirty
Halloween trick on Oct. 31-06. That is a very minute point anyway!
Are you the best Flaherty can hire?
Just answer the question below:
So I say to Dan Miles, concerning his allegation of “tax leakage” and
“shifting of tax burden onto the shoulders of average Canadians”: WHERE ARE
THE FACTS" WHERE IS THE PROOF?
What about the 18 pages of blacked out documents?
Doug
A former conservative

Dan to Doug:

Well Doug I appreciate the personal insults.... And if you can defend a
reporter who ignores the facts..... It speaks volumes about her
credibility and yours..... Move on.....

Doug to Dan:

Well Dan, I'll move on when you move on and answer the questions as per
below:
If you can't answer them, you are a hypocrite indeed.
You are also a true conservative as you cannot answer any straight question
directly and honestly. (Lies, lies and more lies)
As far as I'm concerned, you have absolutely NO credibility.

Doug
A former conservative

George Bush is the "Decider". Harper is the "Apologizer"

Question for Jim Prentice: Are the 2,500 firings at BCE included in these numbers?

Canada posts biggest job loss in 17 years


JOHN PARTRIDGE

Globe and Mail Update

August 8, 2008 at 7:47 AM EDT

The Canadian economy lost 55,200 jobs in July, when economists had forecast an increase, but the unemployment rate shrank to 6.1 per cent, Statistics Canada said Friday.

The employment figures showed the biggest loss in jobs since February 1991, when 57,000 disappeared as recession gripped Canada. The bulk of the July losses – 48,000 – came from part-time positions, while the hardest hit sectors were business, building and other support services, and educational services.

“Statistics Canada seems to have caught up with what we've been reading in the newspapers for months, that a lot of plants were closing and a lot of jobs were being shed,” CIBC World Markets economist Avery Shenfeld said. “There were particularly heavy losses in the private sector, which is, again, a worrisome sign.”

In fact, the only significant gains came in accommodation and food services, Statscan said. The public sector also showed some gains.
Related Articles

Economists had predicted the addition of 5,000 jobs, the same number unexpectedly shed in June. They also had forecast the unemployment rate would remain steady from the previous month at 6.2 per cent.

However, Statscan said the rate edged down because many people, particularly youth, left the labour force.

“Canada's economy is clearly downshifting, in response to the downturn in the U.S. and to the run-up in the [Canadian dollar],” BMO Nesbitt Burns economist Jennifer Lee told clients in a note.

“Of relief to policy-makers, the slackening labour market is taking steam out of wages,” she added, noting Statscan also reported that the increase in average hourly earnings slowed to just under 4 per cent, year over year, the smallest gain in more than 12 months.

Dan Miles: Jim Flaherty’s Communications Director and Hypocrite-at-large

Dan Miles has been working overtime of late, defending his hapless boss, Jim Flaherty, against the constant barrage of negative articles that are the manifestation of Jim’s two years as Canada’s Finance Minister.

Many would say Canada’s worst Finance Minister.

The recent article entitled “Continuous berating of Province won't turn economy around” by Ian McMillan that appeared in Flaherty’s home town paper, the Durham Region News on July 31, 2008, was deserving of Dan Miles' protective instincts in defense of his boss.

This is where the HYPOCRITE part comes in.

Dan Miles wrote today that: "I don't mean to lecture Mr. McMillan, but I want to ensure that in future he can buttress his argument with the facts, not empty rhetoric."

This is most interesting of a request, as well as most reasonable. In fact this is the very position that CAITI and the many other associations including, the Coalition of Canadian Energy Trusts, The Canadian Association of Income Funds, The Liberal Party of Canada as well as the Green Party of Canada have taken on the matter concerning Jim Flaherty’s income trust policy. To date that policy is baseless in terms of facts. It is a policy based on nothing more than mere rhetoric.

That policy is predicated on the assertion that income trusts cause "tax leakage" to the government. So where’s the proof Mr. Dan Miles, Hypocrite-at-large? Why do the 2.5 million Canadians who are being deprived of an essential investment option and who incurred the loss of $35 billion in their hard earned life savings being given 18 pages of blacked out documents as “proof”?. Puhlease.

