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Author Topic: Liberals roll over on income trusts
up
rabble-rouser
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posted 24 November 2005 09:21 AM      Profile for up     Send New Private Message      Edit/Delete Post  Reply With Quote 
With an election looming, federal Finance Minister Ralph Goodale shocked Parliament Hill yesterday by announcing another $300 million in tax cuts — this time for dividend income — as a way to stem the flow of money into income trusts.

This is way more than 300M, I;d like to know where they pulled that nubmer from.

Even though it is not passed by parliament, the GandM's article indicates that convention is to treat it as law, assuming it will get passed int he next parliament.


From: other | Registered: May 2005  |  IP: Logged
up
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posted 24 November 2005 03:25 PM      Profile for up     Send New Private Message      Edit/Delete Post  Reply With Quote 
I cant believe this. Its just a way to fill the coffers with corporate donations to fight the tories. Total bullshit.
From: other | Registered: May 2005  |  IP: Logged
abnormal
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posted 24 November 2005 03:33 PM      Profile for abnormal   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Why? The distributions from income trusts are taxed when they are received by individuals. Of course, this means that the Revenue Canada only gets one bite at the apple.

The only way that income trusts "escape" taxation is if they are held by pension plans or RSP's. Even then, they don't really escape since the money will eventually get taxed when it's paid out to the pensioners.


From: far, far away | Registered: Aug 2001  |  IP: Logged
Albireo
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posted 24 November 2005 03:45 PM      Profile for Albireo     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by abnormal:
Why? The distributions from income trusts are taxed when they are received by individuals. Of course, this means that the Revenue Canada only gets one bite at the apple.
But my question is this: what about Income Trust money going to foreign investors, or to foreign shell companies set up by wealthy Canadians. Does the government get to tax that money at all?

[ 24 November 2005: Message edited by: Albireo ]


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abnormal
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posted 24 November 2005 03:53 PM      Profile for abnormal   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
What about Income Trusts money going to foreign investors, or to foreign shell companies set up by wealthy Canadians. Does the government get to tax that money at all?

They do via withholding tax. Same way as if a foreign resident simply deposits money in a bank. That interest is subject to withholding tax as well.

By the way, it's not as easy for Canadian residents to set up foreign companies that don't pay tax to Canada as income is earned as you might think. Generally, if a foreign company is owned by Canadian residents it pays tax at the full Canadian rate. There are a few exceptions depending on whether or not the income is FAPI (Foreign Accrual Property Income) but, among other things, that can't be Canadian source income so distributions from income trusts would not be exempt. Even if the income is not
FAPI and hence not taxable it's generally taxable when it's repatriated to Canada. Passive income which, which includes interest on the income in question is taxable at full Canadian rates. Again, there are some oddball exceptions relating to listed countries.


From: far, far away | Registered: Aug 2001  |  IP: Logged
Albireo
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posted 24 November 2005 04:07 PM      Profile for Albireo     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by abnormal:
They do via withholding tax. Same way as if a foreign resident simply deposits money in a bank. That interest is subject to withholding tax as well.
Do you mean that the Income Trust is required to withold tax when payouts are made or money is withdrawn, whether the investor lives in Canada or abroad?

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abnormal
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posted 24 November 2005 04:22 PM      Profile for abnormal   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Do you mean that the Income Trust is required to withold tax when payouts are made or money is withdrawn, whether the investor lives in Canada or abroad?

Exactly. In addition, the investor has to pay whatever his local taxes would be on the income. If lives someplace with a tax treaty that prevents double taxation he may be able to offset the tax he pays to Canada against his local taxes. If there is no such tax treaty he'll end up paying twice, once to Canada and once to his own taxing authority. I'd be very suprised if many people in this position bothered investing in something like an income trust.


From: far, far away | Registered: Aug 2001  |  IP: Logged
Ichy Smith
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posted 24 November 2005 04:22 PM      Profile for Ichy Smith     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by abnormal:
Why? The distributions from income trusts are taxed when they are received by individuals. Of course, this means that the Revenue Canada only gets one bite at the apple.

The only way that income trusts "escape" taxation is if they are held by pension plans or RSP's. Even then, they don't really escape since the money will eventually get taxed when it's paid out to the pensioners.


