Hill Times: Which Opposition Leader will rise to Obama's empirical standard?

Who will employ mindset of Obama’s empirical president to Harper’s imperial prime minister?
Fact-based decision-making is the litmus test for real leadership in this, the internet age.

By Brent Fullard
Hill Times
May 11, 2009

WHITBY, ONT.—Barack Obama’s first act, upon inauguration, was to sign an executive order imposing on his own administration an entirely new, open form of transparent and accountable government.

At the same time, Obama declared that he wanted to be known as the “empirical president,” meaning he would base all his policies on the universe of known facts concerning the matters at hand, and allow decisions to flow from facts, as opposed to dogma, hidden agendas, or ulterior motives.

Contrast this to Harper’s imperial manner of governing in general and his handling of the income trust matter in particular.

Harper proclaimed far and wide during the 2006 election that: “You know where the Liberals stand on raiding senior nest eggs, whether it is death taxes or taxing income trusts, a new Conservative government will never let this happen.”

That promise garnered Harper hundreds of thousands of votes from the 75 per cent of Canadians without pensions, who are most affected whether this essential investment choice is preserved or not.

Unfortunately, Harper’s solemn promise, upon which many Canadians acted, had a shelf life of nine months.

Once in power, Harper became the focal point for many people’s commercial self-interests and those with privileged access, whose aim was to eliminate income trusts, as revealed in The Globe and Mail on Nov. 2, 2006:

“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.”

Let’s evaluate the inherent conflicts of interest associated with this one-sided lobbying, which took place following the Telus and BCE trust conversion announcements.

The role of “high-profile directors and CEOs” is one of a fiduciary duty to shareholders, the true owners of businesses. Therefore, lobbying Ottawa to preclude an option (income trusts) favoured by their owners, as evidenced by the words “pressed into trusts because of their duty to maximize shareholder value,” is a form value,” is a form of economic sabotage.

The Supreme Court of Canada ruling on the LBO of BCE, reaffirmed that the fiduciary duty of corporate directors and CEOs is to maximize shareholder value, even if doing so has adverse consequences for other stakeholders, as with BCE’s bondholders.

Meanwhile, it should have been apparent to Harper, the trained economist, that Power Corp. had a vested interest in shutting down income trusts for two obvious reasons.

First, income trusts emerged as a formidable competitor for investors seeking income, causing the sale of life annuities to suffer. Given that Power controls two life insurers, London Life and Great West Life, there were obvious benefits to be derived
from income trusts’ legislated demise, as lobbied for.

Second, Power often acquires companies to expand its empire. Income trusts place restrictions on acquisitions, requiring that they be “accretive” to unit holders’ distributions. As a trust, Power would have been precluded from acquiring Putnam Investments in December 2006, since doing so was “non-accretive.” Ironically, had this “trust discipline’ been imposed, Power would not have found itself writing off $983-million of its investment in Putnam
on March 11, 2009.

Harper was obviously swayed by this self interested lobbying, and unlike Ralph Goodale, Finance Minister Jim Flaherty did not engage in any public consultation whatsoever, but acted imperially.

The argument employed by Harper to justify his policy reversal, causing the loss of $35-billion in Canadians’ life savings, was the canard that “income trusts cause tax leakage,” the imperial “proof” of which took the form of 18 pages of blacked out
documents.

In November 2006, Harper told Canadians they should accept their fate without questioning the veracity of tax leakage, invoking the platitude “Canadians must trust.” Meanwhile, we know that tax leakage is a manufactured construct that lacks
veracity, as concluded by HLB Decision Economics, BMO, RBC and PwC.

So. Here we have the imperial Harper asking Canadians to accept the central policy premise for his policy reversal, on utter blind faith, under circumstances where the
empirical facts are readily available.

The central lie of tax leakage needs to be exposed by the opposition parties now, in order to restore good governance and due process to Parliament and ensure that Canada’s democracy works, consistent with Canadians’ values.

Which leader will champion the mindset of Obama’s empirical president in opposing Harper’s imperial prime minister and exposing tax leakage for the fiction it truly is?

That answer will define those leaders who act in the best interests of all Canadians, by revealing the empirical realities of this policy.

Or alternatively define leaders, like Harper, a willing hostage to the narrow self-interests and “gaming” of Canada’s corporate managers, whose arsenal includes the media, selective in their abidance with
matters empirical.

However, that’s not the way true leaders like Obama run a democracy in this, the resolute internet age.

Brent Fullard is President of the Canadian
Association of Income Trust Investors.
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