Jim Leech, C D Howe, hypocrites extraordinaire, don’t speak for 75% of Canadians

Today we have the ultra hypocrites known as Jim Leech and C D Howe weighing in on a Globe Editorial (of all papers!) entitled “Pensions for the pensionless”.

Jim Leech and the C D Howe institute are two of the last who are morally qualified to speak on the matter of the 75% of Canadians who are without workplace pensions and what Jim Leech now admits will “create a broader economic drag, as a growing portion of the population becomes unable to contribute meaningfully to growth.”

Well, the 75% of Canadians without pensions had already figured out a prudent way to provide income during retirement, and that was through investments in businesses that apid out their excess earnings by way of an income trust. That was until Flaherty came along to destroy that option for retirement, and double taxed income trusts at the rate of 62%, and into oblivion.

Both Jim Leech and the C D Howe applauded Jim Flaherty’s income trust tax. Why? Because in the case of Jim Leech this policy provided the pension funds with a material advantage in the ownership of income trusts by pension plans versus RRSPs. Pension plans like Teachers’ were handed the opportunity to opportunistically and predatorily acquire these devalued trusts and own them privately and NOT PAY the 31.5% tax. That’s precisely why the PSP bought Thunder Energy Trust and OMERs bought Golf Town Income Trust and Teranet Income Trust, etc. etc.

Meanwhile the C D Howe merely represents the interests of the corporate managers who fund the C D Howe and who want to preserve the abuses that are inherent in the corporate model versus the non-abuses that are inherent in the income trust model.

The inherent abuses that are inherent in the corporate model that are not present in the income trust model are why the marketplace assigns a premium value to a business under a trust versus a corporation. End of story. This created a pressure to convert, which meant goodbye to big personal pay checks for the managers. Hence the managers went to Ottawa to sabotage this alternative for their owners. Well done C D Howe. Meanwhile Jim Leech of Teachers, under Goodale was screaming bloody murder when the pension plans were going to be discriminated against, but are the first one’s to applaud the execution when the average Canadian via their RRSP is the one to be discriminate against.

As such, both Jim Leech and C D Howe have disqualified themselves from commenting on this matter, as both have proved themselves to be the enemy of the 75% of Canadians without pensions. Meanwhile the market had already evolved in a way that addressed this fundamental need for retirement income on behalf of the 75% of Canadians without pensions. That EVOLUTIONARY response was the emergence of the income trust model that took cash flows from businesses and dispensed them to individuals on a monthly basis, and these people happily paid taxes at average rates of 38%, resulting in far more tax collection by Ottawa, which is why the Steve Chase story ran in the Globe on October 29, 2006 entitled: “Tax cash floods in, leaving experts at a loss” and due to the timing of this article, explains why “There's a mystery bedevilling the Finance Department: Canadians are sending far more personal income tax revenue to Ottawa than expected -- and nobody knows exactly why. “

The reason why no one could explain the surge in taxes, which happened to come from the ownership of income trusts, was because the fix was already in. The 75% of Canadians without pensions were about to get royally screwed. An event that was applauded by these two hypocrites extraordinaire: Jim Leech and C D Howe. Neither of whom speak for the 75% of Canadians without pensions. Neither of whom have any sense of fairness when it comes to public policy that was designed to screw the very people they are now feigning concern for, and who they summarily led to the gallows, a few short two and half years ago.


Pensions for the pensionless
Editorial
Globe and Mail,
May. 25, 2009