Lots of it won't be taxed, as when the finance minister said he was going to review income trusts again, he clipped the value of the income trust market by 10 or 12%. A lot of small investors panicked and lost a huge amount of money. The only upside to that is if they waited 30 days, they can buy back their investment, and take the loss off their taxes this year....OTOH the Finance Minister made the country look like some back water economy. He was consulted before the trusts hit the market, he agreed to how they should be handled and he has been messing around ever since. And often it is people's pension he was screwing around with.


From: ontario | Registered: Oct 2005  |  IP: Logged
abnormal
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posted 24 November 2005 04:26 PM      Profile for abnormal   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Ichy,

Exactly. But I think the haircut was a lot more than 10-12%. You're right that a lot of investors panicked and took a bath when they sold. Since a lot of these instruments are held in RSP's and pension plans a lot of retirees (today's and tomorrow's)saw their retirement nest egg decline in value. Worst of it is that the original statement made by the Minister made it clear that he didn't really understand the issue.


From: far, far away | Registered: Aug 2001  |  IP: Logged
Ichy Smith
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posted 24 November 2005 05:30 PM      Profile for Ichy Smith     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by abnormal:
Ichy,

Exactly. But I think the haircut was a lot more than 10-12%. You're right that a lot of investors panicked and took a bath when they sold. Since a lot of these instruments are held in RSP's and pension plans a lot of retirees (today's and tomorrow's)saw their retirement nest egg decline in value. Worst of it is that the original statement made by the Minister made it clear that he didn't really understand the issue.



What progressive people often forget or more likely don't care about is that often Seniors live in a large part on what they have saved. If you happen to have a job, and work hard every day for most of your life, there comes a time when you slowly build up a nest egg. And as time progresses you try and build it a little. When interest rates collapsed, these savers took it in the neck. Gradually they invested in stocks that were supposedly good Canadian companies, Laidlaw, Air Canada, Stelco, companies that even the pensions owned. Of course these companies were restructured and the press has spent hours focussing on the "stakeholders". In all three cases the bankruptcy was caused by the Management, and in all three cases, only the shareholders paid the price. I won't even talk about Nortel which my ticker tells me is $3.55 and it was at $120.00. So along comes the idea of Income trusts. Companies that in many cases don't want to grow much, but that turn out a decent profit. They return a nice package that is part return on investment and part dividend.

Private investors flocked to them. Who complained? The dividend producing stocks whose 3% dividends didn't stand up to therate of the Trusts, and the Banks whose interest rates on savings is laughable.

So the Finance Minister tried to appease them and announced his stupid review. But we are going to have an election, so the Finance Minister decided not to pander to big Business, "No votes there" and instead buy the votes of Canada's Seniors. So he did the thing with Dividends. But should he be re-elected, watch for Income Trusts to come back under the gun to serve the interests of his and Paul martins Friends.


From: ontario | Registered: Oct 2005  |  IP: Logged
Being
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posted 24 November 2005 07:03 PM      Profile for Being   Author's Homepage        Edit/Delete Post  Reply With Quote 
A few years ago, a friend of mine stated unequivocally that income trusts were scams.

Greed for double digit returns caused Nortel to dive from a dot.bubble high of $120 to $3. Now it turns out that some income trusts are paying 158% of their profits in cash disbursements to unitholders, giving investors their own money back as 'returns'. In any other place, this would be known as a ponzi scheme. All because investors think they deserve to make 10% or 12% per year on their money.

If you want 10% + return, you have to be prepared to lose 50% + of your investment. Either that or you have to put in sweat equity as well. In the oil business, you get a depletion allowance representing the fact that you are just getting back your own money as return. There is no depletion allowance for income trusts.

Realistically, safe investments are going to be in the 3%-5% range. Rich people know that already and happily buy government T-Bills, knowing their returns come out of the paycheques of every working Canadian. They also know that the higher the return, the worse for capital preservation.

If you are worried that 3%-5% won't finance your desired retirement lifestyle, I suggest you find ways to increase the size of the pot.


From: Toronto | Registered: Dec 2004  |  IP: Logged
HeywoodFloyd
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posted 24 November 2005 07:22 PM      Profile for HeywoodFloyd     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Now it turns out that some income trusts are paying 158% of their profits in cash disbursements to unitholders, giving investors their own money back as 'returns'.

