Tuesday, February 3, 2009

The latest hogwash from BNN

Trust yourself?
Posted by Michael Kane on February 3, 2009

I recently asked viewers to send in blog topic ideas and one citizen of Business News Nation said he wanted to know my opinion on income trusts.

That got me thinking about the so-called Halloween Surprise – Oct. 31, 2006 – when federal Finance Minister Jim Flaherty revealed a stunning reversal of government policy by announcing income trusts would be taxed just like ordinary corporations.

Until that point, investors had been pouring money into trusts, which were expected to receive special tax treatment and distribute most of their earnings to unitholders.

But what frightened the government was the prospect of some huge Canadian corporations – huge tax-paying corporations – converting to trust status to avoid paying those taxes. It was the intent of BCE Incorporated to convert into an income trust, an event that would have been a disaster for the government. BCE pays enormous corporate taxes and Ottawa did not want to lose that revenue stream.

OK, that's the history.

Here's what I wonder: suppose the government had not reversed its policy. Suppose it had yielded to the cries of investors who felt they'd been duped. Suppose the government had decided to be fair and stick to a policy that would have seen the loss of billions in tax revenues.

Then the global banking community freezes and shatters.

We all hear the gnashing of teeth over Ottawa's plans to run a deficit, a necessary situation for us now. But imagine the jackpot we'd be in if Canada's largest tax-paying companies had been allowed to avoid most of those taxes.

The hole would be much deeper… the muskeg much stickier.

A lot of people lost a lot of money when the income trust sector sold off following Oct. 31, 2006, and the way it happened is regrettable.

But, without the Halloween Surprise back then, we could very well be living a nightmare now.

If you have a comment on this or any other blog, please write to us at blogcomments@BNN.ca
We may print your comment and reserve the right to edit.

One such (unedited) dissenting comment is
here, or here, or here, or here, or here.


Anonymous said...

B.C.E. has not , had not paid taxes for years , writing off losses
like $12 billion Teleglobe mistake, as a trust distributing income to folks who then pay taxes on it, revcan would have seen over $800
million a year in their tax coffers from B.C.E. as a trust, the failed
takeover of B.C.E. by Teachers and their rich private equity friends is a blessing as no income taxes would ever come from that entity ever again.

Huge tax paying corporations that would have converted to trusts would be huge income generating machines that would result in huge income taxes paid to the government.

What the hell is muskeg any way , its probably the lost forever taxes that all the income trusts
that were taken over by private equity would have paid via their unit holders.


Dr Mike said...

BNN---the Butt Kissers & Nitwits Network.

Where do these clowns come up with this stuff.

This guy has to be a conservative hack looking for an eventual senate posting like his bud the Duff.

A typical non-factual piece by a guy who failed to do adequate research before shooting from the lip.

No wonder I quit watching that network.

What a jerk-head.

Dr Mike Popovich.

Anonymous said...

I find it hard to believe that the lies and distortions regarding "tax losses" from Income Trusts still survive in the blog of a supposedly financially astute reporter.

How many times does it have to be proven that Income Trusts, rather than costing the taxpayer money, actually increased government tax revenues?

There was a problem with the diversion - not loss - of provincial tax revenues from the province where the entity is based to the province where the investor resides, but that could have been sorted out.

Any reasonable person would realize that that since personal tax rates, especially those of the average investor, are substantially higher than rates paid by corporations (often less than 10%), the money flowing from Income Trusts into the hands of tax paying Canadians would provide more total tax revenue than if it were left in corporate coffers.

I dream of the day when Canada's financial press will begin to employ reporters willing to dig out the facts, rather than simply regurgitate the lies and distortions spewed out by an incompetent Minister of Finance and a promise breaking Prime Minister.


Anonymous said...