So I say to Dan Miles, concerning his allegation of “tax leakage” and “shifting of tax burden onto the shoulders of average Canadians”: WHERE ARE THE FACTS" WHERE IS THE PROOF?

"I don't mean to lecture Mr. Miles, but I want to ensure that in future he can buttress his argument with the facts, not empty rhetoric."

Therefore to quote Diane Francis, Editor-at-large of the Financial Post: "Prove the case or drop the tax."

PS: Jim Flaherty, your tax leakage analysis is fraudulent.
So too is your rhetoric.

Sort of like that empty rhetoric in the Hill Times of March 31, 2008 that quoted an unidentified Conservative MP from Ontario, as saying:

"I’m sure Flaherty would love to go a couple of rounds with these [CAITI] guys in a debate situation.”

To which we replied in the April 7, 2008 edition of the Hill Times:

"Just say when and where, we'd love to debate the Finance Minister"

Perhaps Dan Miles could arrange that debate, or was that just more empty rhetoric on the part of the Conservative Party of Canada? A party defined by All bluster, no substance. All hat, no cattle.

We can be contacted at OutstandingDebate@JimHadHisChance.ca

Diane Ablonczy comments on LBO of BCE

At a public meeting on March 6, 2007, Diane Ablonczy was asked about the possibility of Telus being acquired by way of a leveraged buyout. The question could just as easily have been about BCE.

At the time of this question Diane Ablonczy was Parliamentary Secretary to Finance Minister Jim Flaherty. Based on her skills of denial and subterfuge, she was later promoted by Stephen Harper to his cabinet, where such skills are obviously highly valued. Here was the question and Diane’s response:

“What is the Canadian Government's stance on the scenario of US private money crossing the boarder and purchasing undervalued assets such as Telus.?" "How will you approach the scenario of US ownership, profit moving south and debt left in Canada?"

Ablonczy told the the questioner that he was "fear mongering". "Nobody buys into that argument" she clearly stated. “I think it’s an alarmist’s view of what will happen” she concluded

Well, I have a new question for Diane Ablonczy. Now that it has happened, what are you going to do about it? What are you going to do about the 2,500 lost jobs. These aren’t temporary layoffs. These are permanent job losses. What about this $34 billion of new debt, that on top of the existing debt means that BCE will pay zero taxes as a corporation, since these massive interest payments are tax deductible? That means that BCE will pay $800 million less in taxes every year for a company that was acquired for a mere $8 billion in equity. That means that Canadian taxpayers are funding 10% of the purchasers purchase price each and every year. In ten years, the whole thing will have been paid for by Canadian tax payers. I hope that Ontario Teachers’ and its three US partners are happy

Rather than helping to fund 10% of Teachers’ purchase price every year, these taxes would be sufficient to fully fund the cost of the Registered Educational Savings Plan, as the Green Party wisely called for, and that would allow parents to fund their children’s post secondary educations.

So the question remains, now that the very event that was predicted by one of your constituents back in March 2007 has come true, Diane Ablonczy, what are you going to do about it, since your “alarmist” comment, left nothing open for interpretation. You too, insinuated that you found the prospect of BCE taken over by private equity to be an unwelcome outcome.

So why did Industry Minister Prentice approve it?

Question for Jim Prentice: Did BCE employ LIFO or FIFO when firing 2,500 employees?

Today we learn that it cost BCE a one time payment $230 million to fire 2,500 of its employees, and save $300 million a year, in perpetuity.

This move was mandated by BCE’s new owners, Ontario Teachers’ Pension Plan. It seems that teachers’ pensions are more important than workers’ jobs. Spending $230 million in severance to save $300 million year in wages, means that the average severance package for these former BCE employees was 9 months’ pay. That’s not a lot of money for a person who has a mortgage to pay and needs to find a new job in a slowing economy, This leverage buyout of BCE was personally approved by Jim Prentice as Industry Minister and arose solely because of the actions of Jim Flaherty as Finance Minister and the Stephen Harper Conservatives. So too these 2,500 layoffs which are endemic to private equity leveraged buyouts, or don't these guys know that?

