Tuesday, April 28, 2009

Ignatieff's "Canadians deserve the truth" versus Harper's "Canadians must trust".

I have written extensively in the past how Stephen Harper’s letter of justification for his income trust tax double-crossing double-taxing betrayal was centered around the phrase used in his form email response of “Canadians must trust”. What an absurd proposition to ask of the electorate vis-à-vis their paid elected representatives, at the best of times, but how much more insanely absurd coming from someone who just broke his promise?

No doubt, the same line of reasoning was used by Rev. Jimmy Jones a as he fed Kool-aid to his masses with the chant of Canadians must trust. See here

Harper’s doctrine of “Canadians must trust” is why we have 18 pages of blacked out documents to support the loss of $35 billion of Canadians’ life savings and the justification for losing investment CHOICE.

Meanwhile, in a parallel universe we have the Auditor General saying; “Parliamentarians need objective fact-based information on how well the government raises its funds (taxes)”, and yet still no proof of tax leakage?

We also have the Finance Committee in a parallel universe writing as their number one recommendation that: “It is imperative that a democratic government be as transparent as possible when levying a new tax so that it can be held to account by its citizens. The Committee, therefore, recommends that the federal government release the data and methodology it used to estimate the amount of federal tax revenue loss caused by the income trust sector.” and yet this measure was passed by the Liberal controlled Senate and still no proof of tax leakage?

And finally we have the new Liberal Leader Michael Ignatieff saying that Harper’s income trust policy was an act of “VANDALISM” and that it was based on a “FALLACIOUS” analysis. All that is well and good, however it has to actually manifest itself in tangible terms, for Michael Ignatieff to announce his leadership by stating that “Canadians deserve the truth”?

It is becoming increasingly difficult to reconcile that rhetoric with the fact that Canadians have received NOTHING in the way of truth about alleged tax leakage and for us to observe on a daily basis the Liberals doing nothing about getting the truth about tax leakage. We need results. Only from results can we achieve inspiration. Words are useless, without clear action and conviction of purpose, otherwise this is just another exercise in Harper’s “Canadians must trust”.

To which my response was contained in my April 7, 2009 Op Ed in Sun newspapers across the country...........No income, no trust


Dr Mike said...

"Politics, it seems to me, for years, or all too long, has been concerned with right or left instead of right or wrong". ~Richard Armour

Maybe I should send a copy to all MPs from ever party.

Dr Mike.

Kephalos said...

I post a diatribe posted by DeWolf Shaw on Diane's blog this morn. His blurb shows where the Flaherty defenders want to dig-in.

"email from DeWolf Shaw in Montreal

This is one file where we disagree.

By giving an incentive to payout cash flow in highly capital intensive industries, oil and gas and mining being the most, Canadian natural resource companies' balance sheets were drained. Only with rising commodity prices did the unit holder think he was gaining. Meanwhile - remember oil has no borders no other jurisdiction had this feature, so it created an unlevel playing field. The oil industry plows back 100% of its free cash flow back into E & P , refineries or buy backs all of which case EPS , CFPS growth.

By paying out 100% of free cash flow, Canadian oil companies , each year, became less and less competitive on the global stage. We were historically always the leaders in the new global plays. Remember Ranger (Ninian field) , Sunningdale,(United Canso(Thistle) in the North Sea, Canada North West Land (offshore Spain Colombo field North Sea, PetroCan the East Coast offshore, PanCanadian (Cohasset Panuke, Sable Island) Dome in the Beaufort and Panarctic in Arctic Islands; Home Oil (Prudhoe Bay) PetroCan Ranger (South China Sea first lease with BP 1983) Ranger Home (Australia - Blina) : Chieftain -Gulf Coast .

NONE of that would have happened if these mid cap players had been trusts.

Now there are virtually no Canadian mid caps on the global stage, the offshore of Africa, Brazil, Deep North Sea, Gulf Coast next Iraq. The only exceptions are non trust players like Niko in India The names that stayed out of trusts have been able to consolidate so that the top 7companies have 90% of the cash flow and spend 95% of the $ on E & P, while more and more med sized names became trusts, destined never to become the organic growers that build assets and growth like in the past -- which was the reputation of and fame of the Canadian oil industry.

The Dirty Big Secret is that the trusts made Bay Street rich and only happened because interest rates were so low, high yield products were needed ; the outcome was $1.5 billion in commissions and fees to Bay Street brokers lawyers and CAs, with, low risk caretaker CEO's -- many who were accountants and not even E & P guys as the managers of trusts who to sat back, with no risk capital at work , just milking huge salaries, on assets which were really only pay back on capital to "investors" in need of low taxed high yield products.- the rise from $50 -147 oil made it all look so easy, but the fact is that in trusts we set up a weak low risk E & P sector except for 5 or 6 big players which stayed away from the ruse, and which can now squeeze out the intermediates.

The end of trusts came just in time for oil and gas. Income Trusts should only be reserved for high cash flow, low cap reinvestment businesses like Yellow Pages."


One simple question cuts thru this noise: from whom and when did the energy trusts acquire their core assets?

In the 1990s the big oil companies bailed out of much of their conventional production in Canada. They sold their "non-core assets" to the trusts, and moved on to other countries.

Now they want Canada back... go figure.

Anonymous said...


I posted this:

Who is this DeWolf Shaw in clown's clothing?

He knows not of what he speaks.

To wit:

Manulife and Power Corp.: Hoisted on their own petard


This is as much about democracy as it is about capital markets ..... in fact more so.

What nonsense arguments does DeWolf Shaw want to put up to attack this quaint concept of our Paid Elected Members of Parliament who sit on the Finance Committee:

It is imperative that a democratic government be as transparent
as possible when levying a new tax so that it can be held to
account by its citizens. The Committee, therefore, recommends
that the federal government release the data and methodology it
used to estimate the amount of federal tax revenue loss caused
by the income trust sector.

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