The Canadian Association of Income Funds (CAIF) has written a letter to members to launch a “multipronged action plan,” to “set the record straight”. With a paid advertising program, the association of trusts will hire “third-party experts” to dispell negativity about trusts.

The tactic appears to involve a more professional tone and less political stance than taken in 2005. During the Department of Finance Consultation process, then, CAIF hired a public relations firm to coordinate individual investors in a television campaign to show that citizens like income trusts.

On October 18 this year, the group’s chairman, Paul Hollands of A&W Income Fund wrote to members to suggest that the group respond to the widespread “negative media coverage” that talks about trusts in terms of being “problems.”

The letter and communication initiative appears to respond to analysis by Jack Mintz from the Rotman School of Business to suggest that trusts are costing tax payers $1.1 billion per year in lost taxes.

Mr. Hollands said that, “leakage from income funds is patently wrong.” And he goes on to refer to the study previously done for CAIF by a consulting company, HLB Decision Economics Inc.. As part of their report and the CAIF proposition during the 2005 Department of Finance Consultation, HLB suggested that the tax implication of trust conversions is roughly “break-even” for Ottawa.

The CAIF study does not address provincial tax losses in the way that the study does by Mr. Mintz. However, the scope of the Mintz research fails to address the economic value and growth effects related to income trusts.