What is a job, if not a stream of INCOME, in return for work invested by Canadians in the Canadian economy?
What is an income trust, if not a stream of INCOME in return for money invested by Canadians in the Canadian economy?
For the 2.5 million Canadians who wisely invested in profit sharing income trusts ( rather than some synthetic derivative investment like Manulife’s (unhedged) Income Plus or some ABCP house of cards), owning a diversified portfolio of INCOME trusts was like having one of the most secure jobs in Canada. Almost like being an MP or an unelected Senator, but on a much smaller scale.
For some, this income stream represented a part time job, that gave them discretionary income to improve their standard of living, send their kids to college, help pay for their parents retirement home costs, etc. In less than year’s time, these people have received there MASS LAYOFF NOTICES from Stephen Harper and Jack Layton and will lose this stream of income as these trusts get taken over by pension funds who are exempt from the tax, or foreigners like state owned Korean National Oil Company whose desire to make Korea more energy self sufficient appears to be more important to Ottawa than Canadians having the stream of income they need to live on? Hello NDP?
For others, and probably the vast majority of INCOME trust investors, INCOME trusts represent a full time job, as the INCOME from their profit sharing income trusts are the sole means of their daily survival and standard of living.
Don’t take my word for it, Read the comments from Canadians across the country who are deeply afraid and frightened by the “job losses” that are before them caused by Jim Flaherty’s callous recklessness, not to mention incompetence and deceit, by going to : http://marshallplan.ca/index.html
There you will see comments like this:
“When the income trust tax proposal becomes effective in 2011, I believe the cash flows from these investments will dissipate and I will be left with no viable investment alternatives. This will result in insufficient funds for my wife and me in our retirement years. There are many hundreds of thousands retirees in the same position as I, who would like to see this unjustifiable income trust tax proposal revoked.’
And this:
“Income trusts are the only way we can support ourselves in retirement. If the government approves The Marshall Savings Plan it will at least give many of us a chance of financial freedom instead of personal bankruptcy.”
And this:
“Canadians need Income Trusts as an investment choice. There is no honest or reliable return on capital by any other investment. Most retirees do not have pensions and when one considers the "Baby Boom" generation, there's going to be a disastrous decline in the standard of living as they retire. This will negatively affect the economy beyond all belief. As GDP falls, so will government tax revenue. The Marshall Plan is all the "stimulus" that is required and it costs nothing. Wow! Who can't get their head around that?”
All of these people’s income is going to fall off the cliff in LESS than a YEAR”S time! Do people not know how devastating that will be for these people as well as the ENTIRE Canadian economy? In today’s Globe, Flaherty is getting advice in the headline article of the Report on Business that:
Flaherty urged to keep spending taps open
Jeremy Torobin and Tavia Grant
Globe and Mail
February 2, 2010
Ottawa, Toronto —
Canada's leading private economists are urging Finance Minister Jim Flaherty to tread a cautious path in his March budget and keep spending flowing in a fragile recovery.
At a meeting in Ottawa on Tuesday, the economists will suggest Mr. Flaherty look past some of the better-than-expected data in Canada and the United States and resist moving too quickly to rein in the deficit.
The economists have boosted their projections for the economy, which Mr. Flaherty uses to shape his own assessments. They now see average economic growth of 2.7 per cent this year, according to a Bloomberg survey. That's higher than the 2.3 per cent Mr. Flaherty projected in his September fiscal update, but still well below the 5 per cent to 6 per cent that typically follows a deep slump.
“The dominant theme here is that unlike recoveries from previous recessions this one's going to be fairly slow and drawn out,” said Craig Alexander, deputy chief economist at Toronto-Dominion Bank. “I don't think the government should be tightening fiscal policy before the recovery has gained greater traction.”
In the U.S., President Barack Obama is facing intense political pressure to start taming a deficit on track to reach a record $1.6-trillion (U.S.), even as a stubbornly high unemployment rate forced him to ask Congress on Monday for another $100-billion to create jobs.
Canada, by comparison, is in a better position to carefully talk about a plan for tackling the budget shortfall that the global downturn spawned. Mr. Flaherty and newly minted Treasury Board President Stockwell Day have said the budget will include a road map to bring the budget back into balance within five years.
Most Canadian economists say outlining such a strategy is a good idea, but caution against being too aggressive.
“Unless economic growth turns out to be significantly stronger than economists like myself are projecting, the recovery won't do enough to get back into a balanced budget,” TD's Mr. Alexander said. “The budget is an opportunity to lay out a framework for what you try to do over a five-year horizon, and in that context there's a perfectly good opportunity to outline how you intend to, after the economy's gained significant momentum, get back into a balanced budget.”
