Thursday, June 11, 2009

Tax breaks key to Canadian retirement plans: poll

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Today we learn that half of Canadians polled think that tax breaks are key to Canadian retirement plans. Meanwhile we have Stephen Harper killing the most popular retirement savings investment vehicle that emerged in Canada, namely income trusts, by DOUBLE taxing them at combined rates equal to 62%.

Why is the SECOND tax at the rate of 31.5% required?

Simply because Harper’s BOGUS tax leakage analysis disregards the FIRST 38% average rate of taxation that Canadians pay on the (as it happens) 38% of income trusts held in RRSPs. To disregard these taxes serves to completely defile the purpose and intent of why RRSPs were created. Canadians don’t need tax breaks to achieve their retirement goals, they simply require the incompetent Harper government and crooks in the Departmnent of Finance to acknowledge the TAXES that they DO PAY on their RRSPs.

Can I make the point any clearer or more obvious about the GROSS INJUSTICE of the income trust tax that that?

Meanwhile Pension Funds are able to exempt themselves from the 31.5% income trust tax. Why are the Liberals not making these points to Canadians about Harper’s retirement savings rip off?

Tax breaks key to Canadian retirement plans: poll
'Era of greater personal responsibility' has arrived

By Shannon Proudfoot,
Canwest News Service
June 11, 2009

Almost half of Canadians think the best way the government can support aging people planning for their retirement is to give them tax breaks and to allow them to look after themselves.

HSBC Insurance, the company behind the Future of Retirement report released Wednesday, declares that an "era of greater personal responsibility" has arrived.

"They realize there's nobody around offering a hand," says Susan Eng, vice-president of advocacy for CARP, a group representing older Canadians. "Some people are going to throw themselves in front of a streetcar, but most people in our generation are saying, 'OK, we're going to have to do something about that'."

The survey included 15,000 respondents aged 30 to 70 from 15 countries, including Canada, the U.S., Britain, France and China.

Forty-eight per cent of Canadians said the best way for the government to support financing an aging population is to encourage more private savings through tax relief on savings. That was significantly higher than the 31 per cent of international respondents who endorsed the idea.

Financial experts say possibly the only silver lining to the recession is that it's spooked people into paying attention to their non-existent retirement plans, building up savings and watching credit.

Robert Abboud, a certified financial planner in Ottawa, recently has noticed his clients being much more interested in knowing their rates of return and in coming in for regular reviews. He's even seeing the children of clients coming in to draw up a financial plan as soon as they land their first full-time job, he says -- which is exactly what financial planners recommend, but most people don't bother to do.

"If there is that mind-shift where people will start taking responsibility for retirement, it could be the best thing that ever would have come of the recession," he says.

Taylor Train, chief operating officer of Advocis, the Financial Advisors Association of Canada, says he's been warning about boomers' lack of retirement planning for a decade. He believes the downturn will turn around as quickly as it came on, but says people have realized the Canada Pension Plan isn't enough to rely on and they have to develop some financial literacy.

"It's really interesting how long it takes for the public to realize it's on the cusp of the abyss," he says.

Eng at CARP says the downturn has had a profoundly destabilizing effect, pushing even people in their 30s and 40s to contemplate their retirement finances.

Months of grim news reports have acquainted ordinary people with the intricate details of "so-called gold-plated pension plans" and the fact that "too big to fail" companies, such as the automakers are more than capable of doing so, she says.

"People start saying, 'Hold on a minute, I don't even have a pension plan'," she says. "And the people who do have a few dollars saved have watched it disappear."

Doug Mitchell, 61, took charge of his own retirement savings in 1991 when he left an oil company to start his own consulting business, withdrew his pension funds in a lump sum and put it in a Locked-In Retirement Account (LIRA). He's deeply frustrated that his money is now subject to restrictions to which a typical pension isn't, because he retired before turning 65, but he and his wife managed to make their "dream of Freedom 55" a reality a few years ago.

The Toronto-area couple has travelled through Europe, wintered in Florida and has visited a grandson in Calgary, but Mitchell says the downturn has still squeezed their well-laid-out financial plans.

"You go to school for 20 or 25 years to get an education to work hard and earn money and save money," he says. "You work hard for 30 or 35 years, and I want to spend the next 30 years spending it."

© Copyright (c) The Ottawa Citizen


Dr Mike said...

Yesterday in the HoC I watched the debate on pension reform that was a move by the New Democrats to ensure a stable income for retirees that would enable them to have some quality of life in their remaining years.

The NDP do realize that CPP , if you qualify , Old Age Security & Supplements are not enough.

Bravo for them.

Just one more thing they need to do & that is revisit the Income trust matter.

This made in Canada product was in fact giving many seniors the quality of life that this party espouses to & it was heartlessly snatched-away because of a lack of knowledge & a rush to judgement.

Will the NDP be brave enough to take another look & do what is right??

Will it be the NDP who will leave the Liberals with egg on their face.

Just maybe & if they do , then good for them.

Dr Mike Popovich

Kephalos said...

My advice to any young fella doing an RSP is: Don't.

Harper has double-taxed income trusts inside RSPs because he wants to strangle Canadians investing in Canadian businesses and income trusts were the engine of Canadian business growth.

But all that goes to national policy for the economy and government finances. What about the individual citizen?

