March-03-08
For Immediate Release
February 29, 2008
Liberal Finance Committee Members call on Auditor General to Examine Government’s Claims of Income Trust Tax Leakage
OTTAWA
– Liberal Members of the Standing Committee on Finance today called on
the Auditor General to investigate the tax leakage claims that the
government used as the basis for its October 31, 2006, decision to tax
income trusts.
“I
think that this government’s stonewalling has gone on long enough and
it’s time that Canadians got to see that the Government simply made up
its story that income trusts cause federal tax leakage,” said Liberal
Finance Critic John McCallum.
“Prime Minister Stephen Harper promised to Canadians that he would never tax income trusts. Then
he went back on his word, costing Canadians billions overnight and in
the wake of his silence on the issue we feel that only the Auditor
General can shine some light into this matter.”
All
four Liberal Members of the Finance Committee signed a letter to
Auditor General Sheila Fraser asking her to investigate the matter,
particularly the government’s unproven allegations about income trusts
causing tax leakage.
“This has clearly become much more than just another instance of the government not doing its homework before acting. It has become a full-blown scandal and cover-up,” said John McKay, Member of Parliament for Scarborough-Guildwood. “We
have tried virtually every tool at our disposal to get the government
to show us how they came to their conclusions about tax leakage and the
Auditor General may be Canadians’ last resort.”
An
Access to Information request asking for the Department of Finance’s
assumptions, data and methodology resulted in the release of only 23
pages of documents that are almost entirely blacked out.
A
direct request from the Finance Committee to see the data was met with
two thick binders of superfluous information that did not contain the
data or methodology originally requested.
A
written question was placed on the Order Paper asking the government to
recalculate its estimate of tax leakage using the 15 per cent federal
corporate tax rate that will actually be in effect in 2012, the year
after the income trust tax begins, as opposed to the 21 per cent tax
rate that was in effect at the time of the announcement. The
government’s response to the question indicated that that this would be
a hypothetical calculation and therefore impossible to do.
“That’s not a hypothetical, that’s what the federal tax rate will be,” said Garth Turner, Member of Parliament for Halton. “If
the government can’t manage to run the new 2012 corporate tax rate
through their calculators then I have no reason to believe they ran the
old one through their calculators in October of 2006.”
In 2006, Stephen Harper ran on a campaign commitment to never tax income trusts. The Conservative election platform characterized any attempt to impose such a tax as, “An attack on retirement savings.”
“That
election commitment was obviously a falsehood. Unfortunately the voters
who believed it and invested even more money in income trusts lost a
significant portion of their nest eggs,” said Massimo Pacetti, Member of
Parliament for MP for Saint-Léonard—Saint-Michel.
“Even
today, 15 months after they broke their election promise, Members of
Parliament still hear from the thousands of Canadians whose retirement
plans were shattered by this deception. Liberal Members of Parliament
continue to stand up for them.”
-30-
The full text of the letter sent to the Auditor General is attached.
To see the government response to written question 149 on the Order Paper please visit: www.liberal.ca/pdf/docs/080229_Q-149_en.pdf
Any decision concerning this portion of the Gardiner needs to me made, not in isolation, but in the broader context of what's to be done with the entirety of the Gardiner. $1 billion is no trifling sum of money that Toronto taxpayers will be spending. This decision also needs to be made in the context of the broader Toronto interests, rather than the more narrow interests who are calling for a preservation of the status quo (at a cost of $1 billion).
I think everyone agrees that the Gardiner is an idea that did not realize on its original 1950's promise, and is not something any urban planner would recommend today. That said, how can it possibly be considered a good idea to simply perpetuate a bad idea, by preserving the Gardiner at a cost of $1 billion, as people like John Tory are proposing?
Tory's hybrid idea sounds more like a campaign to mask all the obvious ills of the Gardiner with some token gestures of making what's bad feel less bad, much like the exercise of putting lipstick on a pig.
Fixing what's wrong with the Gardiner won't be cheap, but rather than throwing $1 billion to perpetuate the bad idea known as the Gardiner, how about spending some real money and come up with a real solution, such as the tunnel that is being proposed? Toronto and Torontonians deserve real solutions and not band aid solution, as the incremental cost, as between the two, will prove itself money well spent over the short, immediate and long term and won't be a decision that future generations will be second guessing, as we are now doing with the Gardiner.
Maybe we could call it the Tory Tunnel as that might appeal to the Mayor's ego and might get him to think straight on this major decision that he's presently headed down the wrong direction on.