In his letter below to Alberta Premier Ed Stelmach, Canadian taxpayer Jack Ellefson from Calgary is as intent on restoring his equal right to own Alberta based Thunder Energy Trust in his RRSP (acquired by the Public Sector Pension Plan, who can evade the 31.% tax as a pension plan, but he can not in his RRSP, which creates a grossly unlevel playing field as between the 75% of Canadians without pensions and the 25% of Canadians without pensions, when the sole policy purpose of the Liberal government who created RRSPs 50 years ago was to create a level playing field for the Jack Ellefson’s versus the PSPs of this world),
David and Lorraine Marshall from Cornwall Ontario intent on restoring their equal right to own Ontario’s monopoly land registry system, Teranet, that was predatorially taken from the hands of Ontario taxable investors by Ontario’s own pension plan OMERs using and exploiting the tax arbitrage that was embedded in this grossly unfair Tax Fairness Plan, so that public pension funds can own trusts free of the 31.5% tax payers, whereas the taxpayer who is liable as plan sponsor for those pension liabilities assumed by him can not. Whose perverse and insane idea of a “level playing filed” or a “tax fairness plan” is this apart from perhaps Jim Flaherty and/or Marcus Brutus Carney?
Do equal rights not matter in this country? For something as fundamental as providing for retirement and in avoiding having your nest eggs raided as Harper (Mr. Slithers) deluded people into thinking he would not do, only to compound his deceit by using the utterly false premise of “tax leakage” as his excuse as he slithered from accountability in the same shameless and snake like fashion that he slithered from accountability on the Afghan detainee abuse allegations by hiding behind those in the military whose real lives are actually on the line, rather than merely the political life of that snake. Mr. Stephen Slithers Harper.
I’d like to see some brave reporter attempt to rationalize that gross unfairness as being just, as there are so many of you out there in the impressionable press who are completely oblivious ( or is it cowed?) to this total rip off that’s going on, and which will continue to go on, as the CEO of OMERs said in late 2009 that scooping up more devalued and vulnerable trusts will be their top investment focus for 2010. Why not? I’d pick up a $35 billion bill if it was lying on the ground too, especially when no one in the press or the political class are even watching.
Well don’t be so delusional, as Jack Ellefson and the Marshalls are watching and now that the Marshall Plan exists, there is no rationale reason that a sane and reasonable person, interested in true tax fairness rather than the selfish and narrow agendas of Manulife and Teachers’, that a rational and honest person could advance to credibly argue against the Marshal Plan’s implementation.
John Turley-Ewart of the National Post tried that yesterday and made obvious who he’s working for, or who’s foremost in his mind, as he spouts his facile “the sky is falling” nonsense that comes from the script of predators like Teachers’, and predators like Manulife, who seek to make Canadians more captive to their Manufactured synthetic derivative investment products that aren’t even hedged as they make naked bets on the real market in the utterly false belief that artificially (ie not adequately disclosed, according to shareholders who are suing) boosting earnings per share is somehow good for Canada’s economy versus real investments by real people in the real Canadian economy, something only made possible through income trusts and a true tax fairness plan and not a Tax Fairness Plan that was borne out of the sick philosophy of University of Calgary professor Tom Flanagan and his con-man friends in high office who are spiritually guided by the philosophy that “It doesn’t have to be true, it just has to sound plausible.”
Tax leakage was that untrue but “plausible argument” that allowed gross unfairness to be hoisted on to an unsuspecting Canadian public, who went unprotected by the sheep in the press and the political class.
Is it any wonder that Jack Mintz, Jim Flaherty’s Energizer Bunny of Mark Carney’s tax leakage hoax, has now joined Tom Flanagan at the University of the Plausible but Often Untrue at Calgary U? After all, Jack Mintz revealed his academic worthlessness when he wrote to me in November 2006 that “I do want to point out that their is a serious flaw in many of the analysis , regarding pensions and RRSPs. Finance was wrong to treat the impact as zero.” Thanks Jack but telling me the truth (that I already knew), but it does nothing to absolve you of misleading the public on the hoax called tax leakage. And now you are working with Flaherty as his lead hand advisor on Canada’s pension reform. Is it any wonder that you have concluded that everything is okey-dokey with Candians’ RRSPs savings system, when the entire public knows that to patently untrue. Why would you think that anyone would ever trust you again or accept you as credible? Unlike you and Flaherty I am focussed on the Jacl Ellefsons of this country. Let’s see if Ed Stelmach is too.
January 20, 2010
Dear Honourable Premier and Members.
Good luck with challenging the federal government over equalization payments to the other provinces. To me it doesn’t seem to be an area of provincial jurisdiction but I enjoy a scrap with Ottawa, as do most Albertans.
A more important scrap with Ottawa is their crushing of oil and gas income trusts, an investment vehicle used by the “juniors” to finance exploration. Oil and gas explorers write off exploration costs and do not pay much tax; REITs interest expense write off means they do not pay much tax. But REITs are tax exempt. Oil and gas income trusts should be exempt of federal tax as well. Oil and gas financing through income trusts may be every bit as important to Alberta as the governments review of royalties. To me this is an area of provincial importance worth a scrap with Ottawa where Alberta would have credibility and could garner support from other provinces.
