Thursday, September 24, 2009

A reader asks: "Andy Willis: Are you out of your mind?"

Below is a reader’s response that I was copied on to Andy Willis’ comment in the Globe today that: “Courtesy of Nortel Networks, Liberal Leader Michael Ignatieff is beginning to forge an industrial policy that stands in stark contrast to the Conservative's hands-off approach to business.

The reader writes:

Andrew, in the Globe this morning you describe a government that through the double taxation of Income Trusts caused investor losses in excess of $35bn, triggered a tidal wave of foreign takeovers of Income Trusts, a change in ownership that threatens both the Canadian tax base and our security in energy and raw materials, and is forcing trusts to go through an expensive, time consuming conversion back to corporations, as having a "hands off approach to business"? Are you out of your mind!? Harper is the most duplicitous, conniving idealogue we've ever had as PM. I guess he controls the Globe too.



McCartney/Lennon on the absurdity of HST

When you think of the Beatles, you think of Great Britain in the sixties. When you think of Great Britain in the early sixties you think of bloated/wasteful government and rapacious levels of taxation. No doubt this motivated McCartney/Lennon to write their song of protest called The Taxman.

The lyrics are quite telling and disturbingly prescient, as they spoof about what government may next find an opportunity to tax, and read:

(if you drive a car, car;) - I’ll tax the street;
(if you try to sit, sit;) - I’ll tax your seat;
(if you get too cold, cold;) - I’ll tax the heat;
(if you take a walk, walk;) - I'll tax your feet.

Well folks, welcome to overtaxed Britain of the early sixties, as we who live in the harsh Ontario climate are being faced with the absurdity only joked about by the Beatles of “if you get too cold, I’ll tax the heat”.

That’s a concept plagiarised directly by Dalton McGuinty’s into his song book on the HST......except his version reads: “When you get too cold - I’ll WILL tax your heat.”

Overtaking of consumers and their basic necessities of life (heat?), is exactly what Dalton McGuinty at the behest of Stephen Harper and Jim Flaherty thinks is the right prescription for all that ails Ontario.

Is Dalton McGuinty so utterly naïve and misinformed about the real world as to not realize the effect this absurd HST tax will have on the blackmarket? Perhaps he might want to have a look at what percent of cigarettes are sold illegally to avert the tax burden on cigarettes. The market for Illegal cigarettes is only a harbinger of the enormity of the black market that will develop for virtually everything under the sun that McGuity’s HST will apply to, with only limited exceptions.

Dalton MCGuinty’s HST is simply the manifestation of Flaherty’s tirade of a year ago that “Ontario is the last place to invest” in order to cajole the easily cajoled Dalton McGuinty into lowering corporate taxes. So here was are, less that a year later and Dalton McGuinty is lowering corporate taxes and is imposing those lost taxes on the average Ontario resident through bizarre measures like taxing their home heating costs at 13%. Turning a province that few thought was the “last place to invest” into a province that is surely going to become “the last province to consume in and to raise a family and/or retire to.”

The Taxman.....predictions by McCartney/Lennon about McGuinty/Flaherty

One, two, three, four...
One, two, (one, two, three, four!)

Let me tell you how it will be;
There's one for you, nineteen for me.
'Cause I’m the taxman,
Yeah, I’m the taxman.

Should five per cent appear too small,
Be thankful I don't take it all.
'Cause I’m the taxman,
Yeah, I’m the taxman.

(if you drive a car, car;) - I’ll tax the street;
(if you try to sit, sit;) - I’ll tax your seat;
(if you get too cold, cold;) - I’ll tax the heat;
(if you take a walk, walk;) - I'll tax your feet.


'Cause I’m the taxman,
Yeah, I’m the taxman.

Don't ask me what I want it for, (ah-ah, mister Wilson)
If you don't want to pay some more. (ah-ah, mister heath)
'Cause I’m the taxman,
Yeah, I’m the taxman.

Now my advice for those who die, (taxman)
Declare the pennies on your eyes. (taxman)
'Cause I’m the taxman,
Yeah, I’m the taxman.

And you're working for no one but me.


Wednesday, September 23, 2009

What with HST and Income Trust tax: Spectre of poverty stalks seniors

Click on image to enlarge CAITI ad.

Spectre of poverty stalks seniors
Sep 23, 2009
Carol Goar
Toronto Star

No matter how grim the poverty statistics got, there was always one bright spot in the picture. Very few Canadians over the age of 65 were in financial hardship.

Politicians boasted about this social policy achievement at home and abroad. Low-income advocates held it up as proof that governments could lift people out of poverty if they made it a national priority.

Canada's performance was remarkable. Between 1971 and 1995, it cut the rate of poverty among seniors from 36.9 per cent to 2.9 per cent.

What no one – or almost no one – noticed was this success story was starting to unravel.

The Conference Board of Canada delivered the bad news in its latest annual report card on Canada.

"Poverty rates among seniors doubled between 1995 and 2005, which is disconcerting because we take such pride in having conquered seniors' poverty," said Anne Golden, president of the Ottawa-based think-tank. "And when the data for the current time period become available, we can expect this trend to persist."

This revelation came as no surprise to home care workers, church volunteers and organizers of charities such as Meals on Wheels. They knew what was going on.

The New Democratic Party was aware of the slippage, too. Its 36 MPs had noticed a worrisome increase in calls from older constituents facing eviction or cutting back on food and medicine to keep their homes.

The party's pension critic, Wayne Marston (Hamilton East-Stoney Creek), embarked on a cross-country listening tour last spring. He wrapped it up in Edmonton last weekend.

"Seniors feel invisible to their government," he said. "Far too many are just one crisis away from a financial catastrophe."

In June, the NDP introduced a motion in Parliament calling on the government to "expand and increase the Canada Pension Plan, Old Age Security and Guaranteed Income Supplement to ensure all Canadians can count on a dignified retirement."

It passed unanimously. But nothing changed.

Since then, the NDP has made retirement security one of its top priorities. Leader Jack Layton says his party will not keep supporting Stephen Harper's minority government unless there is action on this issue.

Many Canadians don't see what the problem is. The poverty rate for seniors (5.9 per cent) is still much lower than the child poverty rate (15.1 per cent) or the rate for working-age adults (12.2 per cent).

But it is climbing more rapidly than for any other age group at a time when the population is greying.

One of the reasons is that Ottawa now "claws back" old-age security (OAS) benefits from taxpayers with retirement savings. This leaves them vulnerable to market swings.

A second reason is that the cost of electricity and home heating fuel has risen faster than the consumer price index. This means OAS payments and other seniors' benefits don't really keep pace with the cost of living.

A third reason is that the paperwork required to obtain old age security, pension and survivor's benefits has become intimidatingly complex. A significant number of older Canadians either don't apply or don't fill out their forms properly. They are also missing out on tax breaks targeted at seniors.

A final reason is the issue doesn't get much attention. Public opinion hasn't caught up to the facts. Anti-poverty groups focus chiefly on children. Seniors' groups tend to accentuate the needs of middle-to-upper income retirees. Governments don't talk about incipient problems.

The trajectory can still be reversed. The Conference Board has sounded the alarm. The NDP has taken up the cause. People are thinking about pensions.

The time to act is now, before Canada's fine record turns into a national embarrassment.

Harper says his tax policy helped repatriate the Timbit....oh yeah?

Today we learn from the Canadian Press that Harper says his tax policy helped repatriate the Timbit.

What a joke for a professed accomplishment and a complete mischaracterisation of his term in office in terms of Canadian ownership of Canadian enterprise.

Meanwhile Harper’s inane tax policy to double tax income trust has had an enormous negative effect on the ownership of Canadian businesses, and resulted in billions of foreign takeovers which displaced TAXABLE Canadian investors and replaced them with non taxable foreign investors.

Don’t believe me?... then you might believe Deloittes. Google their piece entitled: Income trust buyouts: Lots of activity, little tax revenue

As a Canadian, what would you rather own? Timbits or Prime West Energy Trust that was acquired by Abu Dhabi Energy? Timbits or TransAlta Power Income Fund that was acquired by Hong Kong billionaire Li Ka Shing? Timbits or Union Energy Waterheaters Income Fund that was acquired by Allinda Partners? Timbits or BCE that was almost acquired by US Private Equity who insisted that BCE fire 2500 people in advance of closing, to make it more palatable?

The list goes on and on.

What will Canadians be left owning at the end of the day? Timbits or tidbits? That is the question. What are the Opposition parties doing about it, apart from playing dumb, deaf and mute?

Harper says his tax policy helped repatriate the Timbit

Sep 23, 2009 01:53 PM

OAKVILLE, Ont. – To hear Prime Minister Stephen Harper tell it, his financial policies helped repatriate the Timbit.

Harper met with Tim Hortons executives today after shareholders of the multinational coffee chain voted to reorganize as a Canadian public company.

Parent company Tim Hortons Inc. (TSX: THI) announced in June that it intended to shift its corporate ownership back north of the border, saying it would save on taxes and make international expansion easier.

Following his meeting just west of Toronto in Oakville, Ont., Harper championed his tax policies, saying lower taxes are attracting business to Canada.

Harper says Tim Hortons' decision to return to Canada from the United States shows the government's tax strategy is working.

The iconic purveyor of coffee had been registered in Delaware for nearly 15 years as a result of its purchase by U.S. burger chain Wendy's in the 1990s.

"Tim Hortons' return in the midst of the global recession is a clear signal that Canada is poised to come out of these tough times stronger than ever," Harper said.

"The path we are on will draw home many other Canadian companies and businesses, it will attract highly skilled immigrants here from all over the world."

Tim Hortons, founded in the mid-'60s by Cochrane, Ont.-born hockey legend Tim Horton, became part of Wendy's in 1995, forging a partnership led by Wendy's founder Dave Thomas that saw the restaurants sit side-by-side at many locations.