At the same time, some economists are so cautious in their outlook that they say it's premature to even talk about spending restraint. Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, said that even if the Parliamentary Budget Officer's recent warnings come true and Canada faces a so-called structural deficit of up to $19-billion (Canadian) five years from now, the country's debt load wouldn't be rising at a pace that increases the ratio of debt to gross domestic product.
“We're not Greece, so we don't have to impose an austerity program while the economy's still weak, or even talk about it,” Mr. Shenfeld said. “There's lots of time to adjust fiscal policy if it turns out three or four years from now we're still running a modest deficit.”
The deficit spending, and when and how to refill the hole, will be the front-and-centre topic at today's meeting, said Michael Gregory, senior economist at BMO Nesbitt Burns, not least because of nagging concerns about the effect that an aging population and health-care costs will have on long-term growth, regardless of the economic slump.
Reports late last week on both sides of the border showed Canada's economy grew at a faster-than-anticipated 0.4-per-cent pace in November and that the U.S. economy expanded at an impressive 5.7-per-cent annual pace in the final three months of 2009. Still, although both numbers caused some forecasters to increase their estimates of Canada's growth in the fourth quarter, many economists are skeptical the U.S. can keep growing at anywhere near its October-through-December pace, most of which was attributed to companies replenishing depleted inventories.
In any case, growth in both Canada and the U.S. this year will be on the strength of billions in government stimulus measures, not to mention rock-bottom interest rates, so fiscal policy makers face the crucial task of timing their belt-tightening just right because it remains unclear when the private sector will see self-sustaining demand.
Deficit reduction is important, but governments will have to walk a tightrope in the next year, said Jay Myers president and chief executive officer of Canadian Manufacturers & Exporters, which is hosting Mr. Flaherty at a conference later Tuesday in Ottawa.
“The year of recovery is going to be much more challenging for federal and provincial governments than the year of recession,” Mr. Myers said. “They basically knew what they had to do in recession. It's much more challenging now, to make the right choices.”
The balance hinges on beginning to unwind the extraordinary spending while also encouraging investments in new technology, innovation, skills development and market diversification that help growth over the long haul, he said.
Other topics that might be raised Tuesday range from new housing regulations to learning to live with the strong dollar, said Sheryl King, head of economics at Merrill Lynch (Canada).
The Finance Minister warned last month he will step in if the white-hot home resale market continues to push prices higher by tightening the rules for borrowers, such as increasing minimum down payments and shortening the maximum length of mortgages.
Tuesday, February 2, 2010
Flaherty’s INCOME trust tax is like 2.5 million looming job losses
Letter to CARP
February 2, 2010
Ms. Susan Eng
Vice President, Advocacy
Canadians Association of Retired Persons (CARP)
Dear Susan
Re: The Marshall Savings Plan
Please visit our new website http://marshallplan.ca/ , that received over 1,000 hits yesterday from Canadians across the country, on its first day of launch.
There, on the home page, you will see an explanation of the constituencies that the Marshall Savings Plan serves, and the issues that it addresses, namely:
all Canadian taxpayers, by preserving $6 billion in annual tax revenue that is at risk from the continued takeover of the vulnerable (artificially devalued ) income trusts,
the 75% of Canadians without pensions, who have been placed at a distinct disadvantage as a direct result of the Tax Fairness Plan vis-à-vis the 25% of Canadians with pensions,
2.5 million Canadians who relied on Stephen Harper’s promise to “not raid their nest eggs, by not double taxing income trusts”, only to lose $35 billion of their life savings and lose an essential investment choice to provide monthly retirement income, as a result of that misplaces trust and Stephen Harper’s patent lie to Canadians that income trusts cause tax leakage, as his means to appease the intense lobbying that he received by nefarious parties intent on making Canada less competitive and less democratic.
There you will also see the unvarnished feedback from the over 600 Canadians from every province and territory in Canada who have taken the time to voice their growing outrage at this unresolved matter caused by the Stephen Harper government. Those comments can be viewed by clicking on the tab on the home page entitled “Comments from supporters”. It is surprising the extent to which these Canadians are also expressing the extent to which this presently unresolved matter will influence their voting choices and well as their standard of living.
This is meant to serve as an archive of all the comments that would have been received to date by you as well as the decision makers in Ottawa, and to whom these messages are automatically sent from our website. I thought it was important for the public at large to have the benefit of reading what others, you included, are hearing about Canadians overwhelming support for inclusion of the Marshall Plan in Budget 2010.
