Tuesday, February 2, 2010

Flaherty’s INCOME trust tax is like 2.5 million looming job losses

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.


Daniel Miller said...

While you brag about the number of hits (who don't show anything about support) of you Marshall Plan website, I don't see you bragging about the number of views that you have on the right hand side of your latest missive against Jack Layton. Part 4 says that you have had only 164 views. That includes about 4 of my views and who knows how many other multiple views.

It is just further proof that no one listens to Brent Fullard.

Dr Mike said...

Daniel my man.

Good to hear from you again.

The unfortunate thing is that you have nothing concrete to offer other than bashing Brent Fullard.

And you do this why??

You are obviously a guy with a personal axe to grind or just some malcontent sent by one of the political parties to stir the pot.

Perhaps , instead of bashing Mr Fullard , you could deal directly with the issues here.

Give us your opinion on the Marshall Plan why don`t you--tell us what is good about it .

Tell us what is bad about it.

Give us some concrete input rather than a bucket full of drool.

It`s time to debate rather than your incessant line of deconstructive criticism.

Dr Mike Popovich---Rodney Ont

Anonymous said...

Good Lord!!! Why on earth isn't the Liberal Party advertising more about their income trust proposal?? I'd way rather vote for a party that solves the problem with a specialized 10% tax for foreigners, than the Conservatives who have hiked my fake income so high, I have to pay much more Ontario health tax, with their stupid dividend tax credit scheme. And I'd MUCH rather change the government, than try to continue to scramble to try to replace the income I'm going to lose.

Or is it just a rumour that the Liberals were trialing, about changing the income trust rules??

Brent Fullard said...

Daniel Miller:

I think you have finally hit the nail on the head (for once?)!

Do you really think that "no one listens to Brent Fullard."?

That probably explains the mess this country is in< since EVERY ONE of my predictions over the past three years has proven to be PRESCIENT and TRUE.

Good of you to point out this obvious flaw concerning not enough people listening to me.

Please let us know what your suggestions are so that you and we can remedy that obvious omission.

Brent Fullard

PS Thanks!

Daniel Miller said...

No one listens to you because of your tactics. If I am a member of the media or elected politician, I do not support the Marshall Plan just because you are involved with it.

Don Martin had a great column about you during the election. You should re-read that and reflect about what he was telling you.

Come on CATI members -- wake up and smell the coffee. Brent Fullard is killing your message.

Brent Fullard said...


You have to stop living in the past and start living in the present, boy.

I can't help the fact that Don Martin went juvenile in the press about somebody (me) who was unwilling to take no for an answer when I politely asked Don Martin to release to me the copy of Harper's 200 page manual on how to disrupt parliament and parliamentary committees.

As you may know Don Martin was given this manual by some Liberal who found it left behind by some CON Committtee Chairman.

Do you suppose that Liberal gave it to Don for "safe keeping" or to have its contents faithfully reported on in the press?

This document took on heightened signficance at the time of Harper's reneging on his fixed election promise that gave rise to the 2008 election, in which he jsutified this arbitrary and unlawful action by sayinng that Parliament was 'dysfunctional". How could that be as it wasn;t even sitting and furthermore it was Harper as evidenced by his Manual that made it dysfunctional.

So upon asking Don for the only known copy of this Manual at the time of the 2008 election being called what did he say, being the professional journalist that he ostensibly is?

"Do your own research", as if to suggest that somebody handing him a 200 pages manual on how to obstruct Parliament can be considered "reasech" in its own right!

More like hiding the real truth from the public.

Say Hi to Don for me, and send him my condolences that compromising himself in this, and other ways, didn't land him one of those 5 coveted seats in the recent Senate Draft.

Brent Fullard

PS Your comment of "Come on CATI members -- wake up and smell the coffee. " would suggest that it is YOU who is not being listened to here, rather than me, as you alleged in the immediate prior post.

You do bounce from hot to cold in the blink of an eye!

Daniel Miller said...

That's the thing Brent, you see nothing wrong with that reply you just gave me. I will not give you a lesson here, but anyone who understands politics knows what I am talking about. You should try some media training, perhaps.

But it is an example why you are the worst lobbyist in the history of Canada. Your members are not served well.

Brent Fullard said...


Not a "lobbyist". Lobbyists are paid. I am not paid for the advocacy work that I do, which makes me different than virtually everybody else, Don Martin included.

Have a nice day. Please take your lame advice elsewhere....maybe to some paid lobbyist.

You have exhausted your usefulness.


Daniel Miller said...

Lobbyists are not always paid. Anyone who speaks to public officials regarding policy is a lobbyist. Many your letters to public officials have even been reprinted on your site to prove that you are indeed one. Many lobbyists represent charities or ratepayer groups.

You are also an income trust investor, so you would see net benefit of said policy, so you are to be paid indirectly.

Your name should be Brent "failed lobbyist" Fullard.

Dr Mike said...

Daniel old buddy.

Mr Harper recommended income trusts to us during his election campaign in 2006--many people voted for him on that basis---I voted for him not because I owned trusts because I didn`t , but because I thought he was the best man for job.

I subsequently went out & bought income trusts because he recommended them--since he was a trained economist , I figured he must know what he is talking about---because he was our PM ,I thought he would not steer us wrong.

After the betrayal & the massacre that ensued , the Harper gov`t did nothing to help us at all.

Brent Fullard , having the foresight , went looking for an answer & found it---the gov`t was lying.

He subsequently formed CAITI to gather together likeminded souls in an attempt to right a terrible wrong.

We , the small investor , were looking for someone to help & that sure was not the gov`t or any politician from any party.

We turned to Brent because he knew what he was talking about & was not afraid to step on some toes.

Kowtowing to politicians & the media is not his style nor is it ours--all a bunch of kiss-ass will get you is brown lips & a "get lost son".

I have learned one thing in my many years is that if you do not fight for what is right , you might as well be dead.

So buzz-off little Daniel as you add nothing to the discussion.

Dr Mike Popovich--Rodney Ont