After Thomas died in 2002, the two companies started to drift apart, with the doughnut chain choosing to focus on sandwiches and other breakfast and lunch options. The concept clashed with offerings from the Wendy's brand.

In 2006, the company was spun off into its own American entity, though its corporate headquarters remained in Oakville and most of its stores are in Canada.

Since then, the chain has struggled to boost sales in the United States despite thriving in Canada.

It has been a publicly traded company, listed on the Toronto and New York stock exchanges, since Wendy's first began to spin off its shares.

Shareholders will hold the same amount of stock as before, and the company will continue to operate under the Tim Hortons name with stock listings on the TSX and the New York Stock Exchange.

Carole Taylor Hired by TD Bank After Killing BC's Bank Tax

Not satisfied with doing TD Bank's and Corporate Canada's bidding by killing income trusts through a punitive and unjust tax based on the policy falsehood called "tax leakage", Carole Taylor thought she would go that extra distance to secure for herself that brass ring of a Bank directorship in this story by Will McMartin of

Taylor Hired by TD Bank After Killing BC's Bank Tax
BC is broke but she could make $145,000 to $350,000 as a TD director.

By Will McMartin, 14 Sep 2009,

It was an unexpected surprise. A gift, really.

Eighteen months ago, on February 19, 2008, then-BC Liberal finance minister Carole Taylor tabled the province's 2008-09 budget -- her last before quitting politics -- and said she was wiping out B.C.'s corporation capital tax.

For years the big banks had lobbied to have the hated tax abolished, but to no avail. Indeed, over the past three-and-a-half decades, governments of every political stripe -- NDP, Social Credit and BC Liberal -- have seen the corporation capital tax as a way for British Columbians to share in the enormous profits earned in this province by Canada's largest banks.

"The tax exists," former Social Credit Finance Minister Mel Couvelier explained to the legislature in 1987, "largely because the financial industry has often earned large profits and paid little income tax."

(Canada's 'Big Five' banks are headquartered in Toronto. As a consequence, they're largely exempt from paying provincial income taxes.)

Fast forward to August 27, 2009 -- just two weeks ago -- with a news release from Canada's second-largest financial institution, the Toronto-Dominion (TD) Bank. (In terms of market capitalization, the Royal Bank is the country's biggest, followed by the TD, then the Bank of Nova Scotia, the Bank of Montreal and the CIBC.)

The TD was adding another member to its board of directors. Who might it be?
Check out The Tyee's new classified listings.

Why, it's none other than Carole Taylor, B.C.'s former finance minister, who last year killed the province's corporation capital tax!

Article continues here

Tuesday, September 22, 2009

HST: The zenith of Flaherty’s hypocrisy

(Reprint from May 1, 2009)

As the mastermind behind Ontario’s 13% HST consumer Tax on Everything, Jim Flaherty has achieved the zenith of his intellectually dishonesty and laid bare who his real constituency is, namely corporations and not the people of Whitby-Oshawa. The HST tax that all Ontario consumers will face, is the ultimate manifestation of Flaherty’s bizarre campaign of year ago in which he railed Dalton McGuinty that Ontario was the last place in Canada to invest. This destructive childish rampage was designed to force the Ontario Liberal Premier to lower the tax rate for Ontario corporations and find those revenues elsewhere or to imperil essential services such as Ontario’s social security system.

Flaherty’s first attempt at brow beating Ontario to march to his drummer failed. Having delivered major cuts to corporate taxes at the federal level, amount to some 24% reduction, Flaherty wanted to do likewise for them at the Ontario Provincial level. This ultimately took the form of the HST in which some $4 billion in annual taxes will now be borne by Ontario consumers in order to create a like amount of windfall profits for Ontario corporations. The “incremental” economics of this policy are not pretty, as every purchase of a good or service will be met with the psychological hurdle of being faced with a 13% surcharge. This will only serve to magnify dramatically. Ontario’s already enormous underground economy, causing not only GST and PST to be evaded, but income taxes as well.

The hypocrisy of it all, becomes abundantly obvious when you take a moment to remind yourself how it was that Flaherty “sold” his highly destructive income trust tax. This entire policy was premised on the notion that income trusts cause tax leakage. Tax leakage is a completely false argument and is a contrived concept that attempts to argue that a given business formed as an income trust will result in less tax collection by Ottawa and the provinces than if that same business were formed as a corporation.

This is simply not true. Perhaps next time you are speaking with Jim, you should ask him for his in numbers and methodology since his argument has been disproved by HLB, BMO, RBC and PwC. Meanwhile Deloitte confirms that the takeovers of trusts now causing tax leakage, where none existed previously and these tax losses will continue to escalate as more takeovers of trusts occur, such as the takeover of Eveready by US based Clean Harbors Inc.

Flaherty’s hypocrisy on HST vis-à-vis his income trust tax occurs when you realize how it was “sold”. This canard known as tax leakage was presented to Canadians as being a situation in which tax revenues were being lost to the overall system, from the business side of the equation with the result that more tax revenues would have to be collected from taxpayers at large. This is simply not the case, unless of course Flaherty would like to PROVE it. Meanwhile this shifting of tax burden from corporations to the average taxpayer at large is EXACTLY what’s happening with the HST. That fact is self evident and can not be denied. The HST tax and the income trust tax were both designed to conger HUGE financial advantage to corporations in the way of windfall gains. The HST rewards corporations with $4 billion in additional profits in exchange for doing nothing and the income trust tax is simply designed to kill the corporations’ competition.

Anyone who buys into Flaherty’s inherently false rhetoric about income trusts, since tax leakage is a fraud, will have to, BY DEFINITION, hate the HST. This would include Dalton McGuinty, whose Finance Minister at the time, Greg Sorbara, wrote a letter in support of Flaherty’s income trust tax, that cojurred up the false notion of tax leakage when he wrote saying: “We believe that these changes will protect federal and provincial revenue from significant tax leakage.” Meanwhile tax leakage is only a supposition and not an empirically proven concept.

Nevertheless, that is how the income trust tax was sold. Therefore if you bought the bogus argument about tax leakage (as the McGuinty government did) and you don’t like income trusts, then you have to not like the HST, by definition, since the HST will also do the very thing that was alleged by Jim Flaherty in his Ways and Means motion to double tax investments made by RRSPs and kill income trusts, namely:

* ensuring that taxes are not unfairly shifted onto the shoulders of Canadian taxpayers, especially Canadian families.. (whereas the HST WILL unfairly shift a huge new tax burden from corporations on to the shoulders of Ontarians and especially Ontarian families!)

* strengthening Canada's social security system for pensioners and seniors....(whereas pensioners and seniors under the HST are now faced with a big new tax burden and/or the social security system is weakened since all this tax money is going into the corporations' pockets!)

And to the extent that the tax rate for corporations was lowered by 24% at the federal level and will be reduced to 10% at the Ontario provincial level, where 40% of trusts and 40% of trust investors reside, and given that there has not been a commensurate decrease in the 31.5% income trust tax, then this measure will also not have been met:

* levelling the playing field between trusts and partnerships and corporations,

One thing is however fro certain. Any constituent of Whitby-Oshawa who thinks that either Jim Flaherty has been empowered by their vote to act in the best interests of the residents of Whitby-Oshawa needs to do a reality check, as their vote has merely gone to Jim Flaherty in order to empowered him to do the right thing by his REAL constituency, namely corporations big and small, and all wannabe Jim’s friends on Bay Street. Jim Flaherty: corporate pawn and Whitby-Oshawa sell out.

Could it be any clearer or more hypocritical? Perhaps the name by which HST should now be known is the Hypocritical Sales Tax.

Anyone who said they like the income trust tax and who says they like the HST is a hypocrite or a complete argument in terms. At least Christine Elliott is being consistent, since she presumably supports husband Jim's income trust tax, but is decidedly against his hypocritical tax on everything, the HST. Hypocritical Sales Tax. Let's hope they are able to live harmoniously ever after.

Sunday, September 20, 2009

Did Ignatieff mention the $35 billion in pension savings that Harper nuked?

Ignatieff attacks Tories on range of issues in Waterloo stop

September 20, 2009
By Chuck Howitt, Record staff

WATERLOO — The Liberal Party abandoned its support for the Conservatives in the House of Commons because of the Tories’ terrible record on a whole slew of issues, Liberal leader Michael Ignatieff said Saturday.

During a visit to Wilf’s campus pub at Wilfrid Laurier University, Ignatieff attacked the Liberals on a broad range of issues, including the rising deficit, high unemployment, its response to the H1N1 flu epidemic and its failure to fix the problem over medical isotopes.

Amid chants of “Michael, Michael,” Ignatieff took particular issue with Tory ads questioning his years of living and working in Britain and the U.S. Almost 20 per cent of Canadians were born elsewhere in the world, he said, and two million Canadians are currently working in other countries.

“I want a country where everyone sets their sights on going overseas at some point in their lives,” he said.

On the federal deficit, the Tories started with a balanced budget, which suddenly ballooned to $32 billion, then $50 billion, and now they’re saying it might to $55 billion, said Ignatieff, who spoke for about 20 minutes.

“It could be $60 billion by Christmas,” he added.

During a scrum with reporters afterwards, Ignatieff assailed the Tories for ignoring the pleas of Waterloo’s Research In Motion and allowing the sale of Nortel Networks’ wireless assets to Ericsson of Sweden

“They (Conservatives) are just walking by the Nortel sale. They haven’t stood up for the Canadian intellectual property that keeps Kitchener-Waterloo humming.”

More on Ignatieff’s visit in Monday’s Waterloo Region Record.

Saturday, September 19, 2009

HST reveals the two faces of TD Bank. Neither is pretty. Both are self serving.

Today we observe in full technicolour, the two faced hypocrisy of the TD bank.

Back in May of this year we learned that TD Bank was the major backroom player in convincing the McGuinty government to impose this rapacious and absurd HST tax onto consumers in order to hand windfall tax benefits to corporations. This revelation was contained in a Globe article (below) entitled TD's Power of Persuasion.

