In 2005, the Canadian Association of Retired Persons (CARP), otherwise known as Canada’s Association for the Fifty-Plus, did not come out with a terrible strong call for protection of income trusts against new tax.  Now in 2006, seeing the consequences of new taxes on the savings of Canadians, CARP has changed its position.

In a press release, CARP urged “the Government to exempt all current income trusts from its new tax regime, as it has done for Real Estate Income Trusts (REITS).”

The suggested that, at a minimu, the proposed 4-year grace period for current income trusts before the new tax regime is imposed, should be extended to 10 years. They propose that, “such an adjustment will allow seniors and those who are preparing for retirement with investments in income trusts more time to make appropriate financial adjustments. This is what CARP is hearing from many members, especially women whose life expectancy in retirement is greater than that of men.”

On the other hand, extension of the deadline would “not undermine what the Government is trying to achieve with its new tax policy to prevent the creation of new income trusts,” according to CARP. And a 10-year grace in Canada would be as fair as the approach taken in the US.  In 1987, the U.S. imposed a tax regime on publicly traded partnerships that were flow-through entitities similar to income trusts. And the form of investment was essentially run out of the market.

CARP said it represents over 400,000 members, who are “50 and older, retired or still working, and works for the benefit of 11 million older Canadians. A non-profit, national organization, CARP does not receive operating funds from any level of government. Its mandate is to promote and protect the rights and quality of life for mature Canadians. Its mission is to provide practical recommendations for the issues raised.”.

It seems much larger and more oganized than the organization that claimed to represent senior citizens when a representative stood beside NDP party offocials to call on the government to put a stop to income trusts, prior to the trust tax announcement.