You will probably be interested in knowing that the Marshall Plan was named after David and Lorraine Marshall, a retired couple from Cornwall Ontario, who are not only members of our association, but yours as well.
I look forward to speaking with you soon, on behalf of the Marshalls and all the countless other David and Lorraine Marshalls from across Canada who would benefit immensely from the win-win-win solution known as the Marshall Savings Plan and the restoration of a level playing field between those Canadians with pensions (25%) and those without (75%). I will then be able to explain to you in greater detail how this new savings plan addresses Canada’s pension crisis and preserves/recognizes $6 billion of annual taxes that are at risk in order to address Canada’s deficit crisis and achieve the original (albeit false) intent of the Tax Fairness Plan which was to:
- strengthening Canada’s social security system for pensioners and seniors
A cynical, but calculated, false invocation of the most vulnerable members of our society, if there ever were one. Except in the case of the Marshall Savings Plan we actually achieve that admirable goal, along with many, many other worthwhile goals
Time is limited, as the best hope for adoption of the Marshall Savings Plan would be in Budget 2010, which is now only a few short weeks away from being tabled.
Please call me at your earliest convenience to better understand from its originators what the Marshall Savings Plan is, and all that it could be.
Yours truly,
Brent Fullard
(Volunteer) President and CEO
Canadian Association of Income Trust Investors/Taxpayers
www.caiti.info
647 505-2224 (cell)
Cc David and Lorraine Marshall
Members of CAITI
75% of Canadians without a pension
Monday, February 1, 2010
On why Michael Ignatieff should be embracing of the Marshall Plan
"Successful countries knock down the barriers -- of red tape, regulation, and monopoly -- that divide citizens, confer unfair advantages or prevent people from working together" Michael Ignatieff
What could be more of an “unfair advantage” that is “conferred” on that "divided group of citizens" than the 25% of Canadians with pensions who have the opportunity to own income trusts tax free, whereas the 75% of Canadians with pensions are denied this advantage in their RRSP, defiling the very principle on which a Liberal government under Louis St. Laurent ushered in the RRSP in the first place over 50 years ago?
What could be more of an “unfair advantage” that is “conferred” on that "divided group of citizens" than the 25% of Canadians with pensions who have the opportunity to split their “pension income” with their spouse, whereas the 75% of Canadians with pensions are denied this advantage, based on some grossly arbitrary and discriminatory red tape definition of what constitutes “pension income”?
We, the majority will not stand for unfair advantages being conferred on the minority that are denied of us, in exactly the same way that we would not stand for advantages being conferred on us, that would be denied of the minority.
The concept is called fairness.
Under Michael Ignatieff’s leadership, the Liberals gave the 25% of Canadians with pensions a two hour face to face meeting to discuss their issue at the Liberal’s Round Table sessions going on in the HOC while Parliament is prorogued, so the question is when will the 75% of Canadians without pensions, who have a solution known as the Marshall Savings Plan, get their day in court, as it were, with the Liberals under Michael Ignatieff’s leadership? Time for Michael Ignatieff to demonstrate to the 75% of Canadians without pensions what he stands for: red tape, regulation and the insurance industry monopoly or the 75% of Canadians without pensions and presently without any representation in the House of Commons?
The avoidance of a condition described by Roland Michener as “invidious”
On the origin of species: RRSPs
By: Brent Fullard
February 1, 2010
I think a lesson in history will serve all of us well in evaluating what the income trust issue is about and the great promise that is afforded to all by the arrival of the Marshall Savings Plan, which will see the onslaught of foreign takeover of income trusts halted today, in a way in the which the Liberal Plan is presently unable to, as it would be preposterous to think Harper would embrace the Liberal Plan in Budget 2010 as a solution to the financial pandemic that he has created, in the same way the he would embrace the face saving, yet equally effective Marshall Savings Plan.
Hopefully the Liberals understand the income trust issue sufficiently well to know that it represents the complete defilement of RRSPs as they were first conceived of in 1957......by a Liberal government. Back in those days even the opposition Conservatives spoke in eloquent terms of the need for equality and fairness in providing those Canadians without pensions the same opportunities and level playing field as those with pensions.
I went to considerable trouble to dig out the debate on the second reading of the legislation that ushered in the RRSP in 1957 that was contained in that year’s budget. This material is not available on the internet. Roland Michener called that situation of unfairness as between these two groups of Canadians as an “invidious” one. Invidious meaning:
1. calculated to create ill will or resentment or give offense;
2. offensively or unfairly discriminating; injurious:
3. causing or tending to cause animosity, resentment, or envy: an invidious honor.