So how did BCE select these 2,500 workers to satisfy the voracious return on investment requirements of Ontario Teachers’?

Did Ontario Teachers’ do the humane thing and offer BCE’s entire workforce a buyout package, such that those who left we the ones who wanted to leave? No, as that would have cost more than 9 months average severance. More like one year or more in severance. Obviously, this firing exercise was motivated by getting the biggest bang for the buck. That would have meant firing the newest recruits first, since their severance payments would be the least, and yet the cost savings would be roughly the same, as opposed to firing the more long standing employees.

Therefore the answer to this question is:

LIFO: Last In, First Out, as opposed to

FIFO: First In, First Out.

Pengrowth to preserve tax flow through status, equivalent to Flaherty’s law firm

Pengrowth to keep structure as trust
Shaun Polczer, Calgary Herald
Published: Thursday, August 07, 2008

Pengrowth Energy Trust plans to maintain its corporate structure past a 2011 deadline to tax the royalty income vehicles, its chief executive said Wednesday.

With the federal government deadline to change the tax structure for trusts looming, CEO Jim Kinnear said Pengrowth would be able to employ some $3 billion worth of tax pools to shelter distributable income to unitholders for at least the next four years, until 2013.

"We believe there will remain strong demand for yield-based investments," he told a conference call to discuss second-quarter results.


"These pools can be used either to shelter income from the tax and can also be used to mitigate impacts to our unitholders beyond 2011."

One of Canada's largest royalty trusts, Pengrowth produces about 81,000 barrels a day.

During the second quarter, Pengrowth generated record cash flow of $267.9 million, or $1.08 per trust unit, compared with $250 million, or $1.02, in the same period of last year.

The trust paid back $168.2 million, or 68 cents per unit amounting to 63 per cent of cash generated in the quarter.

Nonetheless, Pengrowth lost $118.7 million on the heels of a $352.6-million hedging loss based on out of the money oil and gas contracts.

Kinnear described a "challenging" business environment characterized by the federal government's Oct. 31, 2006, tax decision followed by the Alberta government's September 2007 move to announce royalty hikes.

Brad Borggard, an oil and gas analyst with CIBC World Markets, said the question of what happens to trusts post-2011 is looming larger after the federal government in July clarified plans to allow trusts to convert back into corporations without penalty by 2013.

"The government is trying to be clear that they want them (trusts) to convert back," he said.

Barring a change in the ruling party, Borggard predicted the vast majority would convert back to corporations.

However, it might make sense for some outfits like Pengrowth to maintain the structure for as long as they can. With oil prices of $125 US, he predicted Pengrowth would become taxable in any event by 2013.

"If you have enough tax pools it can make sense if you stay on as a trust for a little longer," he added.

Pengrowth units rose 28 cents on the Toronto Stock Exchange on Wednesday to close at $17.48.

spolczer@theherald.canwest.com

BCE's Frank and Gordon say goodbye

Apart from Frank and Gordon, we still don’t know the identity of the other 2,498 BCE workers terminated by Ontario Teachers’


Goodbye, semi-aquatic rodents
Simon Avery and Jennifer Wells
The Globe and Mail
August 2, 2008



Frank and Gordon are leaving the marketing spotlight and heading back into the Canadian wilderness, as Bell Canada prepares to put a fresh face on its brand next week.

The cheeky, often impertinent beavers have represented the nation's largest phone company in broadcast and print advertising for almost three years. They first appeared in Quebec as Jules et Bertrand in late 2005 and then showed up in the rest of the country as Frank and Gordon at the Torino Winter Olympics.


Bell is unlikely to repeat the friendly animal theme when it launches its new marketing initiative next Friday around the opening of the Beijing Summer Olympics, for which Bell is a sponsor.


The new campaign has been created by Leo Burnett, whose clients include Zellers, Procter & Gamble and Moosehead beer.


Frank and Gordon officially bowed out yesterday with a full page ad in The Globe and Mail.