Huh? Are you kidding with this Brent? This can’t be for real! When exactly did BCE ever pay huge cash taxes? Doesn’t anyone know how to read a set of financial statements (Hint: look at the tax notes!). Then shortly after the gov’t kiboshed the trust conversion, BCE announced that due to “restructuring of its subsidiaries” it would not be cash taxable until at least 2010. And that was when they were making some money. How much in cash taxes is BCE going to pay to the government this year? How much Canadian tax revenue would have been collected under the foreign-financed LBO structure? (Hint: none) Honestly, where do they find these people to come up with this stuff? Can you get away with not actually taking a University-level business/tax/finance course or program and still become a “business” commentator in Canada. Don’t they have even minimum requirements for educational proficiency? It’s kind of pathetic…


Anonymous said...

Michael, please send me your drugdealers ph#

Bruce Benson said...

Michael Kane

Wow, you have shown just how inept you really are. And you call yourself a financial journalist or reporter. What a laugh. I have never read so much dribble with the exception being from Flaherty & Harper. Where is your proof? You have not done one iota of investigative journalism. All you did was spread the same lies as Harper & Flaherty. You need to be taken to the back wood shed and then your red ass fired from BNN. You truly did BNN a disservice, your ignorance and laziness is beyond reason. In fact you are not alone. BNN is so biased I am surprised they are still in business. BNN and it's staff are producing an inferior product and will go the way of the Globe and Mail, right into bankruptcy. Smarten up, what a disgraceful bit of journalism. I see others have enlightened you with the truth and the facts. It's time for you to drop your infantile mindset and do some responsible journalism for a change. I can't take anymore more of the crap. What you produced was totally untrue.

Anonymous said...

Always important to keep up to date with the other side ... no matter how uninformed or biased the opinion might be.

Hmm Mr. Kane and his background ...

After going to this link the answers to our questions are there. Someone on this forum asked What is Mr. Kane smoking? He works for CAN WEST, a right wing media co. so it would be more accurate to question what kind of prescription drugs he is on at any given time ... Or what environmental substance has effected his brain to promulgate such crap?

What are Mr. Kane's actual qualifications in the financial sector ...
Read this loser's bio and you will notice NONE. The guy has no financial background whatsoever. No journalism degree or college diploma of any kind is mentioned. If he does have one, most likely it comes from a third rate institution of some kind. The locations where he received his experience - all remote areas. Prince George B.C. - known to locals in B.C. as "The PIG". When Mr. Kane was working in Guelph, it was not the cool vibrant place it is now. And Chatham ... nothing to brag about there for professional accomplishments.

Right wing media companies generally don't value education or care about reporting actual facts. Their business models depend on uneducated members of the population and prohibitionists. Thank you Mr. Kane for so beautifully illustrating my points about the problems with using right wing media companies for facts or educational purposes.
If these judgements towards Mr. Kane sound harsh - he can go re-write this article using actual facts and research. He can also re-write his bio and clarify where his education in journalism comes from.

Dr Mike said...

I second that last comment!!

Michael Kane , put up or shut up.

Dr Mike.

Anonymous said...

Dear Mr Kane,

I'm astounded that you were ever hired by BNN, or even allowed to express an opinion.
It's obvious that BNN either did not check your resume, or else you falsely stated your level of intelligence,
or lack of ethics, or qualifications or all three.
I do not know who is at most to blame - You or BNN for allowing your drivel to pass as journalism in the first place.
You have done yourself, BNN and it's viewers, and in fact all Canadians a great disservice.
Instead of thoroughly researching the Halloween Income trusts matter thoroughly, and without ever visiting http://www.caiti.info/resources/presubmission.pdf
or even searching Google, you pronounce a pack of lies, then I assume wait to get paid.
Shame on you and BNN.
All of you involved with this matter should be dismissed, if not only for your slothfulness then for your dishonesty.
Lastly, How crass and deceitful of BNN to publish some "responses" on Viewer response, claiming:-
"here are three that are representative"... even more evidence that BNN is rotten to the core and cannot even truthfully
describe the real anger and disgust at your lack of ethics, but instead falsely characterize their carefully selected
"responses" as being representative.
Why not publish Yves Fortin's comments below, or better yet
why not have Yves Fortin and Brent Fullard appear on BNN, along with Flaherty?
Want to bet Flaherty refuses to appear?
Want to bet BNN never invites Fortinr and or Fullard to correct it's yellow dog Journalism?

outraged Senior Citizen,