When you invest in an RSP you let the Goal Suck Gov and his little buddy Broker move into your basement. You pay the bills and they live for free on your tab.

When you invest in an RSP, you lose the tax breaks of dividend tax credits, capital gains exemptions, and the ability to leverage. Meanwhile the buddy Broker lends out your excess cash, and charges fees every time you want to withdraw your own money.

Listen young fella. The RSP is a sucker investment. Make your retirement investments by yourself, for yourself and controlled only by yourself.

We now know that we cannot trust our Canadian Government; so do not trust our Canadian Government. Trust only in yourself.

Anonymous said...

Shouldn't CARPS prime objective be to offer a hand to retired people!, What exactly does CARP do??

They realize there's nobody around offering a hand," says Susan Eng, vice-president of advocacy for CARP, a group representing older Canadians. "Some people are going to throw themselves in front of a streetcar, but most people in our generation are saying, 'OK, we're going to have to do something about that'."


CAITI said...


CARP is actually in the business of selling advertising space to readers who sign up on the pretense that CARP is advocacy group, rather than a an advertising group.

Meanwhile, CARP’s advocacy consists pretty much of pushing seniors under the wheels of passing street cars, as they did in the income trust matter.


Bruce Benson said...

If anyone thinks the NDP will change their view of Income Trusts, read my correspondence the NDP's office of Joe Comartin shown below.

Thanks for expressing yet again your opinion concerning income trusts.

We have no interest in participating in this blatantly partisan exercise any further. Further comments are best directed to the Liberal “Saints”, as you described them, who are happy to entertain your curious but insistent version of events.
Please be assured that your last, closing sentiment is mutual.


From: Bruce Benson
Sent: May 28, 2009 12:53 PM
To: Comartin, Joe - M.P.
Subject: Re: Dunce cap? No that¹s still firmly on the head of the NDP

Dear Sir:

My objections do not amount to “an individual point of tax policy” but rather to the proper functioning of an open, transparent and accountable government. What proof of tax leakage did the NDP base their support of the income trust tax on, given that the concept of “tax leakage” is an infinitely provable concept.....assuming it even exists? For without the NDP’s support this highly destructive tax policy would never have been passed and Canadians would not have lost $35 billion of their personal pension life savings and there would not have been the wholesale takeover of $100 billion in Canadian companies causing the loss of $1 billion in annual taxes, soon rising to $7.5 billion when all the trusts are gone ..... to solve an alleged problem that was only $500 million (actually more like zero).

Rather than complaining about my emails, perhaps your time would be better spent answering this fundamental question: What is the NDP’s proof of tax leakage as the basis for its support of this sweeping tax legislation they voted into law?

As for the tone of my email, the use of the “derogatory” comment of “dunce cap” originated from the Deputy Leader of the NDP. Tomas Mulcair. Perhaps you should ask Mulcair to clean up his act and show greater respect for Jim Flaherty, the NDP’s cohort on the income trust tax legislation. Oh and by the way, does any of this information get past your screening to the MP Joe Comartin? What is wrong with you guys? How come you can't see just how damaging this whole Income Trust policy is. There is more than enough information out there proving Flaherty and Harper et al are nothing but a bunch of liars. You are a part of one of the biggest frauds and rip offs in history and you profess to be working for the little guy and for seniors of this country. Truly a joke.

Bruce Benson

Space being limited, Comartin wanted me to take him off my email list.

Anonymous said...

I have a question I know you cant answer but why are they interviewing the CARP rep..
They have shown they are the most useless bunch. Where were they 2 years ago?

Have they suddenly realized what is going on but still don't know what caused it?
Maybe she knows but is too polite to stir up a contoversy .
Just in case they missed this I am sending it to all the MPs
Hope I'm not on a spam list.

Keep up the good work


Kephalos said...

Mr. Benson,
Not to forget that the NDP have dirty hands on this file. Judy What's Her Leis played a key part in the fraudulent RCMP "sting" on Goodale, and she was the NDP Finance Committee rep who "assured" her leader that she knew the file numbers. When she finally got an inkling that she had been duped, she turned the file over to Wet-Dreams Martin. So make that dirty sticky hands.

Anonymous said...

When I sent my detailed  Retirement Savings Support Plan (ten months ago) to a collection of MPs and Senators I did not even get the courtesy of a response or even an acknowledgemnt, except from Senator Carstairs.

Now they are all crying in the beer about the bleak future of retirement savings ..................................and still managing to do absolutely nothing about it ..................not even removing the totally unfair and unjustified full double taxation in RRSP/RRIF. 

Maybe as a first step they should stop robbing the old folks!


Dr Mike said...


I once asked a high profile Liberal at one of his town hall meetings about this double taxation & why nothing has been done about it so far.

I got a shrug & "it`s a complicated problem" & then the subject was changed.

If this is the best we can expect , then nothing will ever be done to correct this inequity.

They treat RRSPs as something of a hunting grounds for a quickie cash grab.

And here I thought this was supposed to be a mechanism for retirement savings that would keep us off of the gov`t dole.

Silly me , what a naive twit.

Dr Mike

Bruce Benson said...


None of the bastard MP's give a tinkers shit about the old folks and their pensions. Why should they care when they have managed to fatten up their MP Pensions at our expense? We know who they are looking after and that is themselves. Just for starters the sexy Lisa Raitt comes to mind.