Harper's actions increasingly making him the target of ridicule

I have always thought public ridicule to be one of the most effective means to bring about public change, especially where politicians are concerned. Not so sure that applies to Stephen Harper, as he seems to defy all logic. However, I think it is well worth the try now that more Canadians are realizing was a "shifty large lump" Harper truly is. Another recent example would be this YouTube video Harper  Gangnam Style.  Actually in Harper's case, it's more like Gangland Style, the examples of which are too numerous to mention.

Connecting the dots: Was Mark Carney involved in the income trust leak that cost the Liberals the 2006 election?

In view of the cosy relationship that we've learned exists between Mark Carney and Liberal MP Scott Brison, it is worth examining whether Mark Carney had a role in the income trust policy leak that cost the Liberals the 2006 election.

Dot 1:   Mark Carney and Scott Brison have been friends since approximately 2002.

Evidence: A statement dated December 17, 2012 from Jeremy Harrison, a spokesman for the Bank of Canada reads:: "Mr. Brison and Governor Carney are personal friends, and have been so for about a decade"

Dot 2:  Mark Carney was the central individual in the Department of Finance in 2005 responsible for the income trust file, whilst Ralph Goodale was Finance Minister

Evidence: In testimony before Parliament December 5, 2007,  in response to MP Garth Turner's question: "Mr. Carney, you've been called the architect of the Conservative

government's income trust strategy, and I'm wondering if that's a fair characterization?", Mark carney stated: 

    " I was a senior public servant, as you know, in the Department of Finance. Quite frankly, I was a senior public servant under the previous Liberal government and under the current Conservative government. I ran the last five budgets and all tax decisions that were put forth by both governments. I think it's safe to say I was involved, yes."

Dot 3:  Ralph Goodale stated  that he would be making an announcement at the close of the markets on Wednesday November 23, 2005 concerning the tax treatment of income trusts. This was a highly anticipated announcement and it was uncertain which direction the government would take. Whatever the announcement it would have enormous financial impact either way.  However it became obvious from trading prices and trading volumes that the substance of what Ralph Goodale was going to announce had somehow been leaked into the market ahead of the announcement, allowing certain market participants to financially benefit to the detriment of others.

Dot 4:  On the morning of November 22, 2005, the day before Goodale's announcement,  Scott Brison sent an email to Dan Nowlan, a senior investment banker at CIBC who was responsible for CIBC's overall income trust underwriting activity, and Brison stated that Nowlan would be pleased with the government's decision, a decision that had yet to be made known to the public. As someone involved in underwriting new income trust financings, that could only mean that Goodale's announcement would favour income trusts.

This type of activity is a text book case of "tipping" on Scott Brison's part and would have constituted insider trading had Dan Nowlan acted upon it.

In defending himself, Scott Brison stated in a March 2006 Globe article  that he had neither advance knowledge of Goodale's decision, nor was he speculating.  That's kind of remarkable claim, as there is no middle ground. Scott Brison was either speculating in his email to Dan Nowlan or he knew? Which was it? The more plausible explanation is that Scott Brison knew what Goodale was going to announce. How did Scott Brison know? Given that Ralph Goodale subsequently claimed that the only two MPs who knew the policy substance of what he was about to announce concerning income trusts was himself and Paul Martin, then where would Scott Brison have garnered his insights? Again the most plausible explanation would be that Scott Brison got his insight from someone working on the file inside the Department of Finance, and who more likely than Mark Carney who after all was the senior person in Finance running the file and was a personal friend of Scott Brison's?

Mark Carney's role in all of this is speculative, but clearly Mark Carney has shown bad judgement in the past when it comes to his dealings with his friends in public office, as witnessed recently.

The only person charged by the RCMP after their criminal investigation, interestingly enough, was another senior Department of Finance official, Serge Nadeau who had purchased income trusts immediately in advance of the announcement. knowing they would increase in value upon the announcement.

One thing however that is not speculative is that the obvious leak the took place in advance of Ralph Goodale's income trust announcement, had a huge impact on the marketplace, and ultimately and even greater impact on the 2006 election.  The Liberals ended up losing the 2006 election when they went from being 4 points ahead in the polls to 4 points behind in the midst of the election, when the RCMP sent a letter to NDP Finance Critic Judy Wasylycia-Leis  stating that  that they were launching a criminal investigation into the income trusts policy leak and named Ralph Goodale in that letter.

Flaherty's GM fail

Interesting that on the same day that GM announces that it's shifting future Camaro production from Oshawa to a plant in Michigan, they also announce that they're buying back $5 billion in stock from the US government....and not Canada.

Bottom line, Canada helps funds the bailout of GM, but gets none of the benefits, showing what a pathetic negotiator Jim Flaherty is. This is Flaherty's idea of an economic action plan?

