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May 17, 2007

Income Trusts and Trustworthy Professions

RunningonemptyIf you read Garth Turner's Guzzler post about Dean Del Mastro's car, you may want to check out the portion of the Hansard transcript when Dean Del Mastro decided that Garth Turner wasn't being politically correct in his comments about politicians and car salesmen. And for the total reference junkies in the crowd, here's the Ipsos-Reid study that Garth was referring to, too.

Hon. Garth Turner (Halton, Lib.):
Mr. Speaker, I would like to thank the hon. member for Ottawa—Orléans for his intervention. He is an honourable gentleman and those of us who have worked with him certainly know he is sincere in what he has just said to the House.

Turning to the topic at hand, it has been six months since, out of the blue, the administration imposed a 31% tax on investors and caused their retirement savings to tumble. Some people ask why we, on this side of the House, keep fighting this move. Why do we tell average taxpayers not to give up? Obviously, we could and that would be the easy path but the easy path is not what we are choosing in this particular instance.

I will give five reasons why we think the income tax trust must be stopped, delayed or at least modified.

First, there, but for the grace of the Minister of Finance, go all the rest of us as taxpayers. If the Minister of Finance and the Prime Minister can impose a crushing new tax on personal investments and wipe away $25 billion in private savings and not care and get away with it, then it will probably happen again. One must ask what the next target will be of the finance department to minimize tax expenditures and to maximize revenues. Will it be to eliminate, to cap or start to tax RRSPs? Will it be to impose a capital gains tax, maybe even a modest one, on the massive real estate capital gains being enjoyed homeowners these days? Let us think about it. Without political accountability anything can happen.

Second, this is a simple betrayal. Many people invested in income trusts or increased their stake precisely because the Minister of Finance and the Prime Minister said that it was okay to do this. They said that they would never tax these investments. The man who is now Prime Minister said that over and again and his very words of course caused an increase in the flow of savings into these vehicles. His very words also encouraged many companies to convert into trust, secure in the knowledge, they thought, that a Conservative government could be counted on to keep its word. Now we know differently.

Third, this shows a profound and deep and troubling lack of respect. Such a draconian move by any government demonstrates that it does not care about individual security and, more worrisome for the government, it does not care about property rights.

The Prime Minister and the Minister of Finance knew well what this move would do to the pool of private savings in Canada: that the tax would depress the market value of all trusts and erase capital. However, they did it anyway. What is worse is that they knew a majority of these income trusts investors were seniors who had no pensions and so pension splitting is of no value to these people whatsoever. There is no offset and many of them are too old to recoup their losses. However, those guys did it anyway. A government that so disrespects seniors is not deserving of our respect.

Fourth, this really hurts the political system. The government was supposed to be different. It promised transparency and it promised consistency with no tricks, not getting elected saying that it would eliminate a tax and then not doing it, just steady Eddie government that we could all count on with a populace streak and a new respect for the common voter. That is what we were told but not so much. In a stroke that changed. It is now politics as usual: say one thing to gain support, get into power and do another, and that sucks.

It proves once again that politicians deserve to have the same standing as used car salesmen, which is what the latest survey shows.

Fifth, this unfairness is overwhelming. (1825)

Mr. Dean Del Mastro:
Mr. Speaker, I rise on a point of order. I take offence to what the member just said. There are a number of people, and I am certain a number of people in his own riding, who work in the automotive industry and do not deserve to be drawn into disrespect by that member or any other member in the House in the manner that the member has just done. I would ask him to withdraw his comment.

The Acting Speaker (Mr. Royal Galipeau):
The hon. member for Halton is rising on a point of order?

Hon. Garth Turner:
No, Mr. Speaker, I am on debate. (1830)

The Acting Speaker (Mr. Royal Galipeau):
You have less than a minute to finish.

Hon. Garth Turner:
I thank the member for Peterborough for eating up some time uselessly.

As I was saying, Mr. Speaker, my fifth point here is that we have an unfairness this week that is overwhelming.

This past Monday, the Minister of Finance went to Bay Street and at the modest urging of corporate Canada did a flip-flop and all of a sudden eliminated a $1 billion tax loophole from his budget. Yet, he does not have the decency to stand in this House and even apologize to investors from whom he stole twenty-five....

The Acting Speaker (Mr. Royal Galipeau):
The time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

When this matter returns, the hon. member for Halton will have another four minutes. [Translation]


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