Such as....?


From: Edmonton: This place sucks | Registered: Jun 2003  |  IP: Logged
abnormal
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posted 24 November 2005 08:00 PM      Profile for abnormal   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Greed for double digit returns caused Nortel to dive from a dot.bubble high of $120 to $3.

Which has what to do with income trusts?

While you're at it, I'm with Heywood, can you give a link to the 158% number?


From: far, far away | Registered: Aug 2001  |  IP: Logged
Ichy Smith
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posted 24 November 2005 08:06 PM      Profile for Ichy Smith     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by abnormal:

Which has what to do with income trusts?

While you're at it, I'm with Heywood, can you give a link to the 158% number?


Some of the income trusts are apparently paying more than their income, and there are several of them in some trouble as they have had to stop payouts..... I can look if you want tomorrow and get some idea who is paying what.


From: ontario | Registered: Oct 2005  |  IP: Logged
Paul Gross
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posted 24 November 2005 08:11 PM      Profile for Paul Gross   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
This seemingly comprehensive and reputable report from a few days ago (that is, prior to Goodale's fast one) says:

quote:

Despite the recent decline of Canadian income trusts, the sector may still be overvalued by 28 per cent or a total of $20-billion, says a new study that blames “abuses” in trust accounting and salesmanship.
...
Accountability Research said its examination of the 50 biggest income trusts outside the energy and real estate industries found that less than two-thirds of their cash distributions are actual income. The rest is a return of investors' own capital.
...
It says the cash distributions of the 50 big trusts have exceeded their reported net income by 58 per cent.


Which does make them sound like Ponzi (pyramid) schemes.


From: central Centretown in central Canada | Registered: Jan 2003  |  IP: Logged
Being
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posted 25 November 2005 12:15 AM      Profile for Being   Author's Homepage        Edit/Delete Post  Reply With Quote 
In a major embarassment to Canada's international financial reputation, all of these income trusts have recently been moved to the main board of the TSX.

Even as it is now clear they are not properly managed, more companies want to convert to income trust status.

The whole system is a scam. Welcome to Liberal Canada.


From: Toronto | Registered: Dec 2004  |  IP: Logged
Ichy Smith
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posted 25 November 2005 12:24 AM      Profile for Ichy Smith     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Being:
In a major embarassment to Canada's international financial reputation, all of these income trusts have recently been moved to the main board of the TSX.

Even as it is now clear they are not properly managed, more companies want to convert to income trust status.

The whole system is a scam. Welcome to Liberal Canada.


So are CCAA protections a scam. It is a legal way to sell stock in a company, and then strip the stock of value while protecting the jobs of management. As for the OSC, now there is a toothless dragon rooting in the mud like a pig looking for apples.


From: ontario | Registered: Oct 2005  |  IP: Logged
up
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posted 25 November 2005 02:09 AM      Profile for up     Send New Private Message      Edit/Delete Post  Reply With Quote 
legal tax evasion thats all it is. The rich defer income through schemes for a long time, and they arent even willing to pay the reduced rates in their retirements, instead they create a new loophole.

If you make enough money to defer using it, you can pay next to no tax in this country. If you need your income to live, youre fucked.


These things are truly the most unprogessive form of taxation there are.


Taxes arent so bad, they buy civilization afterall.

[ 25 November 2005: Message edited by: up ]


From: other | Registered: May 2005  |  IP: Logged
Paul Gross
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posted 25 November 2005 02:21 AM      Profile for Paul Gross   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Money talks, Liberals balk and no one bothers to cc poor Johnie McKay

quote:
This was the second time Mr. Goodale and the pension fund sector had collided over the contentious income trust file.

And for the second time, Mr. Goodale blinked first.

The possibility of riling such a powerful constituent on the eve of a federal election clearly had a chilling effect on the government, which quickly scrapped the idea in favour of the more politically expedient dividend credit boost, which effectively cuts the tax rate. It also helped the Liberals neatly sidestep another bullet.

The trust industry had quietly raised approximately $2-million over the past several weeks to launch a public relations offensive, and in recent weeks was preparing an advertising campaign to fight Ottawa's meddling in the sector.