Now we learn in the very same paper that TD Bank is saying and finally acknowledging what this tax is REALLY about in an article entitled: "TD Bank says Harmonized tax to hit consumers hard:"

Why was this reality about HST withheld from the public by TD Bank until the day AFTER the ST Paul's byelection that was a referendum of sorts on the HST tax.....conceived by TD Bank in the first instance?

This stinks on so many levels......however none more so than the tax itself which is really bad piece of tax policy solely aimed at shifting tax burden from corporations to consumers to make "Ontario the last place to live and raise a family":

TD Bank says Harmonized tax to hit consumers hard:

Karen Howlett and Ian Bailey
Globe and Mail
September 19, 2009

Consumers will bear the brunt of proposed tax changes in Ontario and British Columbia while businesses reap windfall savings of $6.9-billion, a new report says.

For the first time, economists have put a price tag on the value-added taxes the two provinces plan to introduce July 1, showing that the tax rate on consumption will jump 1.5 percentage points for consumers.

The report prepared by economists at Toronto-Dominion Bank could have caused a political headache in Ontario for Premier Dalton McGuinty. But the impact of its release Friday was somewhat blunted, having come one day after the Liberals sailed to victory in a by-election in the Toronto riding of St. Paul's, despite attempts by opposition candidates to turn the race into a referendum on the harmonized sales tax.

Ontario New Democrat Leader Andrea Horwath called the timing “awfully fishy.” A spokesman for Revenue Minister John Wilkinson said he was pleased with the report, regardless of the timing.

TD Bank chief economist Don Drummond, who played a key role in advising the McGuinty government on the proposal to harmonize the provincial sales tax with the federal goods and services tax, said he shared his findings with government officials a week ago but did not finish the report until the day of the by-election.

“I guess in a perfect world I would have preferred to have it out there before that,” Mr. Drummond said. “It could have been a basis for debate.”

The report said the tax burden will shift from businesses to consumers, who will pay higher prices on goods and services ranging from haircuts to new home purchases. Businesses will pass on most of their cost savings to consumers, but the lower prices will not fully offset the higher taxes, the report said.

Mr. McGuinty is facing political turbulence over tax harmonization, but nothing compared with the maelstrom that is battering B.C. Premier Gordon Campbell and his Liberals, who are facing a pointed anti-HST campaign by former Social Credit premier Bill Vander Zalm, and plunging poll results over their decision to embrace the HST after ruling it out during the recent provincial election campaign.

The TD report adds fresh fuel to accusations by opposition members in both provinces that harmonization is little more than a tax grab aimed at benefiting businesses at the expense of consumers.

“TD Economics shows the ‘Dalton Sales Tax' is just that – a permanent tax grab that will result in higher prices on the things we buy with no immediate benefit to consumers,” Ontario PC Leader Tim Hudak said Friday.

David Docherty, a political science professor at Wilfrid Laurier University, said the by-election results will resonate beyond the riding of St. Paul's because they will force the Tories to rethink their strategy. The Liberals emerged unscathed even though the midpoint of their second term has been dominated by spending scandals at two agencies.

“Voter turnout was so abysmal, McGuinty may well ride an apathetic public to a third term,” Prof. Docherty said.

It's a different story in B.C., where the HST has been just one of a series of economic woes for the Liberals that also includes a soaring deficit and resulting cuts to government programs and services. Opposition to the HST has driven down the Liberals' ratings in the polls and has prompted Mr. Vander Zalm to participate in an anti-HST rally in Vancouver today with NDP Leader Carole James. Both Mr. Vander Zalm, who left politics in 1991, and Ms. James have acknowledged the unusual nature of their alliance, but said their political differences matter less than hammering the Liberals over the HST.

“It's probably the first time that people from the left, the right, the middle – people from all political persuasions have come together, as well as labour and business and seniors and students,” Mr. Vander Zalm said in an interview Friday.

Once the provinces combine their PST with the GST, the new tax will be 13 per cent in Ontario and 12 per cent in B.C.

Businesses will reap huge savings because they will be able to claim rebates. But consumers will end up paying the new tax on goods and services that are currently exempt from any tax. Both provinces have attempted to take the sting out of harmonization by exempting goods such as diapers.

TD's power of persuasion

May 14, 2009
Globe and Mail

NEW YORK, TORONTO — One evening last December, Ontario Premier Dalton McGuinty strolled into Grano, a popular Italian restaurant in midtown Toronto, clutching a document that would provide the blueprint for his upcoming provincial budget.

He handed copies to two of his dinner companions: Mike Lazaridis, co-founder of BlackBerry maker Research In Motion; and Carol Stephenson, dean of the Richard Ivey School of Business at the University of Western Ontario.

The third guest, Toronto-Dominion Bank chief economist Don Drummond, didn't need to see the report. He wrote it.

Mr. Drummond's policy paper, “Time for a vision of Ontario's economy,” may have been dryly titled, but it was blunt: Ontario's days as an economic powerhouse were over. It called for bold action from the government, including spending on transit and environmental measures and – most crucially – the harmonization of the provincial sales tax with the federal GST.

A few months later, after those very recommendations were enshrined in an ambitious budget, TD sent an e-mail to select media quoting chief executive officer Ed Clark.

“The Ontario government has listened and acted on what needs to be done to create jobs and growth in the Ontario economy,” Mr. Clark said.

What he didn't say, at least not explicitly, was that Queen's Park had accepted TD's advice.

This kind of political canniness has come to characterize the ascendance of the bank, under Mr. Clark, as a lobbying juggernaut.

The Ontario budget was just the latest lobbying victory for TD – and perhaps more remarkably, the latest victory in which there appears to be no obvious prize for the bank. At least not in the immediate term.

From taxation rules in British Columbia to sales tax harmonization in Ontario to monetary policy in Ottawa, TD has become what many see as Corporate Canada's most influential player on public policy – and its most resonant voice amid the financial crisis.

Indeed, on some days, the bank can be mistaken for a shadow finance ministry.

“People used to say, ‘What's good for GM is good for America,'” concedes Scott Mullin, TD's vice-president of government and community relations. “I guess we turn that on its head and say, ‘What's good for Canada is good for TD.' So, if we're convinced that something like tax harmonization is good for Ontario, then we see that as having a positive impact ... for us.”

The clout is baked into the bank's corporate DNA, most notably in the formidable triumvirate of Mr. Clark, Mr. Drummond and Frank McKenna, three senior executives who were shaped by years of high-level government service. They remain among the most politically connected operators in Corporate Canada – particularly with the Liberal Party.

And their signature can be found on public policy files across the country.

When Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney suggested in December that the big banks weren't lending enough to consumers, it was Mr. Drummond who quickly crafted a rebuttal and sent the presentation to other banks for their feedback. Mr. Clark took the document to a meeting with Mr. Flaherty, Mr. Carney and the other bank CEOs in early January.

TD was also among the first to lobby the government to expand its CMHC mortgage purchase program, to provide banks with more flexibility to lend to consumers – an effort that was unveiled last October and has been twice expanded since then (although other banks insist they were equally involved).

At the end of April, on the eve of the Liberal Party convention in Vancouver, TD released an in-depth study on employment insurance, calling for an overhaul of the program. Two days later, Liberal Leader Michael Ignatieff (who has sought counsel from Mr. Drummond and Mr. McKenna on his economic stimulus plan) pitched a very similar proposal to the country.

And sources say Mr. McKenna, in particular, was instrumental in helping to persuade British Columbia to replace its financial institutions capital tax with a minimum tax in its budget last year.

To understand TD's pursuit of policy influence, one has to understand the career trajectory of these three men, and their transition from the public sphere to the private.

Mr. Clark, who has a PhD in economics from Harvard, was once an ideologically driven bureaucrat who helped craft the national energy program in the Trudeau years, and was vilified in the oil patch as Red Ed. In 1985, one of Brian Mulroney's first surgical moves as prime minister – to great applause in the business community – was to have Mr. Clark fired. The career bureaucrat responded by embracing the business community, and embarking on a career as an investment banker at Merrill Lynch.

Yet his policy roots haven't withered. After taking the helm of TD in 2002, and spending a couple of years fixing some of the bank's lingering issues, Mr. Clark has since carved out a singular niche among bank CEOs, proffering advice to governments not merely on mundane financial issues such as credit card fees, but on issues ranging from social housing to equalization. The more powerful TD became – as Canada's second-largest bank, and one of the largest by market value in North America, it has clout – the more powerful became Mr. Clark's ideas.

Within the bank, he has attempted to engrain the importance of participating in the political process. Three years ago, just before the federal election, he held a meeting with top senior executives to discuss making donations to both the Liberals and the Conservatives. The 10 officials agreed to contribute a combined $93,000, split equally between the parties. The move raised eyebrows, not least because only two of these people had made contributions before the meeting. But Mr. Clark insisted at the time it was important for individuals to pick up the financing slack after new rules barred companies from making direct contributions.

He declined to be interviewed for this story, but in an e-mailed statement he attempted to play down his bank's lobbying as unexceptional.

“I know my peers at the other Canadian banks do the same and I believe TD does not have any extra or special influence in this regard,” Mr. Clark wrote. “Frankly, I would be surprised if responsible businesses large and small were not reaching out to offer ideas on Canada's future success.”

Even if they are, they would have a hard time matching TD's influence, much less its connections.

Consider Mr. Drummond, a career bureaucrat in the Finance Department who some thought should have been named to the deputy minister's job, but never was. Frustrated by career limitations in Ottawa, Mr. Drummond jumped to TD in 2000, as chief economist and, in the only job pairing of its kind in Canada, head of government relations.

Less visible, but no less influential, is Mr. McKenna, the former Liberal premier of New Brunswick, who was recruited by Mr. Clark in 2006 to help win accounts for TD's investment bank. Perhaps the most skilled political networker in the country since Mr. Mulroney was at his peak, Mr. McKenna was the sort of door-opener TD needed to win top assignments during the financial boom years. He also has been put to work winning government allies during the bust.

