Castlegar News

Thursday February 11, 2010

Marshall Plan Needed

On October 31, 2006 Mr. Flaherty, our Minister of Finance, declared that the Federal Government would start double taxing Income Trusts beginning in 2011, as he claimed that income trusts were a source of tax leakage. When asked to supply a proof of tax leakage he produced 18 pages of blacked out documents, which is proof of nothing except the government's non-accountability.

Since then, 51 trusts have been taken over by foreign entities, e.g. Harvest Energy was taken over by the state owned Korean National Oil Company. These groups pay little or no tax to Canada while income trust investors did pay significant tax on these businesses earnings at an average rate of 38%. Income Trust investors (in their RRSPs) will now be taxed an extra 31.5 % over and above what they pay now. A double taxation for average Canadians, whereas pensions do not. It has been estimated that as a result of these takeovers to date, Canada will lose $1.5 billion dollars in annual taxes, which is three times the size of the alleged tax leakage at the outset.

There are now 169 income trust businesses left, on whose earnings Canadian investors pay $6 billion in annual taxes to Revenue Canada. In order to save these businesses from a similar foreign takeover threat, an innovative proposal has been made for Stephen Harper to adopt in his upcoming Budget 2010. This proposal, known as the Marshall Plan, has been hailed by Diane Frances ( Editor-at-Large with the Financial Post) as a "brilliant" solution that would lead to a win-win situation for the Canadian government and all Canadian taxpayers If implemented, the Marshall Plan will preserve $6 billion in much needed tax revenue to help address Canada’s deficit crisis and will preserve an essential investment for the 75% of Canadians without pensions., thereby addressing Canada's pension crisis as well. More information about the Marshall Plan solution can be found at MarshallPlan.ca

Stephen Harper prorogued Parliament, saying that he needs to focus on the economy and recalibrate his policies. Never could a decison be easier to make that this one. Failure to adopt the Marshall Plan in Budget 2010 will mean the cetrtain loss of $6 billion in taxes and the equivalent of 2.5 million job losses, as the income from these essential investments is the equivalent of either a part time or full time job for the 2.5 million investors who, like me, are dependent on this income to provide for the necessities of life.


- Robert Bertuzzi