Argh! What can you say about knee jerk government policy, based on assumption and biased beliefs rather than deliberate and researched facts.
For those wondering what the freak the big mon from da north be on about, our lovely Conservative goverment dealt a pretty harsh blow during halloween. What we have hear in the great white north is something called an
income trust (
Wikpedia link). Now income trusts were a very popular vehicle for those who are retired/near retired/looking for a little extra regular capital.
Two very large companies here, BCE and Telus, announced near the beginning of the year that they would be converting to income trusts. With that announcement, the goverment du jour here announced that this move by these two large companies signaled a dangerous trend for coporations in Canada. Based on the rationale that the government would loose tax revenues and also that income trusts don't invest back into the economy, these announcements would leave the goverment no choice but to take action. Beginning in 2010, income trusts would started to be taxed similiar to normal corporations.
As you can imagine, income trusts' stocks took a major plunge. Lots of everyday folks lost A LOT of money. Both BCE and Telus announced that they would have no choice but to reconsider their income trust proposals and put them on hold.
Meanwhile, there's been a few ecomonists who have come out with hard data showing that taxes paid by end users end up being more than by a corporation. Now a new study by Price Waterhouse has come out debunking the whole notion that income trusts are cash cows that do not re-invest capital into the economy (
Globe & Mail linky).
Grrr! Nothing makes me hotter than dumb ass moves like this I tells ya. I'm not totally anti-Conservative but this is one of those moves I was afraid Harper's gang would make...put another way, when a party has not been in power for an extended period of time/not been in power, they end up doing some pretty bone headed things. Heck, the Liberals did the same thing after the Mulrooney years.