He consulted with Ontario Finance Minister Dwight Duncan on the tax-harmonization file, sharing his first-hand experience with blending the taxes in New Brunswick in 1997.

“His advice was to do it,” Mr. Duncan recently told a Globe and Mail editorial board meeting. “His advice was that there would be political backlash to it but if you manage it properly ... you will be able to withstand the political backlash.”

Since the financial crisis began, TD's top officials have held roughly four times as many meetings with federal officials as those at RBC, the country's largest bank, according to the federal lobbyist registry.

Mr. Clark is very hands-on, and will request the name of individual bureaucrats who are writing memos to ministers so he can speak to them personally. While he and Mr. Drummond are intimately familiar with how the bureaucracy works, Mr. McKenna brought an added dimension: knowing how a first minister thinks.

TD does not have a Bay Street monopoly on national issues. Ontario's Premier has a close relationship with Gordon Nixon, CEO of Royal Bank of Canada, who formerly chaired the Toronto Region Research Alliance and has been an active promoter of technology and environmental programs in the province. And Ontario routinely consults with other top bank economists, such as Bank of Nova Scotia's Warren Jestin.

Ontario Liberal MP John McCallum, a former RBC chief economist, cautions against attributing too much clout to any single company. But he acknowledges that, among the banks, TD is now the most prominent lobbyist – and likely the most skilled, especially in the persons of Mr. Clark and Mr. Drummond.

“Between the two of them, they have huge knowledge of how the public sector works, and which are the most effective buttons to push. ... They're masters at that.”

Thursday, September 17, 2009

There only are two signatures on this seminal agreement. The first one is Flaherty's

March 9, 2009

Memorandum of Agreement Concerning a Canada-Ontario Comprehensive Integrated Tax Co-ordination Agreement (HST)


The Government of Canada (referred to as "Canada"), as represented by the Minister of Finance of Canada


The Government of Ontario (referred to as "Ontario"), as represented by the Minister of Finance of Ontario;

This memorandum of Agreement ("MOA") reflects the strong commitment by Canada and Ontario to work collaboratively to build a stronger economic foundation.

Pursuant to this MOA, both parties commit to using their best efforts to negotiate a new Canada-Ontario Comprehensive Integrated Tax Co-ordination Agreement (hereafter referred to as the "Canada-Ontario CITCA"), together with any necessary related agreements, whereby the Canada Revenue Agency ("CRA")and the Canada Border Services Agency ("CBSA") will administer an Ontario Value-Added Tax ("OVAT").

This MOA forms the framework for concluding the Canada-Ontario CITCA.
Canada-Ontario Comprehensive Integrated Tax Co-ordination Agreement

Canada and Ontario agree to make their best efforts to fulfill the undertakings set out in this MOA in order that all policy and administrative details are finalized, including any necessary legislative processes and the signing of appropriate agreements, before March 31, 2010, except where otherwise specified in this MOA.

Canada undertakes to seek the approval of the Governor in Council to enter into an agreement under Part III.1 of the Federal-Provincial Fiscal Arrangements Act consistent with the terms of this MOA. The parties understand that this MOA does not constitute an agreement pursuant to subsection 8.3(1) of the Federal-Provincial Fiscal Arrangements Act.

Ontario undertakes to seek authority to enter into the Canada-Ontario CITCA.

Canada and Ontario will use their best efforts to conclude the Canada-Ontario CITCA within six months of having signed this MOA.
Implementation Date

Subject to both Parties having signed the Canada-Ontario CITCA, and subject to legislative approval, the Parties will work toward the imposition of the proposed OVAT by the CRA/CBSA on July 1, 2010. Subject to these approvals, the CRA/CBSA will have the necessary systems in place to effectively implement the OVAT on July 1, 2010.
Federal Transitional Assistance to Ontario

To help offset the transition costs associated with the implementation of the OVAT and the winding down of the retail sales tax administration in Ontario and because moving to an OVAT would support economic growth and job creation, Canada will make two transfer payments totalling $4,300 million to Ontario. The schedule of transfer payments will be as follows: $3,000 million upon the date of imposition of the OVAT and $1,300 million one year following the date of imposition of the OVAT provided the tax continues to be in place one year after the date of imposition of the OVAT.

Ontario agrees to remain a party to the Canada-Ontario CITCA for a period of at least five years following imposition.
Ontario Value-Added Tax

An 8% OVAT would be implemented under the federal Excise Tax Act. Ontario will propose legislation to give effect to the Canada-Ontario CITCA and any other provincially administered measures appropriate to the transition to the OVAT.

The OVAT would have the same tax base as the Goods and Services Tax (GST), subject to the exceptions described below.
Provincial Tax Policy Flexibility

The Canada-Ontario CITCA will confirm Ontario's flexibility, subject to reasonable notice provisions, to:

* increase or decrease the OVAT rate after two years from the date of OVAT implementation;
* designate a limited number of OVAT point-of-sale rebates, not exceeding 5%, in aggregate, of the estimated GST base for Ontario subject to data availability and definitions used in the Canadian System of National Accounts or other mutually agreed upon data sources, definitions and methodologies. For greater certainty, point-of-sale rebates that Canada agrees to administer for Ontario will include children's clothing, feminine hygiene products and books;
* temporarily deny for a period of up to five years a portion, up to 100%, of allowable business input tax credits ("ITCs") based on a select list of items to be determined by Ontario (not to apply beyond the items subject to the current ITCs denials under the Quebec Sales Tax). Following this period, full ITCs will be phased-in, in equal annual proportions, over a period of up to three years. Ontario would advance the timeline for the phase-in of full ITCs should fiscal circumstances allow; and
* set OVAT rebate rates and thresholds for Municipalities, Universities, Schools, Colleges and Hospitals (MUSH),Charities, qualifying NPOs and New Housing, subject to matching other federal GST administrative and structural parameters.

Canada agrees to introduce legislation to enable the tax policy flexibility noted herein.
Common Tax Base

Except as provided in this MOA under the heading Provincial Tax Policy Flexibility, Ontario will enter into the Canada-Ontario CITCA and will be bound by tax base changes made by Canada with respect to the GST. However, where Canada proposes a tax base change that would result in a reduction of more than one percent of OVAT revenues (net of provincial rebates provided for under this MOA, and ITCs), Canada may implement the change only if the Minister of Finance of Ontario provides written agreement to the change prior to implementation. If Canada implements the tax base change without consulting Ontario, or proceeds without Ontario's written agreement, Canada agrees to fully compensate Ontario for the revenue reduction for every year that the change remains in place and the Canada-Ontario CITCA remains in force.

Canada and Ontario will develop reasonable notice provisions in the Canada-Ontario CITCA.
Collection and Administration

The OVAT, including all eligible rebates and temporarily restricted ITCs provided for in this MOA under the heading Provincial Tax Policy Flexibility, will be collected and administered, at mutually agreed upon service and compliance levels, by the CRA/CBSA at no charge to Ontario. In addition, Canada will be solely responsible for all CRA/CBSA startup and ongoing costs, including their development and systems costs.

For greater clarity, these costs will not reduce or be offset against the $4,300 million in total transfer payments provided for in this MOA under the heading Federal Transitional Assistance to Ontario.
Payment of Revenues Collected

Canada and Ontario agree that revenues payable to Ontario will be based on the revenue allocation framework as set out under the Canada-Ontario CITCA, subject to the following:

* Canada agrees to pay Ontario its revenue entitlements on a daily basis. For greater clarity, the allocation for a tax entitlement year will be paid to Ontario in estimated daily amounts determined using the revenue allocation framework beginning July 1, 2010. The payments will be based on the estimate for the tax entitlement year, and will include adjustments to these amounts relating to scheduled revisions and reconciliations as provided for under the revenue allocation framework.

The revenue allocation framework to be included in the Canada-Ontario CITCA will be based on the framework in the CITCA between Canada and the HST provinces.
Exchange of Information and Other Agreements

There will be full co-operation between Canada and Ontario with respect to the exchange of information relating to the OVAT. The specific terms on information exchange and mutual assistance will be provided for in agreements to be entered into between Canada and Ontario (e.g., the CRA and Ontario and the CBSA and Ontario). Such agreements will ensure the timely provision of available OVAT specific data and other OVAT-related information to Ontario, as maybe disclosed pursuant to the appropriate laws and regulations.

Canada and Ontario will work to establish mechanism(s)/agreement(s) to provide for the management of issues related to client services, compliance and enforcement of the OVAT by the CRA/CBSA.

Best efforts will be made to conclude these agreements in a timeframe that is consistent with, and no later than, the target date for the conclusion of the Canada-Ontario CITCA noted earlier.
Human Resources

Canada and Ontario acknowledge that they each must consider relevant legislation and policies, and have collective agreement obligations with their respective bargaining agents. Within this context, the Parties agree to negotiate the best possible arrangements, to be contained within a Human Resources Agreement, for employment at CRA/CBSA within Ontario, of Ontario Public Service employees affected by this MOA.
CRA Administration of OVAT in Ontario

Given the significant presence of CRA/CBSA activity and operations in Ontario, and the previous clause pertaining to Human Resources, Canada will maximize the amount of activities and operations carried on in Ontario for OVAT.

Where it can be demonstrated, with respect to specific OVAT activities and operations, that the effective administration of OVAT would be jeopardized if the activities and operations are performed in Ontario, Canada will use best efforts to maximize employment opportunities in Ontario for a corresponding number of Ontario employees affected by this initiative, within departments or agencies of the federal government.

