Jeffrey Simpson is totally blind to reality and the facts on the ground.

In his Globe article today entitled “Branch plants ‘R” us”, Jeffrey Simpson proves himself to be blind to reality and incapable of linking cause with effect. What’s the point of bemoaning the takeover of Canada by foreigners without identifying the causal underpinnings of such a devastating trend or prescribing solutions? This is like going to see your family doctor and only receiving pity rather than the cure that you were seeking.

Jeffrey Simpson also demonstrates his total lack of knowledge of capital markets in general along with the specifics of the main example he is citing, namely the takeover of Inco by Brazilian company Vale. What Jeffrey Simpson fails to understand or acknowledge is that Brazilian company Vale structured their purchase of Inco as a private income trust, that under today’s rules allows Vale to strip the earnings of Inco out of Canada with no tax paid in Canada, no 31.5% tax, no tax paid on the interest that services this takeovers purchase and only a 15% withholding tax paid on the earnings received by Vale. Under this arrangement, Vale had a two and half year pay back on their investment in Inco, meaning that anything they receive from this investment beyond the first two and half years is “found money’. No wonder that Vale is so indifferent to resolving the strike in Sudbury that has been going on now for 9 months, as their investment in Inco has a cost base to them of ZERO. Why would they feel the need to rush to the bargaining table to resolve a strike involving a bunch of laid off Canadians, when Vale’s goal in life in to maximize their world wide portfolio of mining assets and not the Sudbury operations of Inco?

And what does the completely misinformed Jeffrey Simpson write about what Vale paid for Inco....he claims that Vale “overpaid” for Inco and that is the reason he advances for Inco’s woes when in fact the price that Vale paid for Inco is ZERO, at this point in time.....ooops!

All of these known facts, Jeffrey Simpson is oblivious to as he spins his own version of events that better conform with his jaded world view, displaying his complete misunderstanding of the situation.

Also Jeffrey Simpson is completely oblivious to the fact that Scott Hand, former CEO of Inco, had been contemplating the conversion of Inco into a publicly listed income trust as his defense strategy before events spiraled out of control and he was left with no room to manoeuvre and insufficient time to pursue that option. That option would have meant that Inco would have been Canadian owned and broadly held. Inco would have attained its highest possible market value, and therefore would have a form of built in takeover immunity., Inco’s fate would have been in Canadian hands and the decisions facing Inco operations would have been made in the context of Sudbury’s production, versus Sudbury’s production as merely a part of Vale’s worldwide operations , and as a public income trust Inco’s management would seek to optimizing results for Sudbury as opposed to Sudbury as a mere subset of Vale, which would mean there workers would not be on strike and would not be out of jobs. Inco as a public income trust would have also meant the collection of massive tax revenue to Ottawa as opposed to a pittance, and would have meant Sudbury workers would be gainfully employed as opposed to collecting Employment insurance and social assistance.

This is everything that Jeffrey Simpson and the Globe and Mail FAILS to report on as the FACTS of the situation. Having then failed to report on the true FACTS of the situation, Jeffrey Simpson then fails to even report on a cure or the fact that NO OTHER POLICY that this country has done in the last 150 years has done more to turn Canada into a “Branch plants ‘R” us” than Stephen Harper’s income trust tax that has, to date. Caused 51 Canadians businesses to be taken over, causing more branh plants than any other policy and costing Canadians to lose $1.5 billion in annual tax revenue. And what does Jeffrey Simpson have to say about that? Squat.