RESEARCH ARTICLES
QUOTE:
“Either they didn’t do their homework [about trusts] and didn’t understand the issue, which means they are incompetent, or they did look at it and they flat out lied…You’ve either got an incompetent government or a bunch of liars.”
Trusts provide a “very good business model”, but “executives who support Ottawa’s tax changes just don’t understand income trusts”.
Article about Executive Survey
By Richard Blackwell
Report on Business, Globe & Mail
A quarterly survey of 175 chief executive officers, chief financial officers and chief operating officers was done by the Gandalf Group for Report on Business and ROB-TV. According to newspaper reports, the study showed that there is both “a dramatic split among those who back Ottawa’s move and those who dislike it” and has significantly diminished both trust and non-trust executives’ confidence in the government.
Statistics indicate that, “The [tax] ruling has emerged as a divisive issue, pitting those who run trusts against those in non-trust businesses, according to a new survey of top executives.”
The Ontario Teachers’ Pension Plan has advocated for a taxation policy on income trusts that does not discriminate against pension funds, and is “pleased to see that this is the case with the government’s announcement yesterday (October 31, 2006).”
In a letter to members of the media, a trust investor is ”hopeful that...[new information and a fresh analysis will help enable] a more detailed factual analysis of the well publicized changes which the federal government is proposing to undertake in the area of income trusts taxation.”
The firm Blake, Cassels & Graydon, LLP issued a bulletin entitled ”Canadian Minister of Finance Announces a Proposed New Tax Regime for Income Trusts and Public Limited Partnerships - November 2006”.
They say, ”On October 31, 2006, the Minister of Finance announced significant changes to the taxation of publicly-traded income trusts and partnerships. These changes have been brought on by the recent announcements of a number of large Canadian public corporations that they intended to convert into income trusts. However, the Minister also said that the proposals are the result of “months of careful consideration.” The Minister has concluded that, although the 2006 federal budget proposal reduced the rate of federal income tax on dividends received by individuals, this did not sufficiently overcome the benefits to corporations of converting into income trusts because the reduction did not address the significant tax advantages enjoyed by non-residents and tax-exempt investors. As a result, the new proposals create a tax regime for publicly-traded trusts and partnerships and their investors that is similar, but not identical to, that for public corporations and their shareholders. And then the specific details are provided without opinion from the Law firm.