Freedom FROM information

Image: One of the recalled documents that Flaherty did not want to be in the hands of Canadians. Click on image to enlarge

Too much information in the hands of the people is a dangerous thing....even blacked out documents. The Liberals could have had a field day over this, but did not. Why not?

Ottawa seeks return of trust tax documents
STEVEN CHASE

Globe and Mail
April 20, 2007

OTTAWA — The Harper government is asking a Calgary income trust analyst to give back heavily censored documents Ottawa sent him that detail calculations used to justify last fall's controversial trust tax.

Warning that its lawyers have decided the information is top secret, Ottawa is also requesting that BMO Nesbitt Burns analyst Gordon Tait stop sharing this information with other Canadians.

It's hard to see how Ottawa benefits from recouping the documents, which summarize how it calculated that trusts are costing it hundreds of millions of dollars in annual lost tax revenue.

That's because nearly half of them are blacked out by a federal Finance Department censor's pen.
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Mr. Tait made news headlines this year after he requested details from Finance Minister Jim Flaherty's department on how it determined that trusts were a drain on federal coffers.

In response, Finance sent him 28 pages, 13 of which were heavily blacked out. These appeared to detail the calculations and methodology used.

Now the Finance Department wants about 18 of those pages back.

“Subsequent to the Department of Finance's ... release of information to you, the Privy Council Office Counsel has confirmed that portions of the released information, namely 1-5 and 9-21, are confidences of the Queen's Privy Council for Canada,” a Finance official wrote in a letter to Mr. Tait this week.

“We would like to ask for your assistance in returning these pages and also that this information not be disseminated further.”

The letter has left Mr. Tait scratching his head because he and other trust advocates have already widely circulated the heavily excised documents.

“It's a bizarre situation. They're trying to put the toothpaste back into the tube,” he said, adding that he's learned that other Canadians are receiving similar letters asking them to relinquish documents.

Mr. Tait said he will return the original documents, but will warn Ottawa that “I and thousands of others have copies of this.”

He said most of the pages that Ottawa wants returned are heavily censored. “It's a request for information that was never divulged in the first place,” Mr. Tait said, however adding that the largely blacked-out pages nevertheless reveal some details of the methodology used in calculations.

The Finance Department did not immediately return phone calls.

Tax revenue losses were central to Mr. Flaherty's rationale for breaking a Conservative election promise and slapping a levy on trusts.

He justified the new levy last Halloween by saying that annual tax leakage was already $500-million and would have risen to $800-million had BCE Inc. and Telus Corp. converted to trusts.

Income trusts pay little or no corporate tax, instead shovelling out the bulk of earnings to investors, who are taxed individually. Ottawa says it never recoups all the tax these businesses would have paid had they been structured as corporations instead of trusts.

Trusts have produced experts to counter Ottawa's tax leakage estimates, but Mr. Flaherty has steadfastly defended his department's calculations, which suggested losses for the federal government and provinces could exceed $1-billion.

The Finance Minister had also warned that tax revenue hemorrhaging would only grow if left unchecked until it threatened the federal government's ability to fund priorities such as health care, education and infrastructure.