"I think it was nice and classy," said Jim Little, the former Bell executive who led the launch of the Frank and Gordon brand strategy. "Obviously the world has changed. I think they served a very useful purpose. They clearly had an iconic-type connection with Canadians. ... It's a nice way to end one era and start another one."


The demise of Frank and Gordon was widely expected as part of parent BCE Inc.'s efforts to reinvent Bell as a leaner, more responsive company. "They were very popular, but after nearly three years, it's time to move on," said a Bell spokesman.


Canadians' initial response to the frisky beavers proved lukewarm, said Mr. Little, who is now chief brand and communications officer at Royal Bank of Canada.


"Then we put the heavyweights into it during the Torino Olympics [and] four or five months later the response was instant and positive," he said.


Did he have any concerns about using animals as brand mascots - a ubiquitous strategy in the modern ad landscape? "They weren't animals for us. They were spokespeople dressed up as beavers."

How long before Charest realizes that McGuinty laid off 2,500 BCE workers in Quebec?

BCE recently announced the termination of 2500 of its “knowledge sector” workers.

These layoffs were mandated by BCE’s new owners led by Ontario Teachers’ Pension Plan.

Ontario Teachers’ is nothing more than a sovereign wealth fund preying on other Canadians?

These job layoffs will mean $300 million more a year to BCE’s new owners, and 2,500 fewer jobs in Quebec

The Ontario Government is liable for the pension benefits of its 278,000 active and retired teachers.

Ontario Teachers’ Pension Plan manages that liability for the Ontario government. They are the middle man.

Eliminate the middle man from the equation, and it is obvious that the Province of Ontario is funding its liabilities at the expense of the Province of Quebec.

How long is it going to take for Jean Charest to realize he is being had by Dalton McGuinty? How about the Bloc Québécois?

Who is taking care of Quebec's interests?

Is any one home?

We have a collect call for Mr. Jean Charest from Mr. Dalton McGuinty. Do you accept the charges?

"Income trust decision not a broken promise", Harper says

Dissecting Harper's lame excuse



Re: “Income trust decision not a broken promise, Harper says” Canwest News, November 2, 2006 (reproduced below)

This article reveal much about the inveterate liar that Stephen Harper is and Stephen Harper’s unwillingness to accept responsibility for his personal actions and decisions.

Let’s suspend reality for a brief moment and accept that Stephen Harper’s broken income trust promise was not a broken promise, that doesn’t change the fact that Harper’s policy rational of “tax leakage” is a blatant lie and a manufactured excuse.

There may have been “no leaks”, but nor has there been any proof of tax leakage. In fact tax leakage has proven to be a fraud Not only was there NOT tax leakage before, this policy has CREATED tax leakage.

However there WERE plenty of “deals with friends on Bay Street”...Gwyn Morgan, Paul Desmarais Jr. and whomever these people were that were being cited in the Globe;

“High-profile directors and CEOs, meanwhile, had approached Mr. Flaherty personally to express their concerns: Many felt they were being pressed into trusts because of their duty to maximize shareholder value, despite their misgivings about the structure. Paul Desmarais Jr., the well-connected chairman of Power Corp. of Canada, even railed against trusts in a conversation with Prime Minister Stephen Harper during a trip to Mexico, and told him he should act quickly to stop the raft of conversions, according to sources.”

If there were no “deals with friends on Bay Street”, why did Flaherty admit to this:

“"The income trust decision I will have to live with forever," Mr. Flaherty says. "What I find troublesome, quite frankly, is that I have CEOs of banks, and leaders on Bay Street who have said to me, privately, absolutely it was the right thing to do. But they don't go out publicly and say the same thing.”

As for Harper’s comment of “It was not that we would have no taxes for foreign investors”.....this is a joke. Harper eliminated the 15% tax that foreigners paid on interest to ZERO. Meanwhile how much tax do private equity firms pay????




Income trust decision not a broken promise, Harper says

Allan Woods , CanWest News Service
Published: Thursday, November 02, 2006

OTTAWA - Prime Minister Stephen Harper denied breaking a major election pledge with his government's surprise decision to tax income trusts, saying the party promised only to protect the incomes of Canada's seniors, not the profits of major Canadian corporations and foreign investors.