The ad blitz was scheduled for later this month
...
The policy was being developed with such haste, however, that John McKay, Mr. Goodale's parliamentary secretary, went on live television shortly before the dividend credit increase was unveiled and mistakenly suggested Ottawa was also implementing a small tax on trusts. Officials said Thursday Mr. McKay was misinformed about “the decision moving forward” and was not “up to date” on Ottawa's plans.



From: central Centretown in central Canada | Registered: Jan 2003  |  IP: Logged
DrConway
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posted 25 November 2005 02:21 AM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
B-b-b-but THINK OF THE POOR SENIORS WHO WILL BE TAXED OUT OF HOUSE AND HOME!

(... never mind that Victoria has a program to pick up your property taxes for you if you can't pay up and you're over 65. Yes, there's a lien on your property, but you can stay there until you croak.)


From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Ichy Smith
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posted 25 November 2005 09:52 AM      Profile for Ichy Smith     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by DrConway:
B-b-b-but THINK OF THE POOR SENIORS WHO WILL BE TAXED OUT OF HOUSE AND HOME!

(... never mind that Victoria has a program to pick up your property taxes for you if you can't pay up and you're over 65. Yes, there's a lien on your property, but you can stay there until you croak.)


Yes, but most of the country is not so enlightened.
Of course some poor people are far more important than others.


From: ontario | Registered: Oct 2005  |  IP: Logged
Ichy Smith
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posted 25 November 2005 09:58 AM      Profile for Ichy Smith     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Paul Gross:
Money talks, Liberals balk and no one bothers to cc poor Johnie McKay



I haven't seen them yet, but I was told this morning that there may have been a leak about the policy change as early as Tuesday. The trading patterns apparently went up in a suspicious manner Tuesday. If there was a leak it may be something for jack to launch an investigation on once he wins the election.


From: ontario | Registered: Oct 2005  |  IP: Logged
Ichy Smith
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posted 25 November 2005 10:08 AM      Profile for Ichy Smith     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Ichy Smith:


I haven't seen them yet, but I was told this morning that there may have been a leak about the policy change as early as Tuesday. The trading patterns apparently went up in a suspicious manner Tuesday. If there was a leak it may be something for jack to launch an investigation on once he wins the election.


Report on Business Television just said that it is alleged that there was a fund raising dinner for Paul Martin last week in which he was peppered with questions about the Income Trust situation, and that may be what started the changes. They also said there may be a possibility that the whole situation may be revisited after the election. Apparently the $300 million dollars was what the Finance minister claimed he was losing in taxes because of the way income trusts are taxed. He claims that the dividend tax credit will cost another $300 million dollars.


From: ontario | Registered: Oct 2005  |  IP: Logged
Being
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posted 25 November 2005 07:31 PM      Profile for Being   Author's Homepage        Edit/Delete Post  Reply With Quote 
So some people made illegal profits on insider knowledge of Goodale's decision on income trusts, which have been shown to be ponzi schemes.

Canada has to be the laughing stock of the world.


From: Toronto | Registered: Dec 2004  |  IP: Logged
2 ponies
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posted 25 November 2005 08:10 PM      Profile for 2 ponies   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Oh come on, the notion that some people made profit by having "insider-trading" knowledge of Goodale's coming decision on income-trusts is getting a little far-out. Income trusts and the loss of tax revenue from them has been in the news for months! Anybody who follows business news, even at the margin (no pun intended), knew that some change to either income trusts or corporate taxation was coming. More people hold dividend-paying stocks (e.g. public pensions & pensioners) than income trusts, but the income trust lobby is very powerful....ergo taxes on traditional corporate profits (dividends) have been lowered. It doesn't take someone with insider trading knowledge to put it all together; the Liberals are merely making sure they satisfy a good portion of the pensioner and corporate/income trust vote.

I don't agree with the Liberals an many things, but to imply that income trusts are any more "corrupt" than other businesses is pushing it pretty far.


From: Sask | Registered: Nov 2005  |  IP: Logged
Paul Gross
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posted 25 November 2005 08:47 PM      Profile for Paul Gross   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
The story is not about the months of speculation about "some change". Two monthd ago, Goodale initiated a review process that was expected to result in a crack down on the income trust excesses/loop hole next year. So income trust prices dropped over the past few months. This was legitimate since the information was public.