I believe all political parties in Alberta should fight Ottawa to continue with the current tax exempt status for O&G trusts.
There are many studies showing that Unitholders pay tax on distributions as high as 45% and tax leakage was nonexistent. The T.F.P was and continues to be questionable federal legislation
Below is a previous letter to Premier Stelmach:
Corporate Taxation of Income Trusts.
Royalty trusts have been used to finance close to $100 billion dollars of petroleum activity mainly in Alberta, and mainly by small to medium sized producers. I was very surprised to learn (see on TV) that Alberta is supportive of the Federal government’s application of 30% corporate tax on trusts as it might benefit Alberta by $450million. (Per year)
My basic question to you, is wouldn’t you rather have another 100 billion of oil/gas activity in our province as it would surely generate in excess of $450 million in economic activity and taxes. Now as it turns out the $450 million may evaporate because private equity (read civil servant pension plans) are buying up the trusts for their rich cash flows and will not be paying corporate income tax anyway.
Am I missing something here? Please help me.
Can you imagine the hue and cry that would come from Quebec if the Federal government destroyed/killed $100 billion of economic activity in their province? Your PC government has let Alberta down on this matter and I believe you should be publicly reversing your position and support the groups that are fighting this bad federal legislation. Alberta needs Royalty Trusts for the financing of its oil and gas activities!
Even the Federal Liberal party agrees to the need for royalty trusts for oil and gas development. Please take a stand on this before it’s too late.
Vote rich Ontario’s REITs (Real Estate Investment Trusts) are not taxed under the Federal T.F.P. Alberta’s junior oil and gas companies should be accorded similar treatment. It’s not to late to seek accommodation from the Federal government and tax exempt status for oil and gas income trusts.
JACK ELLEFSON, P.Eng (life member)
27 Hawkside Close N.W.,
Calgary AB, T3G3K4
'Marshall Plan' for trusts
Diane Francis, Financial Post
Tuesday, January 19, 2010
The income trust flip flop in fall 2006 still haunts Stephen Harper, the Prime Minister. It has cost him in polls and will likely do so in 2010 again as Ottawa's punitive 31.5% tax on the remaining 169 income trusts will force them to privatize or be taken out by big corporations or pensions.
His policy boondoggle caused damage:
-A broken promise by the Prime Minister made, unequivocally, to leave trusts intact because of their importance to small investors and retirees.
-The soiling of the country's reputation because the flip-flop was retroactive and confiscated $35-billion in value.
-The disappearance of 51 income trusts (out of 220) bought by foreigners and others who do not pay taxes.
-Evidence that the Finance Department did not understand nor do the necessary homework.
The Liberals say the 31.5% income trust tax should be 10% this year to prevent huge disruption. But a more elegant solution has been put forward by a truck driver from Cornwall, Ont., David Marshall, and his wife, Lorraine. Dubbed the "Marshall Plan," it has been formally submitted in response to requests by the government for ideas before the March budget.
In a nutshell, the "Marshall Plan" calls for creation of a unique tax shelter where income trust units held in RRSPs could be placed and the 31.5% tax avoided. In return, any capital gains tax would be deferred until monies were withdrawn but the distributions to unitholders would be taxable every year.
This could be an instant windfall to Ottawa. The 169 trusts that are left pay out about $16-billion annually in distributions to their unitholders and this income, if taxed annually at an average dividend rate of 38%, would generate $6-billion a year in taxes to Ottawa.
If this is not done, the damage already caused will multiply. Since 2006, the policy led to the buyout of 51 income trusts by purchasers who don't pay taxes (pensions) or who will write off profits against interest payments on debts used to acquire the trusts. This phenomenon is the most damning indictment of the 2006 nonsense and will be compounded this year.
Some may argue that the Marshall Plan constitutes another bailout. But that's nonsense. How can a tax shelter that yields $6-billion a year in taxes be a bailout? How can a tax shelter that allows the feds to eventually tax capital gains when it collapses or funds are withdrawn be characterized as a bailout?
The Caisse de Depot et placements du Quebec, National Bank and others were rescued after they didn't do their homework and peddled or bought asset-backed commercial paper. So what's the justification for not rescuing innocent investor-victims who did their homework and were promised protection, then double-crossed?
The income trust policy is a blunder but can, thanks to a truck driver and his wife, be somewhat corrected. Only if Harper and Jim Flaherty, the Minister of Finance, heed and adopt the Marshall Plan in the budget this March.
Full details on the Marshall Plan here: http://caiti-online.blogspot.com/2010/01/2010-budget-consultations-marshall.html
Diane’s article from above, here: http://www.nationalpost.com/opinion/columnists/story.html?id=5b0325ec-9c4f-437b-9500-c2415441fab5
Thursday, January 21, 2010
Posted by Fillibluster at 7:01 AM