Do you suppose that the Conservatives of that day, not to mention the Liberals of that day, under Finance Minister Harris and Prime Minister Louis St. Laurent would find Stephen Harpers’ income splitting for seniors that only applies to those with pension income to be “invidious” or the fact that Flaherty gave the pension funds a bespoke carve-out to placate them such that pension funds can access a companies pre tax earnings and only pay one tax (38%), whereas RRSPs can not, and have to incur two taxes (62%) as being invidious?
I call upon the Liberals and all fair minded Members of Parliament to embrace the Marshall Savings Plan solution, as if it were their own (since there is no pride of authorship) and in the name of these stalwart and morally guided Members of Parliament of the past, and from all sides of the aisle, recorded for all posterity in Hansard below, knowing that The Marshall Savings Plan is a both a litmus test and an IQ test of who today’s Members of Parliament represent: Life insurance annuity salesmen and pension fund annuitants or the 75% of Canadians who simply want equality of treatment
Mr. Michener: “ This [RRSP] could affect some 400,000 taxpayers who are self employed; in fact it could go beyond that as framed because it is open to the employees who are not already contributors to an approved pension fund. I recall that my first plea on behalf of the self-employed described them as being discriminated against by the legislation as it stood in May of 1953 when Mr. Abbott was finance minister. I further believe representations have been made, perhaps over a period of ten years by different associations of self-employed persons, who find themselves in the invidious position of not being able to save for their retirement money which had not been taxed as would have been the case had they been contributing to approved plans.”
Mr. Herridge : “ Mr. Chairman this interesting [RRSP] provision will be to the advantage of possibly, I understand, half a million Canadians, mainly professional and business people. It will, I think, give those people a measure of fair play which had been denied them in the past. We feel that such a scheme is necessary if industrial workers are to have a measure of security on retirement, and the mobility which is their right in a modern democratic civilisation so that they can move from one company to another and not be chained to one area, in other words the right to full security that would be provided by such a national scheme, I think that in view of the large public investment in pension schemes - and a much greater investment still will result from the present changes to the Income Trust Act – the government has a direct responsibility for some action with respect to a national scheme in this country, I recall that last year we were told that over $30 million was lost to the federal government owing to pension schemes, and that sum will probably increase rapidly in the future. Future contributions, deductions and so on will make for even faster growth than in the past and I think that in the present occasion is a splendid opportunity for the minister, in the words of Winston Churchill, to “bring the magic of the law of averages to the rescue of millions who need it at this time.”
Mr. Harris: [on the matter of taxes being deferred under the RRSP legislation for the benefit of all Canadians, rather than simply those with pensions, or what Flaherty has whipped up in 2006 into his tax leakage tirade argument] “On the other hand, there is no question at all in my mind but that stability of income and security for the future do work out to the advantage of the taxpayers of Canada generally, because such security minimizes the number of occasions on which emergency measures might have to be taken here in order to look after persons who otherwise might have been able to look after themselves through this kind of pension program that the hon.member has in mind. I merely say this to indicate that the Minister of Finance is not disinterested about seeing that adequate security and income is provided at all times
The Deputy Chairman: “shall the resolution carry? Some hon. Members: “Carried” The Deputy Chairman: “I think that completes the paragraphs.”
For information on the invidiousnees of the income trust tax, see the comments from Canadians here: http://marshallplan.ca/
Tyranny of the entitled
From: http://marshallplan.ca/
I happened to catch the Liberal roundtable on pensions reform headed by John McCallum. There were representatives of every facet of Canadian society affected by the financial crisis and the need to find solutions to maintain pensions which were over extended before the crisis hit. Public and private pension plans were the discussion. There was not one person to represent the 70% to 75% of the population that have no pension. "period". The only mention that would involve this group was they need better education on these matters and mutual fund charges were a concern by way of management fees. 40% of returns in mutual funds goes to management fees. That was it as far as concerns for the majority of the population were concerned. I think this is very revealing and a gross statement, not just by the Liberals, but by all political parties and their priorities.
I remember Brent's post showing the picture of the sign showing the black and white water fountain. This pretty well sums up the battle the regular working class face in this country and the lack of opportunities in investments to support our retirement. The discrimination in opportunities between this segment of our society and the other 70% to 75% is blatantly obvious and the attitude of our politicians is we are a segment of society that are irrelevant except when it comes to being taxed to support their over extended pension plans. It,s depressing when you realize where we fit in in the psyche of these politicians who direct our society.
Just one other bit of information i found revealing was the costs pension funds incur and individuals incur to maintain these investments. If i remember right the pension funds costs were 3 or 4 times less then the individuals. How do you compete with that? A Solution = Marshall Savings Plan
Don
Hornby Island, B.C.