As the Star articled linked above reported:

quote:
The surprise move upends a review Goodale called into the tax treatment of the popular investment vehicle just two months ago. That review was to run until the end of the year, with Goodale saying last week a new policy would be ready by January.

Goodale did the opposite of what was expected: not only did he give up on taxing income trusts but he sweetened the pot with an additional gift to owners of dividend paying stocks. (The dividend tax credit does not apply to stocks held in registered plans, so only individuals who own dividend paying stocks outside of RRSPs will directly benefit from the increased dividend tax credit.)

The specific allegation is that someone illegally profited from insider advance knowledge that Goodale was going to pre-emptively do the opposite of what was expected.

As the CBC reports:

quote:
On Wednesday, just before 6 p.m. ET, the federal finance department officially announced it would cut the tax on dividends and would leave trusts alone. That's the type of news that is always announced after stock markets close at 4 p.m. ET because it would give a boost to those types of securities.

But trading in many trusts and dividend-paying stocks became much heavier than usual in the hour or two before the market's close on Wednesday, and share prices rose sharply.

Forensic accountant Al Rosen said it looks to him that Bay Street knew the details of Goodale's announcement well before he made it.

"Clearly, there was a leak between 2 [p.m. ET] and 4 [p.m. ET]," he told CBC News.
...
"We are seeing much greater rises that tell us someone knew or many people knew it [the coming Goodale announcement] was not just a clarification, but that dividends would be taxed at a lower rate and [income] funds would not be taxed at all," Rosen said.

Market Regulation Services, which monitors trading activity on the Toronto Stock Exchange, said it noticed unusual trading activity on Wednesday and is looking into it.



From: central Centretown in central Canada | Registered: Jan 2003  |  IP: Logged
Being
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posted 25 November 2005 08:59 PM      Profile for Being   Author's Homepage        Edit/Delete Post  Reply With Quote 
Scaaaaaaaaaaaaaaaaaaam
From: Toronto | Registered: Dec 2004  |  IP: Logged
2 ponies
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posted 25 November 2005 09:09 PM      Profile for 2 ponies   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
PG, no one knew what Goodale was going to do about income trusts. Many experts speculated that he would put an end to the tax treatment of the trusts to stop the loss of revenue; just because the Star expected an unfavourable change to trusts vis-a-vis tax treatment didn't mean the consensus was that Goodale would end the favourable tax treatment.

The CBC story only quotes 1 individual who's willing to give their name. There are no doubt dozens and dozens of other forensic accountants who wouldn't conclude there was a leak. Has this guy even done any regression analysis on the timing of the announcement and the change in prices for shares and trust units?

I noticed you didn't post the entire CBC story, or the silver lining part:

"Market Regulation Services, which monitors trading activity on the Toronto Stock Exchange, said it noticed unusual trading activity on Wednesday and is looking into it. A spokesperson said the spike in trading activity doesn't necessarily mean that something is amiss."

Enough with the illegal talk. It's just the media trying to raise ebrows about anything they can.

Plenty of people hold dividends for income, outside of an RRSP or a RRIF.

If you don't like income trusts then say so, don't go off spreading accusations of guilt without anything besides circumstantial proof.


From: Sask | Registered: Nov 2005  |  IP: Logged
Merrick
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posted 25 November 2005 09:49 PM      Profile for Merrick        Edit/Delete Post  Reply With Quote 
It's not proven, but there was enough to warrant an inquiry. That's why they are looking into it. This is a very serious matter if there has been illigal activity. Time will tell.

A proof is a proof....

Besides, if they say anything that in any way remotely slanders the liberal party they'll pull out the laywers and sue the TSX and anyone whose name is attached to the report. lol

[ 25 November 2005: Message edited by: Merrick ]


From: Canada | Registered: Nov 2005  |  IP: Logged
DrConway
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posted 25 November 2005 09:51 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
Are you denying that the Liberals have been well-known for helping out well-connected fat cats in this country? The same party that threw around government money in Quebec in a misguided attempt to buy their loyalty, and in the process, helped some well-connected Liberals, would probably have no problem tipping off the big boys about favorable tax treatment coming down the pipe.
From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Ichy Smith
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posted 25 November 2005 09:51 PM      Profile for Ichy Smith     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by 2 ponies, 1 horseshoe:
PG, no one knew what Goodale was going to do about income trusts. Many experts speculated that he would put an end to the tax treatment of the trusts to stop the loss of revenue; just because the Star expected an unfavourable change to trusts vis-a-vis tax treatment didn't mean the consensus was that Goodale would end the favourable tax treatment.