The Ontario Minister of Finance may designate a person to examine such books and records, excluding information which is protected by law, as maybe relevant in order to permit such person to report in respect of the payments made to Ontario under the Canada-Ontario CITCA.
Appointment of Panel

Canada and Ontario agree to jointly appoint a Panel or Individual, within 6 months following the implementation of the OVAT, to review and make recommendations on possible improvements to the:

* administrative and policy information available on the OVAT;
* revenue allocation framework, such as replacement by a system that would provide the distribution of revenue to Ontario, and Harmonized Sales Tax provinces, based on actual sales of goods and services in such provinces; and
* governance and organizational structures of the various committees under the Canada-Ontario CITCA.

The Panel or Individual will report back to the parties within one year of being appointed.

Canada and Ontario agree to consider revising the Canada-Ontario CITCA as appropriate to reflect the recommendations of the Panel or Individual. Canada will consult with the existing Harmonized Sales Tax provinces.
Ontario Retail Sales Tax

Ontario will be responsible for winding down its retail sales tax to the extent that it is to be replaced by the OVAT.

CRA/CBSA and Ontario will have the option of agreeing on the CRA/CBSA providing client services, collections, audit, rulings, objections and appeal activities in respect of the retail sales tax on an incremental fee for service basis over the transition period.
Constitutional Jurisdiction Not Waived

Neither Canada nor Ontario shall be deemed to have surrendered or abandoned any of its powers, rights, privileges or authorities under the Constitution Acts, 1867-1982, and any amendments thereto, or otherwise, or to have impaired any such powers, rights, privileges, or authorities.

Pending a public announcement by Ontario that it is introducing an OVAT, Canada commits to taking all steps to embargo the existence of this MOA and to not disclose in any way federal-provincial discussions relating to the development, negotiation and execution of this MOA or to an OVAT. The Parties agree not to disclose this MOA unless mutually agreed to in writing or required by law.

March 9, 2009

The Honourable James M. Flaherty
Minister of Finance March 10, 2009

The Honourable Dwight Duncan
Minister of Finance

When $1000 in HST hush money doesn't work: Simply issue threats

In all its manifest stupidity and undemocratic thug-like tactics (ie. $1,000 cash bribes to voters, claims of endorsement that turn out to be non-existent and fabricated, and now, open threats to its opponents in the public), McGuinty’s HST tax would be more aptly named as the WTF tax:

Ontario hits back at mutual fund industry over HST complaints

Globe and Mail

Thursday, September 17, 2009

TORONTO -- The Ontario government has threatened Canada's mutual fund industry with a PR offensive against management fees charged to investors, unless fund executives mute their objections to proposed sales tax changes.

Industry executives have complained that the government's plans to harmonize the provincial sales tax with the federal goods and services tax will siphon money out of the retirement nest eggs of Canadians. But after an article published in The Globe and Mail this week, officials in Finance Minister Dwight Duncan's office said they are prepared to release a document on the negative impact of management fees for investors if executives continue to complain in public, industry sources said.

The move has left industry executives reeling.

"Everyone was in shock," said the president of a fund company who asked not to be named.

Mr. Duncan said he is not aware whether his officials have compiled information that would help investors better understand the cost of owning funds. But he said he fully supports any measures that would enhance transparency for investors.

"I believe the clearer and the more transparent these things are, the better," Mr. Duncan said in an interview yesterday. "If we learned anything a year ago with the closing of Lehman Brothers, when issues of this nature aren't clear and transparent, problems happen."

Industry executives say investors will pay another $500-million a year in fees once the proposed harmonized tax takes effect next July 1 in both Ontario and British Columbia. There is currently no provincial tax on mutual funds in any province, while the 5-per-cent GST is already applied and included in fees. A move to include funds in a harmonized tax would mean an extra 8 per cent on management fees in Ontario and 7 per cent in British Columbia.

It was the industry's drawing attention to these additional costs that led to an exchange this week between Mr. Duncan's office and the sector. The message was delivered by Darcy McNeill, director of communications for Mr. Duncan, to an official at a fund company, who in turn circulated it widely throughout the industry, sources said.

"They are formulating a plan of defence and if need be, attack, to counter future negative articles on the HST," says an e-mail summary of the conversation obtained by The Globe.

"Basically what happened, was they voiced their displeasure with us," said the president of another mutual fund company who also asked not to be named.

Mr. McNeill denied delivering the message.

"I certainly never said anything like that," he said yesterday.

Harmonization is aimed at making businesses more competitive. But the Ontario and B.C. governments are under siege for hitting consumers with a tax on everything from haircuts to new home purchases over $500,000. The premiers of both provinces have moved to douse a firestorm of criticism over the harmonized tax by exempting a number of basic goods, including children's clothing and diapers.

"It's the wrong signal to send in tough economic times," said Lisa MacLeod, revenue critic for the Ontario Progressive Conservatives. "They're nickel and diming people who are saving for their retirement."

Industry executives said they were not prepared to speak for attribution about the threat from Mr. Duncan's office, because they are hoping they can persuade the Ontario, B.C. and federal governments to tax funds fairly.

But the executives were also taken aback at the comparison between Canadian fund companies and Lehman, the Wall Street investment bank that collapsed last year, and at least one was prepared to go on the record.

"This type of response to a significant industry in Ontario is very unproductive," said Bill Holland, chief executive officer of CI Financial. "To compare the mutual fund industry to Lehman Brothers borders on the absurd."

© 2007 The Globe and Mail. All rights reserved.

Wednesday, September 16, 2009

Flaherty is the deadbeat dad of the orphan known as HST

Having ushered this absurd HST tax into this world.......Flaherty is now denying his clear parentage. Maybe an HST DNA test is in order?

Jim Flaherty clams up on new harmonized sales tax

Sep 16, 2009 04:30 AM
Bruce Campion-Smith
Robert Benzie
Toronto Star

Finance Minister Jim Flaherty and fellow Conservatives are distancing themselves from the harmonized sales tax as public angst grows over the price hikes it will mean on everything from fast food to funerals.

The issue is also causing a headache for Liberal Leader Michael Ignatieff, after he publicly denounced the "Harper Sales Tax" yet gave private assurances to Premier Dalton McGuinty that a federal Liberal government would keep the harmonized sales tax.

The harmonized sales tax (HST) will blend the 8 per cent provincial sales tax and the 5 per cent federal goods and services tax. As of next July 1, Ontarians will pay a blended tax of 13 per cent on hundreds of items that had previously been subject to only the 5 per cent GST.

Once an advocate of the tax scheme, Flaherty was washing his hands of it this week as NDP MPs went after the government for "foisting" higher taxes on residents in Ontario and B.C., the two latest provinces to join the plan.

Flaherty downplayed Ottawa's role and said the decision to meld the taxes was up to the provinces. In the past, Flaherty has publicly pushed provinces to harmonize their sales taxes with Ottawa's, calling the two-tier tax system a "direct burden" on businesses.

In March, he praised Ontario, saying the move would save business about $500 million in administrative costs, and noted that, in a few years, "hopefully we will have a harmonized system across Canada."

But federal Conservative sources have told the Star that earlier in the summer, officials in Prime Minister Stephen Harper's office ordered Flaherty to tone it down.

"They asked Jim to stop talking about (the tax) so much because it's not helpful," said one insider.

Ignatieff came out swinging against the Tories' support of the harmonized tax earlier this month.

Yet yesterday, McGuinty said he had been assured of Ignatieff's support. "We have secured Mr. Ignatieff's commitment to moving ahead with the single sales tax should he earn the privilege of serving Canadians in government."

Today's Globe Editorial Cartoon

Tuesday, September 15, 2009

Success has many fathers, while McGuinty's HST failure is an orphan

How kind (desperate?) of Dalton McGuinty to share the parentage of his pathetic HST tax with anyone in sight. Too bad he didn't have the courtesy to try this concept out on voters before hoisting it on perpetuity.

McGuinty says Ignatieff would support HST plan
Tue Sep. 15 2009

Ontario Premier Dalton McGuinty says he has the support of federal Liberal Leader Michael Ignatieff to pass the Harmonized Sales Tax in the event the Grits win an election.

McGuinty broke the news to reporters at Queen's Park on Tuesday. A spokesperson for his office said that there have been several conversations with the federal opposition leader about his support for the HST plan and that his support has indeed been confirmed.

The Conservative government has already promised McGuinty it would provide the province with $4.3 billion to help give Ontarians $15 billion worth of tax cuts to make up for the increase in costs the HST would impose.

Provincial Finance Minister Dwight Duncan confirmed to reporters after Question Period that Ignatieff has also promised to match the Conservatives' financial contribution if the Liberals win the next federal election.

"I remind you we have a signed agreement with the feds and I would expect that governments would live up to signed undertakings by other governments," he said.

A call to Ignatieff's office went unanswered.

Ignatieff has said he has some concerns about merging the 8 per cent provincial tax with the 5 per cent goods and services tax.

Ignatieff, who has vowed to bring down the Conservative government by forcing a fall federal election, said he'd like to see more items exempted from the HST to help struggling Ontarians.

Critics have slammed McGuinty for the Liberal tax reform plan. Though merging the taxes will help businesses prosper, it will also raise the cost of daily items such as coffee and gasoline.

"How can the premier possibly argue that harmonizing the HST is good for ordinary Ontarians when it makes life more expensive," asked NDP MPP Michael Prue in legislature Tuesday.

McGuinty retorted that there is an "overwhelming consensus" among business leaders and economists that the plan is "the right thing to do" for Ontario.

He reminded the House that the HST has been supported by poverty groups and food banks.


Meanwhile, Tim Hudak, the leader of Ontario's Progressive Conservative party, took a shot at the Liberal government's handling of a spending scandal at the Ontario Lottery and Gaming Corporation.

Yesterday, McGuinty outlined a set of new measures aimed at improving accountability after it was revealed that executives at the OLG filed questionable expenses.

Two weeks ago, the premier announced that the province's integrity commissioner must now approve any expense claims filed by Ontario agencies.

Hudak sent out a news release Tuesday questioning how a staff of nine people at the integrity commissioner's office could review expense reports of 80,000 public servants.

