Wednesday, January 7, 2009

Liberals to hear economic ideas during 'listening' tour

"At a time when Canadians are worried about their jobs, their pensions, and their savings, Michael Ignatieff and the Liberal party are committed to holding a national conversation about Canada's economy," the Liberals said in a release."

Well, if that’s truly the case, then the Liberal’s upcoming budget demands MUST include a repeal of the income trust tax, which has caused the loss of $35 billion in Canadians savings and treats RRSPs at a significant disadvantage to Pension Plans. Harper destroyed the only prudent investment vehicle that existed for the 75% of Canadians without pensions that allowed them to generate decent retirement income. Meanwhile Harper carved out an exception for pension plans from his draconian 31.5% tax. How is that fair? Meanwhile Harper has bailed out these incompetent pension funds from their ABCP exposure.

The Liberals need to demonstrate that they are serious about their stated concerns about “pension and savings” by demanding that Harper repeal the income trust tax. Doing so will also preserves Canada’s tax base which has taken a $1.2 billion a year hit from the takeovers of income trusts under tax avoidance structures and non tax paying entities

Liberals to hear economic ideas during 'listening' tour

Juliet O'Neill, Canwest News Service
January 7, 2009 1:01 PM

Liberal Leader Michael Ignatieff and two MPs are setting out on a 'listening' tour to hear views on economic policy from a number of Canadian cities.

OTTAWA — After a quiet month since he was acclaimed Liberal leader, Michael Ignatieff and two MPs who specialize in economic policy plan a "listening" tour, starting in Halifax Thursday and Friday, to tune into local business and community views on the economy.

The tour over several weeks will include town hall meetings and other events in Vancouver, Calgary, Toronto and Montreal. Nova Scotia MP Scott Brison said he and Toronto MP John McCallum will travel with Ignatieff, who was chosen by the Liberal caucus to replace Stephane Dion after rival leadership candidates stepped aside.

"At a time when Canadians are worried about their jobs, their pensions, and their savings, Michael and the Liberal party are committed to holding a national conversation about Canada's economy," the Liberals said in a release. Brison said the Liberals have a number of economic policy commitments and are open to new ideas.

In an interview, he also said the Liberals stand by "the principles" of the economic policy in the coalition accord agreed with the New Democratic Party and supported by the Bloc Quebecois in late fall. Key to the accord was a call for stimulating the economy and providing extra support for the unemployed and retired persons.

The tour will go beyond the Jan. 26th resumption of Parliament and the federal budget the following day. The opposition parties united in a threat to defeat Prime Minister Stephen Harper's minority Conservative government several weeks ago and asserted they could form an alternative government. Harper avoided defeat by persuading the Governor General to suspend Parliament. The budget is the next opportunity to defeat the government.

"The coalition proposed investing in people, in training and income support and infrastructure," Brison said. "All of those principles continue to be important. In broad strokes, all the opposition parties showed in the coalition accord that we actually understood the need to invest in people and infrastructure and provide meaningful stimulus. The only people who didn't get it in November were the Conservatives."

He also said some of the policies from the Liberals' election campaign platform are still appropriate although he would not want to suggest all will be adopted under Ignatieff, who has already distanced himself from Dion's green shift proposal for a carbon tax and redistribution of revenues through tax cuts.

"The economic situation has clearly worsened but there are some strong existing policies in our arsenal that make even more sense today," Brison said. "In the current economy they can provide real stimulus and they would help strengthen productivity and competitiveness as we move into a period of recovery in the future."

Examples he cited were grants to make homes more energy efficient, a move that would support the construction industry and help Canadians reduce energy costs and greenhouse gas emissions. Another proposal was for "green bonds" which would provide a fixed investment vehicle and a pool of capital for municipalities to tap for environmentally-friendly infrastructure projects.

The coalition accord proposed stimulating the economy by an unspecified amount by accelerating infrastructure spending, housing construction and retrofitting and investing in the manufacturing, forestry and auto sectors. It advocated skills training measures, eliminating of the two-week waiting period for employment insurance recipients, and measures to protect pensions and to lower withdrawal requirements from registered retirement income funds.
© Copyright (c) Canwest News Service


Dr Mike said...

I certainly am glad to hear that this tour is taking place.

They state that they want to make sure that Canadians have secure incomes & pensions.

For retired persons & those who are just hoping to supplement their incomes , one of the best ways to accomplish both is to reinstate income trusts to their pre-Halloween 2006 status--this was perhaps the best financial vehicle of it`s kind to offer excellent levels of income & stability for those devoid of a private pension plan.

Not to mention the fact that a reinstatement would enhance public tax coffers & help protect the economy from a further deepening recession.

My suggestion to Michael Ignatieff is reverse the trust decision--Canada will thank you for it.

Dr Mike Popovich.

Anonymous said...

The income trust debacle is a legbone connected to a backbone connected to a headbone.

The income trust debacle needs to be considered in the context of a web of falsehoods told by so-called experts, policies which have damaged the investment climate in Canada, future harm to the governments of Canada, and past and future losses of individual Canadians (most of whom are seniors). The $35 billion of losses inflicted on individual investors in late 2006 is the most obvious symptom of some bone disease.

As citizens, we need to know, and perhaps some day we will know, why the Department of Finance used false data to enact tax law.

For 2007-08, the impending trust law has had a deleterious effect on capital formation in Canada. Except for bank preferred shares, new issues on the TSX have been slim to none. Thus publicly traded businesses have been, and will continue to be, forced to rely on internal earnings and bank debt.

Another connection is that the 2007 Budget facilitates foreign take-overs of Canadian businesses even as it interferes with Canadians investing in Canada, and even as it impedes Canadian corporations investing abroad. The future tax revenue effects are toxic. More wealth will leave Canada sans tax, and less wealth will be retained and/or repatriated to Canadians resident in Canada; with the result that federal and provincial government tax revenues will be reduced.

Another connection is that future tax revenue from Canadian seniors will be reduced.

All of this requires some heavy-duty economic analysis--which brings us back to the first connection. The Department of Finance has failed to properly advise Parliament of the economic effects of the recent anti-Canadian changes to the Income Tax Act. The headbone has a cancer.

I trust the Liberals are listening.

Louis M

Dr Mike said...


This is an easy & inexpensive fix---change the law to the pre-Halloween position & let the markets decide.

What would be the downside other than Flaherty & Harper would look like idiots.

I think I can handle that.

Dr Mike.