Saturday, February 27, 2010

Prof. Booth: Re: Your comments on CBC concerning tax leakage from income trusts

February 26, 2010

Prof. Laurence D. Booth (
J. L. Rotman School of Management
University of Toronto
105 St. George Street
Toronto, Ontario
Canada M5S 3E6

Mr. Booth:

You, Don Francis and myself had occasion to be interviewed by Havard Gould of the CBC for a segment on The National that aired this evening that dealt with the matter of the government’s taxation of income trusts. This policy was based on the government’s allegation that “income trusts cause tax leakage”.

On the CBC segment, you reaffirmed the government’s allegation by stating “the whole of the corporate income tax base was possibly at risk, or at least a significant part of it was at risk.”

Please clarify what you mean by “at risk”. At risk of what? The insinuation you are making on national television is that fewer taxes were going to be collected by Ottawa as a result of conversion of corporations to income trusts, such as BCE and Telus.

What is your proof for making such statements, as the only proof offered by the government to back it’s claims are 18 pages of blacked out documents? These documents have been blacked out for the sole purpose of hiding the fact that the government’s tax leakage analysis is grossly flawed, a fact that I was made aware of by Dennis Bruce of HLB Decision Economics on November 1, 2006 by way of his authoritative publication on this matter entitled “The tax revenue implication of income trusts”.

Dennis Bruce’s revelation about this gross error in the government’s analysis about tax leakage was reaffirmed to me in an email from your former colleague Jack Mintz, who wrote to me on November 26, 2006 stating:

“I do want to point out that there is a serious flaw in some analyses especially on the taxation of pension and RRSP accounts. Finance was not right to treat the impact as zero.”

Quite apart from Jack Mintz and Dennis Bruce, we have the authoritative findings of those like Professor Stanbury of UBC and groups like PricewaterhouseCoopers, RBC Capital Markets,. BMO Capital Markets, CIBC World Markets and others, who refute completely the government’s claims of tax leakage, however your comments indicate that you are supportive of the government’s claims of tax leakage. If so, please provide your proof of same and the academic justification for the claims you made on tonight’s CBC broadcast.

Thank you very much.

Yours truly,

Brent Fullard
(Volunteer) President and CEO
Canadian Association of Income Trust Investors/Taxpayers

647 505-2224 (cell)

Cc Havard Gould, CBC
Esther Enkin, CBC
Don Francis
William Stanbury
Dennis Bruce
Gordon Tait, BMO
Dirk Lever, RBC
Ross Sinclair, PwC


Dr Mike said...

I thought this segment was called Ask a Politician.

Professor Booth is a politician how???

Blanket statements such as he made are not acceptable in academic circles as research with proof are the norm.

Until he provides the numbers behind his statement , then acceptance of his theory is impossible.

Dr Mike Popovich

PS---our man Chicken Jim was unavailable for comment--no great surprise there as his position remains undefendable.

Anonymous said...

I was very disappointed with CBC's coverage of Income Trusts on the News last night. It never gave Brent Fullard much of an opportunity to state his point of view. Not a very professional approach to investigative reporting. A lot of facts were missing. Where was the proof of tax leakage that Jim Flarherty mentioned? Very poor coverage. BB

Anonymous said...

I feel sad for you Brent.
I know how hard you have worked to have the opportunity to share the truth with all Canadians.
You have been cut to the bone. Your message was minimal and not because of you.

No one is ready to listen and learn. We face a very high wall and the truth isn't allowed.

Too complicated ? Not for a second and I have to understand that we live in a country built on images, lies and sold to big businesses.

I saw Don Francis for a maximum of ten seconds. I know that Don is a great guy and he knows this file very well, He too was cut to the bone.

So much efforts were deployed to have this moment and our white knights were on the front ready to fire.

Both were silenced and I doubt the joe the listener learned anything.

I feel sorry for Brent and Don, great Canadians with knowledge working in vain. I know the feeling....


Thank you guys, I know you did very good but, crooks killed your work and intelligence.

CAITI said...

This was a farce. For a segment that was billed as "ask a politician a question" there were only two things that were missing.....the politician....and the question.

The CBC strikes out again. Can't put the puck in the net with three fowards inside of the blueline and no defense in sight.

What a bunch of losers. Meanwhile the CBC had the time to conjure up the false image of Telus and BCE converting and sought out some former colleague of Jack Mintz's at the Rotten School of Business at U of T to advance the false notion of tax leakage, just the way that Jack Mintz did.

Like I said....what a farce. The CBC has proven that it has no utility as a public broadcaster.

Brent Fullard

Dr Mike said...


Everyone involved ( the Conservatives , the NDP , the Liberals , the Bloc & the Bank of Canada), have forgotten about the most important aspect of this whole mess , the people affected--we are the forgotten tragedy of this whole thing.

These people dehumanized this whole sordid affair & took us out of the equation early in the process.

They spun , they lied & they portrayed us as the bad guys who were just a bunch of poor investors.

From your past in the banking business , you know that money talks & in this case big money has Flaherty`s ear.

Jean-Marie , hope you are well.

Dr Mike Popovich

CAITI said...

Meanwhile the CBC lives in some kind of time warp, trotting out all the false arguments of the past like the conversion of BCE and Telus (which would have netted the government more taxes and not less, as falsely suggested by the bozo CBC, while goiing our their way (after he refused to speak on camera for this episode) by allowing Flaherty to repeat once again what his ostensible original intent of the policy was, with no regard to the fact that his alleged purpose of "fairness" was false to begin with and has been refuted by every possible subsequent development in the LAST THREE AND A HALF YEARS!!!!

Maybe given their love for the time warp known as October 31. 2006, perhaps Claire Martin of the CBC can start reporting old weather reports from 2006, rather than 2010?

Brent Fullard

Anonymous said...

I am no CA or PHD
But this laureate fellow Prof. Booth with a cup of tea and biscuit, is saying that the pie was getting to big with the BCE conversion so Joes like me with no public or private pensions are not allowed to own cashflow streams from a company like BCE, but a Time Bomb Leveraged Private Equity firms can, thats a shame !
Well it was ordinary Joes's like me and work from CAITI members that basically could of saved BCE from being a debt bomb.
Nortel 2 come to mind !!!