Hudak asked McGuinty to reveal details of his accountability plan. He said his staff had called the commissioner's office for details but they were told that officials are "waiting for direction" from the Premier's office.

With a report from CTV Toronto's Paul Bliss


Federal Liberals still begging for hand-outs without doing anything to deserve them

Friday, September 11, 2009

Of fear-mongering and falsifying numbers

Please have a read of the Liberal press release below in which the Harper Conservatives have clearly overstated the cost of the Liberal’s EI proposal by a factor of 4 to 1, and the comment is made

"Canadians do not need fear-mongering and falsifying numbers from their federal government,”

Why would anyone trust any number coming from the Harper CONs?

There seems to a consistent pattern of deception going on here. Have the media noticed it?

Just like the fear-mongering and falsifying about tax leakage......that destroyed people’s life savings and hopes for a dignified retirement in order that Canada’s lifeco’s could sell more of their flawed investment products and stifle competition for Canadians’ retirement savings.

Conservative deception laid bare by PBO analysis

OTTAWA - Independent third-party validation has confirmed that the Conservative government acted in bad faith this summer with the Employment Insurance Working Group, Liberal MPs said today.

“Instead of working together in good faith to find common ground to help the unemployed, the Conservatives chose to misrepresent our proposal and waste time while unemployed Canadians waited for help,” said Liberal Leader Michael Ignatieff.

Parliamentary Budget Officer Kevin Page issued his report today that concludes that $1.148 billion is “a reasonable estimate of the cost” of the Liberal proposal to provide a national standard for EI eligibility of 360 hours on a temporary basis.

Mr. Page was asked to do the independent analysis after the Conservatives deliberately skewed the numbers to peg the cost at $4 billion in an attempt to scare Canadians into believing that the Liberal proposal wasn’t feasible.

In his report, Mr. Page called the government’s costing “flawed” and “not consistent” with the Liberal proposal.

“Canadians do not need fear-mongering and falsifying numbers from their federal government,” said EI Working Group member Marlene Jennings.

“We gave an honest effort to get work done for unemployed Canadians,” said Liberal Human Resources Critic Michael Savage. “It’s disappointing that Conservative members of the group wasted this opportunity to make Parliament work.

To view the full report:


Press Office
Office of the Leader of the Opposition

Why Harper broke his own fixed election law: It was the economy stupid. was Harper’s self preservation stupid:

Canadians are a gullible lot. None more so than Michaëlle Jean, it seems. But then she is a former journalist, a profession as practiced today that rewards and promotes the gullible along with the compliant.

It was this time last year that we were told by Stephen Harper that he was going to break his own fixed election law and cast Canadians into an unnecessary and costly election, despite the fact that Harper’s own legislation required that an election occur in October 2009 and not October 2008. Now it seems, we will have both.

The reason advanced by Harper for breaking his own law was that Parliament was “dysfunctional”. This despite the fact that four by elections would be terminated at the eleventh hour and the their democratic outcomes tampered with, yet avoiding him the embarrassment of a total by election rout. This despite the fact that Parliament was not even in session and the Harper government had done everything in its power to render Parliament dysfunctional, including writing a 200 page instructional manual for the Conservative caucus members on how to make Parliament dysfunctional;. The release of that document to the public at the time of this “faux argument” would have seriously undermined Harper’s reasons for reneging on his fixed election promise, which explains why Don Martin of the National Post refused to release it to me, as he has the only known copy that is in the public domain. It was given to him by a sitting MP, presumably in order to give it wide public visibility, rather than for Harper safe keeping and out of the hands of inquiring minds like mine.

If it wasn’t obvious to you at the time, as it was to myself and many others, why Harper was calling his 2008 election, it should have become abundantly obvious in the subsequent year, unless of course you were living in a cave the entire time. It was the economy stupid. It was Harper’s self preservation stupid. It had nothing to do with you or what was good for the country. It was all about Harper. Harper had been warned by those in the government who are real economists that the global economy was headed for some significant headwinds and that Canada would be part of the potentially major downdraft that was just around the corner.

These are not retrospective theories of mine, as I was blogging about this very motive of Harper’s at the time that this very nonsense was going down. Meanwhile the main stream media was totally preoccupied by the “Parliament is dysfunctional” ruse.

Harper naturally thought of this pending development he was being warned about go government officials, in strictly political self interested terms. Here he was about to become the victim of his own “righteous” fixed election legislation that enforced upon him an election in October 2009. From his selfish perspective the timing couldn’t be worse. He would be going to the electorate in a difficult economic climate that would have been proceeded by the high likelihood of running large deficits. That would not be good. Harper had to weasel out of his fixed election law and needed a reason to do so. However flimsy or audacious it might be.

This is were the insights of Tom Flanagan are very helpful as he recently described Harper’s thought process in justifying his actions, as one in which: “It doesn't have to be true. It just has to be plausible.”

This is where the press comes in, as the press is often the first to glom onto these “plausible” arguments that are manufactured by Harper to justify his most recent audacious act and then go to great lengths themselves to add meat to Harper’s naked bone of an argument. Just look at how the press glomned onto the fictional nonsense of Harper’s bogus argument that “income trusts cause tax leakage” despite the fact that he had never released his factual proof for such a claim and despite the fact that such a claim has been disproven by every reputable and independent group that looked into the matter. The hard truth is irrelevant to the Canadian press at large, when you’ve got “plausible” to latch onto.....and deadlines to meet.

All of Harper’s actions in government, especially those involving the fate of his government are driven by complete self interest and a pathological desire to limit Canadians’ democratic options. This is corrosive in the extreme and a matter of grave concern to me. Thank goodness we have informed partied like Democracy Watch to pursue these matters in the courts and ensure our system of democracy is not redefined and shaped by the whims of one Stephen Harper.

Faced with a possible defeat of his government he pays a visit to the dutiful Michaëlle Jean to prorogue a Parliament and deny our newly elected politicians the right to hold a vote of non confidence. Then, forestalling defeat for the two month reprieve granted to him by the Governor General he is then faced with the democratic option of a completely legitimate Coalition government replacing his, and so he launches into some public tirade about Socialist and Separatists and how none of them had been elected to form the government, misleading Canadians into thinking our Prime Minister is elected in a manner similar to the President of the United States. Notice the extent to which Harper was able to enjoin the gullible Canadian press on throwing stones at the Coalition, and thereby deny Canadians from this completely legitimate course of action, and in the process effectively rewrite our democratic norms in way that is of mercurial advantage to him. And now we have Harper arguing against the calling of an election, citing all sorts of implausible arguments about the consequences of doing so. Implausible or not, the press is more than happy to accord these arguments with front page headline status.

Harper is someone who is hell bent on retaining the reins of power and will do anything to achieve that end. That alone is reason enough to throw the man from office. The fact that he will so quickly turn his back on his own so called principles, in which fixed election promises become mere artifices when the circumstances suit him or the concept of running massive deficits is something that this anti-deficit crusader of yore attempts to portray as some virtuous thing in the context of today and his own political surivivor, also means that his core supporters should want to throw the man from office, unless of course they are as totally amorphous in their beliefs and power hungry as him? I think we know the answer to that.

Wednesday, September 9, 2009

Just like Harper's tax leakage hoax......“It doesn't have to be true. It just has to be plausible.”

In today's Globe and Mail, Stephen Harper's former adviser Tom Flanagan says the Conservatives will attack the Liberals for forming a coalition with the other opposition parties.

Mr. Flanagan admits that this Conservative election strategy is based on a falsehood:

“It doesn't have to be true. It just has to be plausible.”

Wednesday, September 2, 2009

A political primer for the Liberals on Income Trusts by Professor Stanbury

Leadership? Here’s Ten Reasons Why the Tax on Income Trusts Was a Public Policy “Train Wreck”

There’s considerable evidence to indicate the Harper government created the appearance of a crisis or phony crisis to sell the tax.

By W.T. Stanbury (Professor Emeritus, UBC) Sept. 22,2008
The Hill Times

Introduction: Let’s start with Stephen Harper’s proposition that the central issue in the current election campaign is “leadership.” Effective leadership should produce good public policies. In this piece, I argue that there are ten reasons why the huge tax on income trusts announced on October 31,2006, and made into law on June 22,2007, is the greatest public policy “train wreck” in decades. It puts in question Mr. Harper’s leadership skills, and that includes his willingness to tell the truth. The tax may also be an albatross for Finance Minister Jim Flaherty.

1. Harper Denied He Reversed Himself

The income trust tax was an obvious reversal of repeated promises by Stephen Harper when he was Opposition Leader in 2005 and during the last election campaign. This reversal was widely perceived to be a serious ethical fault and Harper provided no convincing reason why such a reversal was justified. Harper did not lie because he did not intend to mislead the public with his promises. However, on November 1,2006 in the Commons, Mr. Harper did lie about what he said during the election campaign. The clearest statement was in the party’s election platform released on January 13,2006. “A Conservative government will…preserve income trusts by not imposing any new taxes on them.”

During Question Period on November 1,2006, the PM said: “The commitment of this party ….. was a commitment to protect the income of seniors”. On November 2, the PM said, ”this government will not apologize for trying to protect the interests of individuals and a tax system that makes big business pay its fair share.” You decide.

2. Huge Capital Losses

The S&P/TSX Income Trust Index. closed on October 31, 2006 at 164.86. Two days later, the index was at 138.21. That represents a loss of $32.5 billion to the owners of trust units. Two weeks later the index was at 135.51 representing a loss of $35.6 billion. To the extent that the Trust Index later rose to higher levels does not diminish this loss for two reasons. First, some investors had to have sold shortly after the announcement—otherwise the index would not have fallen. The index reflects real transactions at real prices. Second, any subsequent increase in the index is the result of the myriad variables that affect market value, such as interest rates, and energy prices (particularly
important to the energy trusts), and the further one gets from the initial announcement date the more one has to factor in the relative price movement of other indices to which the trust index is historically correlated, i.e., the broader TSX common share stock index and/or the energy subsector thereof.

