For those of you who do not yet understand the linkage between Canadians’ financial literacy (actually the lack thereof) and its essential role played in expropriating choice under Jim Flaherty’s income trust tax, we have the following observation from Jacques Menard, Chairman of BMO Nesbitt Burns and Vice Chair of Jim Flaherty’s Task Force on Financial Literacy that appeared in yesterday’s Globe and Mail:
"You can help people but you cannot be so intrusive as to invade their privacy and expropriate their freedom of choice."
One of the four things that I find most objectionable about Jim Flaherty’s income trust tax is that it expropriates choice. The other three being that (1) it was based on the patent lie called tax leakage and therefore a total affront to the basic tenets of democracy, (2) it caused investors to lose $35 billion of their investment value and (3) all of its predictable consequences were destined to be adverse.
Expropriating choice was the main goal of Jim Flaherty’s income trust tax. Jim Flaherty would exploit Canadians’ financial illiteracy as the means to pull off this policy stunt by invoking patently false arguments like tax leakage and a handful of other spurious claims to pull off this expropriation of choice. These patently false arguments that exploited Canadians lack of financial literacy (especially those in the press) were then reinforced with 18 pages of blacked out documents as the form of “proof”, demonstrating the paramount importance of financial disclosure in combating those like Jim Flaherty who seek to exploit Canadian’s financial illiteracy for their own illicit purposes.
Whereas Jim Flaherty’s income trust tax caused Canadians to lose $35 billion of their life savings and was confined to “only” the 2.5 million Canadians who owned income trusts at the time, the expropriation of investment choice it brought about is of inestimable cost and affects ALL Canadians adversely, especially the 75% of Canadians who are without pensions. The means to that nefarious end of expropriating choice was to exploit Canadians financial illiteracy and to deny them access to the facts. The media played an essential role in promulgating these patent lies, including the CBC as recently as February 25, 2010.
These 75% of Canadians who are without pensions are a highly vulnerable group in more ways than one. Apart from having to rely solely upon themselves for their retirement security, they are also the targets of every lobbyist out their who has designs on their retirement savings. Lobbyists like those from the insurance industry who would love to get their hands on this pool of investment capital in order to derive a fee stream from it. Those like Don Stewart, CEO of Sun Life who also happens to be the Chair of Jim Flaherty’s Task Force on Financial Literacy who was advocating that a form of “negative billing” is the answer to Canada’s pension woes, in which he is advocating that:
“"There are simple ways of setting up behaviour patterns that reinforce personal financial interests as opposed to detracting from them," said Mr. Stewart. An example: Employees are much more likely to opt in to a corporate pension plan if the company automatically enrolls them and requires them to fill out a form to opt out.”
Gee, I wonder who that change is intended to benefit more, Sun Life as manager of that employee’s pension or the employee themselves? The insurance industry was a main driver behind Jim Flaherty’s income trust tax and the insurance industry’s sole intent was to limit Canadians investment choice, employing whatever spurrous argument were at their disposal, including patently false arguments like tax leakage, in order to make Canadians more captive to the synthetic and derivative investment products of the life insurance industry, like Variable Rate Annuities, of the kind that Manulife failed to hedge and which almost brought Manulife to its total financial demise during the Global Financial Meltdown.
It should not be the role of government to restrict Canadians suite of choices, but rather to maintain them at all costs and to expand them whenever possible. The emergence of income trust form of investment CHOICE was the manifestation of the Canadian capital markets functioning as it should and evolving its product offerings to meet the changing needs of Canadian investors. The profound need for retirement income during a time of protracted low interest rates saw to the evolution of the income trust form of investment that had grown into a $200 million made in Canada solution in the space of 10 short years. The advent of the income trust market meant that the corporate model was being threatened and the investment wares of the insurance industry were unable to compete. Therefore these parties turned to the Government to expropriate this investment choice. Jim Flaherty and the Government concocted a series of patently false and spurious arguments and exploited Canadians’ (including the media) lack of financial literacy to pull this expropriation of choice off.
Why Jim Flaherty would want to improve Canadians’ financial literacy is beyond me, as Canadians’ lack of financial literacy is the one sure thing that Jim Flaherty is best able to exploit in order to make his gross incompetence on financial matters passable and allow him to pull the wool over Canadians eyes. You shouldn’t feel left out however, as I think the same exploitation of financial illiteracy is at play within the Flaherty household itself, as follows:
Globe and Mail April 14, 2010: “But the Minister isn't sure that he has passed those lessons on to his 19-year-old triplet sons. "They won't like me saying this, but they're among the group that could increase their financial literacy." Mr. Flaherty said.”
Which probably explains how Flaherty was able to pull the following off, by exploiting his son’s lack of financial literacy, and sell him a pack of lies about tax leakage etc.:
Globe and Mail October 2, 2007: “"And these guys are not lacking in opinions," Mr. Flaherty adds.
Even about the income trust decision?
"I was actually very interested," offers Galen, brightening up. "I read a lot of articles about it and then I asked my dad and, at the end of it, I was actually in full support of my dad."
Mr. Flaherty smiles, then looks at his wife. "What's his allowance again?" asks the family finance minister.
Thursday, April 15, 2010
Posted by Fillibluster at 8:09 AM