The CBC story only quotes 1 individual who's willing to give their name. There are no doubt dozens and dozens of other forensic accountants who wouldn't conclude there was a leak. Has this guy even done any regression analysis on the timing of the announcement and the change in prices for shares and trust units?

I noticed you didn't post the entire CBC story, or the silver lining part:

"Market Regulation Services, which monitors trading activity on the Toronto Stock Exchange, said it noticed unusual trading activity on Wednesday and is looking into it. A spokesperson said the spike in trading activity doesn't necessarily mean that something is amiss."

Enough with the illegal talk. It's just the media trying to raise ebrows about anything they can.

Plenty of people hold dividends for income, outside of an RRSP or a RRIF.

If you don't like income trusts then say so, don't go off spreading accusations of guilt without anything besides circumstantial proof.



For them to announce they are looking into it is a pretty good indication that they think something is happening. Of course they are still looking into Bre-X so don't hold your breath for a fast result. And anyway it doesn't have to be a Liberal who let the news out, it could simply be a clerk or someone.


From: ontario | Registered: Oct 2005  |  IP: Logged
West Coast Tiger
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posted 26 November 2005 08:53 AM      Profile for West Coast Tiger     Send New Private Message      Edit/Delete Post  Reply With Quote 
I can't wait to find out the results. Smells fishy.
From: I never was and never will be a Conservative | Registered: Aug 2005  |  IP: Logged
Nes Lessman
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posted 27 November 2005 12:52 PM      Profile for Nes Lessman   Author's Homepage        Edit/Delete Post  Reply With Quote 
quote:
Clearly some people had better information than others about what has happening and there is only one place that information could have come from: the nation's capital.

How else are we to explain the sharp jump in the price of income trusts over the past few days, a rise that climaxed on Wednesday, the day of the federal government's announcement that there would be no new taxes on income trusts. On Wednesday, the S&P/TSX capped trust index rose by 1.49%, with the bigger business trusts posting even larger gains. For the week ending Wednesday, the index was up by 3.61%.

And how else to explain the action in the high dividend-paying stocks, such as BCE, on Wednesday. The stock, which hit a six-month low the previous day --jumped by 4.9% on Wednesday, on twice the normal volume.

To put that gain in perspective: It is BCE's largest gain in four years and it occurred on the day that announcements are made. Readers can work out whether it was a coincidence.



Let's just start growing bananas. We've already got the corrupt banana republic govenment.

Oh no, this election shouldn't be about corruption. Or so the liberals would have us believe.
Mr. Squeaky Clean Ralph Gooddale doesn't seem so clean anymore.
He was also caught lieing about the seniors pension benefits not going up if there was an election now. Which was kinda strange because the bill was already law last spring.


From: WPRK | Registered: Nov 2005  |  IP: Logged
DrConway
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Babbler # 490

posted 27 November 2005 07:46 PM      Profile for DrConway     Send New Private Message      Edit/Delete Post  Reply With Quote 
PS. People who haul out the old "senior citizens get hurt if we fix this!" defence in trying to justify abuses of the tax system are just like PETA using cute cuddly baby seals to provoke an immediate emotional reaction without serious consideration for what's going on.
From: You shall not side with the great against the powerless. | Registered: May 2001  |  IP: Logged
Ichy Smith
rabble-rouser
Babbler # 10594

posted 27 November 2005 08:27 PM      Profile for Ichy Smith     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by DrConway:
PS. People who haul out the old "senior citizens get hurt if we fix this!" defence in trying to justify abuses of the tax system are just like PETA using cute cuddly baby seals to provoke an immediate emotional reaction without serious consideration for what's going on.

Who exactly is abusing the tax system? The Finance Minister and his Department were involved in the discussions setting Income Trusts up, and his department has given opinions and okayed every deal. So then this fool decides HE made a mistake and this may cost the Government income. So then the bloody idiot makes an announcement that knocks 20% off the value of an entire sector of the Toronto Stock Exchange. His one stupid announcement cost Millions of taxable dollars. So then there is going to be an announcement, as he tries to buy some votes, and the idiot Finance Minister allows a leak and the price shoots up before the announcement. If it is determined to be serious one of the possibilities is that all the trades for that afternoon will be rolled back.