As the Conservatives and the Liberals warred over the bombshell move, which reverberated all day on Toronto's Bay Street, Harper on Wednesday told the House of Commons his government acted in response to the intentions of corporate giants such as Telus and BCE to convert to an income trust, a designation that allows the company to avoid paying corporate tax and returns higher dividends to investors.

"The commitment," Harper said, "was not that we would have no taxes for Telus. It was not that we would have no taxes for BCE. It was not that we would have no taxes for foreign investors or no taxes for major corporations. It was a commitment to protect the income of seniors."


The Conservative campaign document said the party, if elected, would "stop the Liberal attack on retirement savings and preserve income trusts by not imposing any new taxes on them."

The Conservatives were the only party to make such a pledge in the election campaign and opposition parties quickly produced on Wednesday dozens of old statements from Harper and other prominent Conservative MPs urging the Liberal government-of-the-day not to tax income trusts and promising that a Tory government would never do so.

Nevertheless, Harper's message was reiterated by Senator Marjory LeBreton, the Government Leader in the Senate, who said of the campaign promise: "We were specifically dealing with seniors in our policy platform."

All opposition parties appeared reluctant to oppose the substance of the decision on income trusts, which the government estimated could have cost them at least $500 million in lost corporate-tax revenue over four years. Because the decision calls for a tax to be levied, the opposition would have the opportunity to defeat the government in the Commons by voting against the new measures.

Instead, they attacked the apparent broken Tory campaign promise, which they said risked creating a climate of investment uncertainty in the country.

In question period, the Grits said the decision of Finance Minister Jim Flaherty led to a revolt at the Toronto Stock Exchange, which they referred to as "Black Wednesday," "a Day of Infamy" and a "$25 billion breach of faith."

"Innocent Canadians are suffering an economic bloodbath ... because they believed the prime minister," said Bill Graham, the interim Liberal leader. "He gave his word. Canadians acted on his word. He then broke his word."

Liberal finance critic John McCallum called for Flaherty's resignation, and accused him of having "converted the Canadian capital markets into the wild west."

"This flip-flop by Mr. Flaherty has made our markets a laughing stock," he said.

The Liberals have been under a cloud on the issue of income-trust tax rulings since the Royal Canadian Mounted Police launched an investigation into an alleged leak of a November 2005 decision by then-finance minister Ralph Goodale not to tax income trusts.

The investigation was announced in the middle of the election campaign and was credited with shifting substantial voter support to Harper's Tories.

Goodale's income-trust ruling came just days before the Liberal government was defeated in the House of Commons, but there was heavy investment in a number of income trusts that day and suggestions that government officials may have given Bay Street advance warning of the favourable news.

"There were no leaks, no e-mails, there were no deals with friends on Bay Street," Flaherty said of his handling of the decision. "There was confidentiality, deliberation and the provision of certainty for capital markets in Canada. Finally, there was an effort to create fairness for individual taxpayers and their families."


Conservative MPs and government officials acknowledged that Tuesday's income trust decision was "difficult politics" in the short-term.

"In the long term it's good public policy and I think Stephen Harper, if anything, has a reputation for making the tough choices and the correct policy decisions," said James Moore, the parliamentary secretary for Public Works. "The financial times are changing and this was a large and growing fiscal problem and it was creating a fiscal black hole."

But the tough decision is also a reflection of the reduced role that corporate Canada can play in federal politics, particularly if Conservative legislation to completely eliminate corporate donations passes through the Commons, said Jason Kenney, the parliamentary secretary to the prime minister.

"We've eliminated corporate funding for political parties and we don't think corporations should get away without paying their share, and this is the problem," he said.

awoods@cns.canwest.com

CanWest News Service

When it comes to the economy, these guys are all thumbs

FLAHERTY'S TAX CONUNDRUM

BCE Privatization Could Cost Him $800-Million In Tax Leakage; More Tax Loss Than From BCE & Telus As Trusts!