3. Using a Methodology Known to be Greatly Biased

The Department of Finance’s methodology used to estimate the so-called “tax leakage” of $500 million for the federal government in 2006 omitted the present value of deferred taxes on the 39% on trust units held in tax deferral accounts like RRSPs. The officials knew as early as March 2004 and again in the summer of 2005 that their methodology was seriously biased toward generating revenue losses when income trusts were compared to regular corporations. When these deferred taxes are included, there was no “tax leakage.” Thus a serious omission may well have resulted in misleading policy advice by officials to their Minister, and the PM.

4. An Orwellian “Tax Fairness Plan”

The stated justifications for the 31.5% tax on income trusts were at best seriously questionable. The Government’s use of language in the so-called “tax fairness plan” was reminiscent of George Orwell’s Ministry of Truth.

The government made a great effort to frame the new 31.5% tax on income trusts as a matter of “tax fairness.” A frame is a conceptual structure intended to call up a wider/deeper set of constructs that will help to define a concept or issue in the way the framer desires. It makes use people’s prior modes of classifying information and issues; it takes advantage of embedded mental habits. The objective of such framing is to “ make a silk purse out of a sow’s ear.” The trust tax was bundled with three small tax cuts, two of which benefited seniors. But the benefits for seniors amounted to about 2% of their capital losses on trust units.

An analysis of the new tax on some income trusts shows that the measure did not achieve “tax neutrality” as repeatedly claimed by the government. The tax added to the variegation in effective tax rates across types of business organizations, and by types of owners of these assets. The tax did not “level the playing field” as the Minister claimed so loudly and repeatedly. In fact, the tax was highly discriminatory--- it exempted REITs ( which accounted for about 15% of the total market value of trusts on the TSX), and private flow through entities like those used by many law and accounting firms.

5. Phony Crisis to “Sell” the Policy

There is considerable evidence to indicate that the Harper Government created the appearance of a crisis or phony crisis to sell the tax. The government proceeded in secret during 2006, then made a dramatic announcement of strong action. Then it justified the move by claiming that there was a crisis which forced it to act as it did. The claims were couched in emotive rhetoric, primarily by Finance Minister Flaherty. Here is one of many possible examples. On November 9,2006, before the Commons Finance Committee, Flaherty was asked: “if we had maintained the status quo, was there any threat of it driving us into the red?” He said: “Over time, yes. There was a clear and present danger that Canada was going to become an income trust economy…” Ridiculous! The claimed tax revenue losses of $500 million in 2006, were a minute fraction of corporate income tax revenues of over $37 billion, and the current surplus of over $12 billion in 2006.

A few minutes later, the Minister claimed that the “ erosion of the tax base [ said to be due to trusts ] would have meant that, to pay for… the health transfers, the post-secondary education transfers, the social transfers, and infrastructure, we would have had to tax more and more individuals and their families…” This apocalyptic rhetoric is false.

6. A Zero Revenue Tax?

The income trust tax is an extremely unusual tax.. No revenue will be collected, but the entities subject to the tax will disappear from public capital markets -- which was the apparent point of the effort. The Department of Finance never gave any estimate of the amount tax revenue the new tax was expected to generate in any of its documents. This was most unusual; the officials evidently knew that no revenue would be collected because the tax did not apply until 2011 and by then there would no longer be any of the income trusts subject to the tax.

7. Many Misleading Statements By the Minister

Finance Minister Flaherty was the point man for the trust tax. He made endless misleading statements in support of the government’s action. He claim that the tax would result in $2 billion in revenue losses for the provinces over four years was unfounded as it failed to take into account the redistribution affects among provinces. Flaherty claimed that the proposed conversion of Telus and BCE to trusts would cause huge tax losses was false since both companies had already stated that their cash corporate income taxes would be negligible for the next several years.

The Minister ( and an official!) testified on January 30,2007 that the drop in the market value of trust units immediately after the announcement of the new tax was evidence of so-called “tax leakage.” This is an elementary, but serious error. The drop was due to the introduction of the tax. Asset values and changes in taxes on those assets move inversely to each other. The fall in value would have occurred even if the tax rate on trusts had been higher than on corporations!

8. Very Large Adverse Economic Consequences

Most serious, was the evident failure of the Harper Government to anticipate the reasonably predictable adverse consequences of the tax. They have been huge (and are still being felt in September 2008). One of the most important induced effects of the tax has been (and will continue to be) a decline federal (and provincial) tax revenues due to the takeover of the devalued income trusts by entities which pay lower taxes than did the trusts, i.e., foreign interests, domestic-private equity funds, and domestic pension funds. With some leveraging, foreign owners, subject only to the 15% withholding rate, can reduce the effective tax rate to near zero.

9. Punitive Remedy, When Better Alternatives Were Available

The government’s “remedy” for the purported problems associated with the rapid growth of income trusts ( a 31.5% tax on the distributions of some publicly-traded trusts ) was far hasher than it needed to be. What were the practicable alternatives? a) Suspend the advance approval of proposed new trusts as the Liberals did on September 19, 2005 (recognizing that that such an action would likely cause a drop in the market price of income trust units due to uncertainty). – and simultaneously announce a transparent, consultative process to review the issue with a public report in three months; b) Declare a moratorium on new trusts – and simultaneously announce the same process; c) Impose a tax on income trust distributions at source of 7% to 10%. Witnesses made it clear that such a tax would be sufficient to actually level the playing field based on the effective corporate income tax rates—which vary by sector and firm; d) Apply alternative c), but make the tax refundable to Canadian residents. (This might violate the “national treatment” provision of NAFTA.); e) Lower the corporate income tax. The Liberals had started to lower the corporate income tax (and they increased the dividend tax credit) to reduce the gap between the two different legal forms of organization of businesses, trusts and corporations. On October 30,2007, Flaherty---but it came far too late for the trusts. announced much larger cuts in the corporate income tax. One expert, Dennis Bruce, pointed out that the various reductions since 2004 effectively eliminated the claimed “tax leakage’—even using Finance’s biased methodology.

10. Closed Process—But Secret Lobbying by Certain Interests.

There was no public consultation process in 2006 preceding the imposition of the 31.5% income trust tax like that which occurred in 2005 under the minority Liberal government. The growth of income trusts could have been temporarily halted in the fall of 2006 by doing what the Liberals did on September 19, 2005: suspending advance tax rulings for proposed trusts by the Department of Finance.

There was secret lobbying in 2006 of the PM and Finance Minister by CEOs and company directors ( see Globe and Mail, Nov.2,2006 ). They wanted the trend to convert corporations to income trusts stopped due to the pressure of competition, and the reduced discretion they would have as head of an income trust. It appears that contrary arguments were not heard. How come only the opponents of trusts knew it was a good time to lobby?

To summarize—the income trust tax is an outstanding example of how not to make tax policy. It resulted in a “train wreck” whose effects continue to reverberate—perhaps in the current election campaign.

Tuesday, September 1, 2009

Income Trusts: A teachable moment

Worse than Harper's broken promise, was his false premise for breaking that promise. Tax leakage is a complete hoax.

It’s time for the Liberals to demonstrate to all Canadians the incompetence and moral emptiness of Stephen Harper by exposing the falsehood of tax leakage. A falsehood employed to advance the interests of groups like Manulife at the expense of Canadian seniors and all Canadian taxpayers.

Harper’s handling of the income trust matter is a teachable moment for all Canadians.....that definitively teaches us all about Harper’s deceit, disdain and dishonesty that Canadians need to know to turf him from office.

The only alternative explanations are that Harper is utterly incompetent or merely an instrument of Bay Street. All bad.

See Ignatieff comment on income trusts bolded in the speech below:

Liberal Caucus: We can do better
Michael Ignatieff speech Delivered on 01 September 2009

Sudbury, Ontario

Hier soir, nous étions 600. Vous sentez l’énergie qu’il y a ici. Cette énergie, c’est celle du retour du Parti libéral du Canada à Sudbury!

Everywhere I’ve been this summer, I’ve seen the same enthusiasm—all while apparently remaining completely invisible.

Hundreds of people didn’t notice me out in Victoria back in June. Or in West Vancouver. Or in Cape Breton.

I was perfectly invisible in front of nearly a thousand people at the Calgary Stampede. Ralph (Goodale) is still wondering how I pulled that off.

Same story at National Aboriginal Day at Crawford Lake.

Et pendant que nous y sommes, je ne suis jamais allé non plus fêter la Saint-Jean-Baptiste à Québec, je n’étais pas au Grand Tintamarre à Miramichi ni à Caraquet; et ne parlons pas d’Edmonton, de la Beauce ou de la Gaspésie.

Everywhere I went, across 8 provinces and the Northwest Territories, I found Liberals energized and set to work hard to put Stephen Harper out of a job.

We should be proud of the work we’ve done this year.

Nous avons fait grandir notre parti : avec de nouveaux membres, avec de nouvelles idées... et avec la meilleure campagne de financement des dernières années.

Nous sommes plus unis que nous l’avons été depuis une génération.

Nous sommes prêts à livrer bataille dans chaque comté du pays.

Et nous sommes prêts à ramener à Ottawa un gouvernement compétent, un gouvernement de compassion, un gouvernement de prospérité pour le bien de tout le Canada.

I know it can be frustrating at times.

We’re working against opponents who make politics personal—who distort and deny the truth and put partisan gain ahead of the national interest.

We’re working against a government that’s ready to sacrifice national unity to stay in power.

But we have a secret weapon on our side: Stephen Harper’s record.

The worst unemployment record in two decades

The worst deficit in our history

And last quarter, the worst performing economy in the G7.

Stephen Harper didn’t see a recession coming last fall.

Now he’s missing something bigger: what we’re going through is more than a recession—it’s a fundamental restructuring of the global economy.

Stephen Harper doesn’t get that.