Now there is a little problem that peoples pensions are invested in this stuff. It also speaks to the credibility of our stock market, and our country. This country already looks like a Banana Republic, only not quite as well run with the idiosyncrasies of Liberal Rule as it stands. Do we really need help from the sublime incompetence of a finance minister litke this?


From: ontario | Registered: Oct 2005  |  IP: Logged
abnormal
rabble-rouser
Babbler # 1245

posted 27 November 2005 10:00 PM      Profile for abnormal   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
To date there have been exactly two advance rulings by Revenue Canada concerning the tax treatment of certain transactions that have ever been reversed after the transactions had been entered into. In one case the transaction was not the same as the one approved by the ruling and in the other case there were some ownership interests among the various parties to the transaction that were not described in documents submitted to the government. In effect, Revenue Rulings were seen as having (almost) the force of law since it would effectively take an act of Parliament to overturn one, and "everyone" understood how disasterous that could be for the Canadian economy.

Turning to income trusts the Finance Minister, through his department, has okayed every single transaction. And it's not just one transaction he's blessed, it's something in the order of 17% of the entire market. He can't claim ignorance. And he can't disclaim responsibility for the growth in income trusts. Make something attractive enough and people will invest. Governments try to do that with tax policy all the time.

Like it or not, people make investment decisions, both personal and professional, based on rulings made by Revenue Canada. Individuals purchased these things for retirement planning purposes, and pension funds purchased them as well. Why? Because not only did the tax treatment of these things make them attractive but the Feds had given them their blessing.

If the Minister were to announce that he'd reversed his position on the tax treatment of income trusts, how could anyone be expected to believe that the Government wouldn't arbitrarily change their mind about the tax treatment of something else? And if people, both in Canada and elsewhere, start worrying about that, how can they be expected to make any kind of serious committment to the Canadian economy?


From: far, far away | Registered: Aug 2001  |  IP: Logged
Ichy Smith
rabble-rouser
Babbler # 10594

posted 27 November 2005 11:11 PM      Profile for Ichy Smith     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by abnormal:
[QB]To date there have been exactly two advance rulings by Revenue Canada concerning the tax treatment of certain transactions that have ever been reversed after the transactions had been entered into. In one case the transaction was not the same as the one approved by the ruling and in the other case there were some ownership interests among the various parties to the transaction that were not described in documents submitted to the government. In effect, Revenue Rulings were seen as having (almost) the force of law since it would effectively take an act of Parliament to overturn one, and "everyone" understood how disasterous that could be for the Canadian economy.

QB]



I don't know if you are aiming this at me, but if there is sufficient evidence of a leak of the news release from the Finance Minister, and Market enforcement decides there is sufficient damage to the market they not only can but they will roll back the trades on any or all of the Trusts that were traded, for the time they decide the leak occurred until the end of the trading day. The blame can/will be that of the Minister of Finance because that is the only place the information could have come from.


From: ontario | Registered: Oct 2005  |  IP: Logged
abnormal
rabble-rouser
Babbler # 1245

posted 28 November 2005 06:55 AM      Profile for abnormal   Author's Homepage     Send New Private Message      Edit/Delete Post  Reply With Quote 
Ichy,

Wasn't aimed at you - I was actually supporting your earlier statement to the effect that the Minister's earlier stupid statement was aimed directly at the credibility of the Canadian financial system.

If there was a leak fine, I've got no problem with the trades being rolled back. I'd been reading speculation that the Minister was going to give in on the subject for a couple of weeks so I'm not sure if a leak was necessary for people to decide to start acquiring trusts that they thought might have been undervalued. It wouldn't have been hard to conclude that the market had already factored the full tax hit into the price so that things wouldn't go down much, if any, more so selectively buying those trusts that you thought had been hit exceptionally hard would not have been a tough decision.


From: far, far away | Registered: Aug 2001  |  IP: Logged
Alexander
rabble-rouser
Babbler # 8032

posted 28 November 2005 07:10 AM      Profile for Alexander     Send New Private Message      Edit/Delete Post  Reply With Quote 
Hey as long as the conservatives dont win I cant say it bothers me immediately.