Dear British Parliamentarian

Re: Disturbing Information regarding Mark Carney, Governor-elect of the Bank of England

I understand that British Parliamentarians will be holding a pre-appointment hearing for the proposed appointment of Mark Carney to Governor of the Bank of England. I have disturbing information concerning Mark Carney's past performance in public service that is highly relevant to those hearings.

Prior to his appointment as Governor of the Bank of Canada in October 2007, Mark Carney served for approximately four years in Canada's Department of Finance (Finance) and prior to that with Goldman Sachs.

During his time in Finance, Mark Carney was put in charge of the Income Trust file. Income Trusts were a form of investment vehicle that had become popular with Canadians seeking retirement income, during a period of protracted low interest rates which had made it difficult otherwise to generate retirement income. Think of income trusts as a form of profit sharing investment vehicle in which the profits from businesses are distributed monthly to investors, taxed in their hands and then immediately redeployed into the economy in a myriad of ways, principal of which are reinvestment and consumption.

The discipline of distributing business earnings in this fashion made income trusts popular with investors, however less popular with corporate CEOs, as the corporate governance of these businesses had now shifted away from CEOs to investors (as it should be) and served to eliminate  and/or lessen the abusive compensation practices adopted by CEOs under the traditional corporate model when converted to the new income trust model.

The conflict that arose in the Canadian capital marketplace between the interests of investors and the self interests of CEOs was something the CEOs sought the Government's assistance on, and the CEOs intense lobbying of Government found a willing accomplice in the form of the ambitious former Goldman Sachs employee within Finance, namely Mark Carney.

It is the primary responsibility of CEOs to maximize value for their shareholders in everything they do, and yet here we have a situation where these CEOs were banding together to lobby the Canadian government to shut down the income trust model, which had proven itself as the preferred means for shareholder to achieve maximum value.

To justify legislation to shut down income trusts required a form of rationale that made such action sound plausible and just to the Canadian public at large. Unfortunately there was no sound rationale to justify such action, so the devious public servants in Finance headed by Mark Carney fabricated a rationale. Mark Carney argued, falsely, that income trusts were causing a loss of tax revenue to the government and were damaging to the economy. Both of these claims are completely false and artificial, as refuted by every credible study that has been conducted on these matters by leading organizations like Price WaterhouseCoopers, The Royal Bank of Canada, Bank of Montreal, HLB Decision Economics, etc.

To make the false argument that income trusts cause tax leakage, Mark Carney resorted to quack economics in which he arbitrarily excluded the taxes that the government receives from income trusts held in deferred retirement savings accounts, an analytical framework that  is totally contrary to sound public policy analysis and against the Accrual Accounting Basis that the Government of Canada is required to perform by the Auditor General when preparing its financial records and statements.

Had Mark Carney properly included these taxes, rather than arbitrarily excluding them, then the conclusion of his tax analysis would have been the exact opposite of what he told the Canadian public. As such there would been no economic rationale for his policy, the sole purpose of which was to appease the CEOs who lobbied the Government against the interests of their shareholders and all Canadian taxpayers.

Mark Carney had argued (or used surrogates to make the point) that income trusts were causing the Government to lose billions in tax revenues, when in fact income trusts were enhancing the tax collection on business earnings. Mark Carney used this false and fabricated rationale to justify the imposition of a new 31.5% tax on income trusts, the sole purpose of which was to kill the investment vehicle, which it did. The new tax had an immediate impact of the market value of income trusts, which resulted in Canadians losing $35 billion (yes, billion) of their hard earned retirement savings.

Furthermore, these Canadian businesses that had formed themselves as income trusts (some $200 billion) immediately became highly vulnerable to foreign takeover, as their market valuations had plummeted, and Mark Carney's policy put foreign investors (like Goldman Sachs) at a distinct economic advantage to Canadians. As surely as water flows down hill, so too did the wave of foreign takeovers of Canadian income trusts, the net effect of which was a drain of over $1 billion in annual tax revenue to the Canadian government.

In summary, Mark Carney used his public office and the public trust that is esconced in such an office to personal advantage (i.e. career advancement)  by championing the selfish cause of Canadian CEOs (who were his former investment banking clients at Goldman Sachs) and to the economic advantage of his former employer, Goldman Sachs, and against the interests of Canadians at large by adopting a policy on the false premise that it would alleviate the alleged loss of tax revenue to the Canadian government (which was non-existent) only to create a loss of tax revenue that is real.

Such a public policy outcome is the product of either gross negligence or gross conflict of interest. Either way, it was the product of Mark Carney, Govenor-elect of the Bank of England.

Yours truly,

Brent Fullard
President
Canadian Association of Income Trust Investors
www.caiti.info

Carney? Criticised? Can't be!