He doesn’t get that Canada’s in a race—that we’ve got to position our country to compete in the twenty-first century. We’ve got to make Canada a world leader again, and we’ve got to do it now.

Il ne comprend pas ce que les travailleurs de la forêt du nord de l’Ontario, du Québec et de la Colombie-Britannique ont compris. C’est pourtant simple : on ne peut pas rester les bras croisés et attendre que la construction reprenne aux États-Unis. Il faut agir. Atteindre de nouveaux marchés et développer de nouveaux produits pour prendre notre place dans un monde nouveau.

He doesn’t get what autoworkers in Windsor and Oshawa know—that we’re not just going to have to win back customers; we’re going to have to re-invent the car, with brand new technologies and brand new environmental standards.

He doesn’t get what the people of Sudbury know—that when our workers and our industries are under threat—when the choice is between defending Canadian jobs and Canadian technology—we need a government that will defend our interests.

Stephen Harper doesn’t get it. We do.

For more than a century, we’ve built our prosperity on our natural resources. But if we’re to prosper in the next century, we have to turn our resources into products and technologies the whole world wants to buy.

We can’t get there unless we have the vision and ambition to build a competitive, compassionate future for Canada.

We can’t get there unless we open up new markets for Canadian exports in countries like China and India.

We can’t get there with Stephen Harper.

Stephen Harper has been prime minister for four years, and he’s never visited China. We’ll be there next week. After that, we’ll plan a trip to India.

That’s where we need to be as a country—if we want to secure markets for the next generation of our exports—if we want to compete with the best in the world—if we want to get out of the trade deficit the Conservatives have created, the first in thirty years.

We can do better.

Nous pouvons faire mieux.

L’été prochain, le Canada accueillera le Sommet du G8 à Huntsville.

Ce sera une occasion de démontrer le leadership canadien et de contribuer à définir les priorités mondiales. Paul Martin et Jean Chrétien représentaient ce leadership canadien capable d’influencer le monde.

Stephen Harper n’a même pas encore de liste d’invités.

A Liberal government would invite new members to that meeting.

We’d use Canada’s G8 Summit to begin the process of evolving the G8 to a G20, as the world’s steering committee.

We cannot make progress on global challenges without China or India at the table.

Le G8 a bien fait ce qu’il avait à faire. Mais le monde change.

Plutôt que de résister au changement, le Canada devrait inspirer le changement.

Nous pouvons convaincre nos partenaires d’avoir une gouvernance mondiale plus efficace, avec un forum plus représentatif du monde d’aujourd’hui. Nous devons reprendre ce leadership mondial qui a fait la réputation du Canada depuis Lester B. Pearson.

Nous devons être prêts à renforcer le G20 en finançant et en accueillant chez nous le Secrétariat permanent du G20.

A Huntsville, le Canada pourrait proposer des mesures concrètes pour créer un nouvel encadrement de la réglementation financière. Comme ça, le Canada pourrait assurer que l’effondrement de l’an passé ne se reproduise pas.

Canada can lead in a changing world, but only if we dare to act. Stephen Harper wants to keep us on the sidelines.

We can do better.

Stephen Harper hasn’t just failed to stand up for Canada—he’s also failed to stand up for Canadians.

Suaad Mohamud. Omar Khadr. Makhtal. Bahari. Mohamed. Abdelrazik.

Being a Canadian must mean the Canadian government will stand up for you—no matter where, no matter when. This is at the heart of what every Liberal believes: a Canadian is a Canadian is a Canadian.

A Liberal government would stand by the Charter of Rights and Freedoms.

We would stand by our citizens.

And we would bring forward legislation to protect Canadians abroad—to make it illegal for the government to pick and choose which citizens it protects—to make sure these abuses never happen again.

Stephen Harper leads a government that doesn’t care. A government that doesn’t believe in government. A government that refuses to govern—even in a crisis.

Let’s remember how we got here.

A year ago this month, Stephen Harper told Canadians there wouldn’t be a recession in this country. He said a slumping stock market meant “good buying opportunities,” but no cause for alarm.

Last November, he presented a partisan economic statement that triggered a political crisis.

And Stephen Harper escaped defeat only by shutting down Parliament.

In January, we put Stephen Harper on probation – and we’ve kept him on life support ever since.

We forced his government to accept the toughest accountability standards in the G8—with full budget reports to Parliament each quarter.

After a disappointing June report, we set out four simple benchmarks Stephen Harper would have to meet.

Premièrement, nous avons dit que nous étions prêts à travailler avec Stephen Harper pour rendre l’assurance-emploi équitable pour tous les Canadiens, où qu’ils vivent, et aussi longtemps que durerait la crise.

Pas une proposition n’est venue. Rien que des manigances politiques.

Second, we demanded straight answers about job creation and infrastructure stimulus.

Plutôt que de répondre, Stephen Harper a passé l’été à tenter de cacher son incompétence ; il a annoncé, annoncé et annoncé encore des projets qui auraient dû être en chantier depuis des mois.

In fact, only two hundred of the twelve hundred infrastructure projects that the Conservatives announced in Ontario have actually received the funding they were promised. Only Stephen Harper could count that as 80% underway.

Third, we demanded a credible plan to get Canada out of deficit.

Stephen Harper’s response has been: “Don’t worry, give it a few years, and the books will balance themselves.”

You can put that next to his promise not to run deficits in the first place.

Or his promise not to tax income trusts.

Or his promise not to appoint Senators.

Pendant une décennie, sous des gouvernements libéraux, le Canada menait le monde dans la réduction de sa dette nationale. Nous avions le meilleur bilan financier du G8.

Les Conservateurs nous ont fait replonger dans le rouge... avant même que la récession commence.

Maintenant, ils ne peuvent même pas nous dire la profondeur du trou dans lequel ils nous ont mis. Et encore moins comment ils vont nous en sortir.

Ça ne suffit pas.

We’ve had four years of this—four years of a government that mismanages our public finances, and a prime minister who divides the country to score political points.

You can’t count on a government that can’t count—and a prime minister who’s only good at division.

Finally, we demanded a plan to deal with the health care crisis.

Twice on Stephen Harper’s watch there’s been a breakdown in the supply of medical isotopes.

Instead of acting, what did Stephen Harper do? He fired the whistle-blower on isotopes. Then he cancelled the MAPLE reactors that would have guaranteed Canadian leadership in isotope supply.

Two years later, he finally revealed his plan: To get out of nuclear medicine and let the provinces pick up the difference.

That’s not good enough for the tens of thousands of Canadian families waiting for cardiac and cancer care for their loved ones.

And that’s not good enough for the millions around the world, who have relied on Canadian leadership for half a century.

It’s simply unacceptable to have the world ask: “Where’s Canada?”

We can do better and we will do better.

A Liberal government will restore Canadian leadership. We’ll stand up for Canadian research and Canadian families. We’ll stand up for Canadian know-how and ensure the world never asks again “Where’s Canada?”

À l’heure où les Américains veulent un système de soins de santé public, Stephen Harper ne lève pas le petit doigt pour protéger le nôtre.

Les libéraux sont fiers du système canadien de soins de santé et, contrairement aux conservateurs, nous allons le défendre et le protéger.

Liberals proudly support public health care in this country—and, unlike the Conservatives, we’re not afraid to defend it.

In June, we set out four tests for Stephen Harper.

Mr. Harper, you have failed all four.

You’ve failed to protect the most vulnerable. You’ve failed to create jobs. Failed to defend our health care. Failed to restore our public finances.

After four years of drift, four years of denial, four years of division and discord—

Mr. Harper, your time is up. Vous avez raté votre chance.

The Liberal Party cannot support this government any further.

We will hold it to account. We will oppose it in Parliament.

En juin, nous avons fixé quatre conditions pour que Stephen Harper conserve notre confiance.

Il n’en a respecté aucune. Son échec est complet.

Il n’a pas réussi à protéger les plus vulnérables. Il n’a pas réussi à créer des emplois. Il n’a pas réussi à défendre notre système de santé. Il n’a pas réussi à rétablir nos finances publiques.

Après quatre ans de dérapage, de déni, de division et de discorde... le temps de Stephen Harper est terminé.

Le Parti libéral du Canada ne peut plus soutenir ce gouvernement incompétent.

Stephen Harper doit rendre des comptes. Désormais, nous nous opposerons à lui.

Et si des élections ont lieu, nous serons prêts à offrir à notre pays un avenir meilleur.

Canadians deserve better.

Over the past days and weeks, I’ve heard from our caucus, and we’ve all heard from Canadians: Our job as Liberals is to give them a choice.

A choice between two parties. Two sets of values. Two visions for Canada.

Un choix entre deux partis. Entre deux ensembles de valeurs. Deux visions du Canada.

We can choose a small Canada—a diminished, mean, and petty country. A Canada that lets down its citizens at home and fails them abroad. A Canada that’s absent on the world stage.

That’s Stephen Harper’s Canada.

Or we can choose a big Canada. A Canada that is generous and open. A Canada that inspires. That leads the world by example. That makes us all proud.

2017 will be our 150th birthday. We can be the smartest, healthiest, greenest, most open-minded country there is—but only if we choose to be.

We can build a Knowledge Society, from pre-school to post-secondary, with quality early learning and childcare for every Canadian child.

We can ensure that every Aboriginal Canadian gets a world-class, not a second-class education—with the opportunities to match.

Nous pouvons créer les emplois de demain en investissant plus, pas moins, dans la science et l’innovation.

Nous pouvons investir dans l’environnement et inventer les technologies vertes qui vont changer le monde.

We can invest in our environment—and invent the clean energy technologies that will have the world beat a path to our door.

That’s our Canada. A liberal Canada.

Le Canada dans lequel nous croyons. Le Canada qui nous attend. Mais seulement si nous osons. Seulement si nous faisons les bons choix.

Avec l’intelligence, la compassion et le leadership du Parti libéral du Canada, nous pouvons y arriver.

So let’s get started.

Allons-y. Notre pays nous attend.