All democracy loving, true liberals should be thinking right now "What can I do to assure that the conservatives DONT gain any power?"

I couldnt give a F about anything else right now except that I dont want conservatives to win!!!

Give me Martin on his worst day and its STILL a million times better then Harper ! That asshole would privatize everything and turn us into the america jr, shit, its already happening with nafta.

I will move from Canada if that piece of S Harper gets in ...


From: Vancouver | Registered: Jan 2005  |  IP: Logged
Ichy Smith
rabble-rouser
Babbler # 10594

posted 28 November 2005 09:44 AM      Profile for Ichy Smith     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Alexander:
Hey as long as the conservatives dont win I cant say it bothers me immediately.

All democracy loving, true liberals should be thinking right now "What can I do to assure that the conservatives DONT gain any power?"

I couldnt give a F about anything else right now except that I dont want conservatives to win!!!

Give me Martin on his worst day and its STILL a million times better then Harper ! That asshole would privatize everything and turn us into the america jr, shit, its already happening with nafta.

I will move from Canada if that piece of S Harper gets in ...



I don't understand the defeatist atitude I see all over Babble. If some of you stopped belly aching about Harper and started putting some of the energy into making Jack win, maybe we could get rid of the crooks and the bigots!!!

Give me a break, you'll move from Canada, hysteria reigns on Babble!


From: ontario | Registered: Oct 2005  |  IP: Logged
lucas
rabble-rouser
Babbler # 6446

posted 28 November 2005 10:20 AM      Profile for lucas     Send New Private Message      Edit/Delete Post  Reply With Quote 
PG quoted an article which stated:

:...It says the cash distributions of the 50 big trusts have exceeded their reported net income by 58 per cent..."

Cash distributions are paid out of cash flow... not net income. As such, distributions are frequently higher than net income as the net income is what is left AFTER distribtions have been paid.

The income trust model is not flawed... but like corporations... there are good ones and not so good ones. Saying that they are all ponzi schemes only serves to highlight your lack of understanding in this issue.


From: Turner Valley | Registered: Jul 2004  |  IP: Logged
HeywoodFloyd
token right-wing mascot
Babbler # 4226

posted 28 November 2005 11:15 AM      Profile for HeywoodFloyd     Send New Private Message      Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Alexander:
I will move from Canada if that piece of S Harper gets in ...

Heh. I sooo can't wait to call you on this.


From: Edmonton: This place sucks | Registered: Jun 2003  |  IP: Logged
Reality. Bites.
rabble-rouser
Babbler # 6718

posted 28 November 2005 11:43 AM      Profile for Reality. Bites.        Edit/Delete Post  Reply With Quote 
quote:
Originally posted by HeywoodFloyd:

Heh. I sooo can't wait to call you on this.


While I agree the chances of Alexander moving are slim, the chances of you getting to call him on it aren't much better.


From: Gone for good | Registered: Aug 2004  |  IP: Logged
HeywoodFloyd
token right-wing mascot
Babbler # 4226

posted 28 November 2005 12:46 PM      Profile for HeywoodFloyd     Send New Private Message      Edit/Delete Post  Reply With Quote 
mutter mutter mutter no mutter mutter comment mutter mutter.
From: Edmonton: This place sucks | Registered: Jun 2003  |  IP: Logged
Nes Lessman
rabble-rouser
Babbler # 11103

posted 28 November 2005 01:17 PM      Profile for Nes Lessman   Author's Homepage        Edit/Delete Post  Reply With Quote 
quote:
Originally posted by Alexander:
All democracy loving, true liberals should be thinking right now "What can I do to assure that the conservatives DONT gain any power?"



You mean both of them?

quote:
Give me Martin on his worst day and its STILL a million times better then Harper ! That asshole would privatize everything and turn us into the america jr, shit, its already happening with nafta.

So why didn't the Liberal liars tear up Nafta like they promised to do?

Why does Martin go to a private health clinic himself?

Btw why has our standard of living fallen compared to the US?

[ 28 November 2005: Message edited by: Nes Lessman ]


From: WPRK | Registered: Nov 2005  |  IP: Logged

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