Paul Vieira,
Financial Post
Published: Wednesday, April 18, 2007

OTTAWA - Jim Flaherty, the Minister of Finance, could face another major tax loss headache --on the scale of what he attributed to income trusts -- should a buyout deal be reached between BCE Inc. and a consortium of private-equity investors.

Financing experts say a buyout of BCE -- led by tax-exempt pension funds Caisse de depot et placement du Quebec and the Canadian Pension Plan Investment Board -- would produce virtually the same results, taxwise, had the Montreal-based company converted to an income trust as planned.

"It is basically income trusts revisited," said Laurence Booth, an expert in structured finance at Toronto's Rotman School of Management. "And the implications for Ottawa are pretty much the same".

Yesterday, BCE confirmed it was in talks with the Caisse and CPPIB about taking the publicly traded company private. If successful, it would result in the largest buyout in Canadian corporate history.

It has been estimated the conversions of BCE and competitor Telus Corp. would, collectively, shrink corporate tax revenue by $800-million a year. David Lambert, a telecom analyst at Canaccord Adams, said yesterday he estimates that BCE alone pays, on a per-share basis, about $1 per share from its free cash flow toward taxes.

BCE has 808 million shares outstanding, which would translate into an annual $808-million tax bill under Mr. Lambert's calculations.

Last year, BCE had announced its intentions to convert to an income trust. But those plans were killed when Mr. Flaherty slapped a tax on income trust distributions to put an end to the popular corporate structure that allowed companies to avoid tax by dishing out most of the cash flow to investors [who paid the tax personally].

Mr. Flaherty said he decided to act because the investment vehicles were costing Ottawa $500-million in lost revenue annually, and warned that planned conversions would further threaten federal finances. [He failed to mention that individual trust investors would have paid even more taxes than the trusts would have, by way of the personal tax imposed on the distributions they received from the trusts.]

Under private-equity transactions, or leveraged buyouts, the investors finance the acquisition mostly with debt and a small equity component. The interest payments on that debt allow the private-equity investors to avoid, or greatly reduce, the amount of tax paid. [And there are no longer any trust investors to pay personal taxes on the revenues generated by the new company].

Further compounding possible problems for Mr. Flaherty is that pension funds can defer taxes owed. So if they own equity, dividends from those shares flow through without facing a tax hit.

"Financial markets are getting more innovative and you are getting some very low-risk businesses that can support more debt, and [investors] are finding ways of having them carry more debt in order to avoid the corporate income tax," Mr. Booth said.

He likened the Finance Minister's efforts to stem tax leakage to the title character in a Dutch legend. "[He] is a bit like the Dutch boy who has his finger in the dyke. He plugs one hole but then, bingo, another hole pops up."

Mr. Flaherty yesterday declined to comment on developments at BCE, or even mentioning the company's name. "I am not going to talk about anything that is subject to current market activity," he said.

But he dismissed suggestions that private-equity investors are, as Mr. Booth suggested, converting to a trust through the back door.

"That is nonsense," he said. "When you are talking about a company becoming an income trust under the old rules, you are talking about a company getting a preferred tax rate. When you are talking about a corporation continuing as a corporation but under different ownership, it is still taxable--at the same rate." [However, because of interest and other deductions for the new private-equity owner, little or no taxes are paid to the Canadian government by the new owner. And there are no longer individual trust investors to pay personal taxes on the generous revenues generated by the company.]

Mr. Flaherty has come under pressure, from corporate Canada and the Liberal party, for handicapping the business community with the trust tax and recent changes to interest deductibility of foreign financings by Canadian companies. These moves, his critics argue, will leave Canadian firms ripe for foreign takeovers and make them less competitive on a global scale.

John McCallum, the Liberal finance critic, said Canadians are starting to see the consequences of the trust tax.

"The effect of what he is doing is exactly the opposite of what he intended, because the holders of income trusts pay lots of tax," Mr. McCallum said. "All of these trusts are now being taken over in such a way so that the new owners will pay no tax.

"So, instead of a situation where a lot of personal taxes were being paid, you are having these induced takeovers by highly leveraged private-equity companies that will pay no tax."