It seems the impeccable Mark Carney isn't so impeccable after all. Boy Wonder is now coming under criticism for alleged conflict of interest in several news articles over the weekend, like this one in MacLeans entitled The Carney affair with the Liberal Party: It will all end in tears , or the Sun article entitled Recent controversy colours Carney's career.

Conflict of interest is nothing new to Mark Carney, in fact "conflict of interest" defines Mark Carney's time in public life from the get-go, starting with his role in the Department of Finance (prior to his appointment as Governor of the Bank of Canada).

In the Department of Finance, Carney was responsible for the "income  trust" file. Think of income trusts as the equivalent of a profit  sharing investment vehicle that was popular with Canadians seeking  retirement income. Income trusts, were however, not popular with the  CEOs of Canada's large corporations (many of whom were Mark Carney's former/prospective clients while at Goldman Sachs), since income trusts placed corporate governance in the hands of investors (as opposed to CEOs) and served to lessen the abusive compensation earned by CEOs.

This friction between investors and CEOs came to a head in 2006 and CEOs lobbied the Canadian government to shut this form of investment vehicle down (against the interests of their shareholders). Under Mark Carney's directive, the government sided with his former/prospective clients, the CEOs. To bring about the CEOs desire to kill income trusts, Mark Carney resorted to the completely false (and hence fraudulent) argument that income trusts were causing the government to lose tax revenue (when income trusts actually enhance the gov't's tax collection).

This is where Mark Carney proved himself to be guilty of gross conflict of interest, because the policy that he championed caused 2.5 million Canadians to  lose $35 billion (yes, billion) of their hard earned life savings, and all Canadians to lose an essential retirement income investment vehicle, when the government announced a double taxation of income trusts.

Mark Carney's policy was premised on a total falsehood (alleged tax  leakage) and caused a major loss to investors, while advancing the narrow interests of Corporate CEOs, who were his clients and prospective clients while he worked at Goldman Sachs.

Mark Carney = Gross conflict of interest.

I wonder what policy scams he'll will hoist on British citizens?

Canada's Industry Minister is not even one question deep on major file

Paradis says it's now up to China to explain deal to Canadians

CTVNews.ca Staff

Sunday, Dec. 9, 2012 9:00AM EST

Canada’s Industry Minister is remaining tight-lipped over the specific "net benefits" Canadians can expect in exchange for the sale of Alberta-based oil and gas company Nexen to a Chinese state-owned oil enterprise.

Prime Minister Stephen Harper announced Friday his government is giving the green light to the controversial $15.1-billion takeover of Calgary-based Nexen Inc. by China National Offshore Oil Co., but made it clear that such deals will only be allowed under "exceptional circumstances" in the future.

Ottawa also approved Malaysian state-owned company Petronas’s $6-billion purchase of Calgary-based Progress Energy.

In an interview with CTV’s Question Period Christian Paradis touted his government’s handling of the $15.1-billion deal between CNOOC and Nexen, but would not say whether the state-owned enterprise had sweetened the deal before the Harper government signed off.
"The idea here was to make sure we heard what the Canadian concerns were, to make sure that we had significant undertakings in terms of governance, transparency and disclosure, and compliance," Paradis said.

Prior to Harper’s announcement, the Chinese state-owned CNOOC had made public a commitment to keep Nexen’s management board Canadian, and keep its head office in Calgary.
Paradis did not say whether any environmental guarantees were given by CNOOC or requested by Canada.

Paradis said he was "not allowed" to go public with the details of what is a commercial sale, indicating that it is now up to China to reveal so-called benefits to Canadians.
"What we have to be clear about is the structure of the industry didn’t change," Paradis said.
The minister said Ottawa made "clear signals" that the Nexen and Progress deals are where Canada draws the line, and that Canada is open for investment with foreign companies, but not for sale to foreign governments.

Harper had said under major changes to policies under the Investment Canada Act, all state-owned enterprises looking to buy Canadian companies will face greater scrutiny.
Many critics have concerns about national security issues and China’s record when it comes to labour rights.

The Canadian Security Intelligence Service had previously expressed concerns over foreign investment by state-owned companies, although it did not single out specific countries as potential threats in its annual report.

But the prime minister said that all deals involving foreign companies, regardless of whether they are state-owned or not, are subject to a national security test.
"These transactions have been assessed according to that review and do not raise any concerns," Harper said.

Canada's new foreign takeover policy: Harper channels Goldilocks and the Three Bears

In describing the totally incoherent logic behind Stephen Harper's approval of the Nexen acquisition by China, Andrew Coyne writes:

"As Harper explained, the current amount of state ownership in the oil patch, as of 5:15 p.m. Eastern Standard Time, in just right. But anything more would be too much"

How's that for fairy tale logic? Goldilocks for Prime Minister! The Three Bears for Cabinet Ministers! Our fairy tale future is secure!

The facile nature of Stephen Harper on full display.