Flaherty's mindblowing hypocrisy

Jim Flaherty wants to raise CPP premiums. He says Canadians aren't saving enough. Ironic that it's Flaherty himself who caused pensioners to lose $35 Billion in savings, by killing income trusts in a surprise announcement on October 31, 2006. Less than a year before, the Conservatives had run on a platform that included a promise never to tax income trusts. It took them mere months to break that promise and send the sector into a tailspin.

Income trust investors were villified as the "wealthy" few, making use of a "tax loophole" to justify the move. Nothing could be further from the truth.

An income trust is like a corporation with one major difference. Instead of paying dividends to shareholders once a year, trusts pay out all of their profits to the unit holders on a monthly basis. The rate of return is much higher with trusts, with 10 - 20 percent being the norm. If that sounds like profit sharing, that's exactly what it is.

But Flaherty claimed there was "tax leakage", because the trusts' profits were not taxed. Again, that's not true*. The profits were taxed as income to those who actually received them, ie the unit holders. Taxed at the personal rate, which is higher than the corporate rate. So in fact, Revenue Canada was actually netting more from income trusts than it was from regular corporations.

So what's not to like? Ordinary people get to participate in profit sharing. Pensioners receive a monthly income in the form of distributions. More taxes are collected. Everybody's happy.

Well no, not everybody. The big life insurance companies were upset. Retirees were becoming more and more enthusiastic about income trusts, and less so about the Lifecos' products, namely income annuities. I worked briefly selling life insurance. Annuities suck.

But the Lifecos launched a very successful lobbying campaign, easy to do when your CEO's are on the board of the Security and Prosperity Partnership and planning strategy with the Finance Minister.

In the wake of the announcement that trusts would be effectively double-taxed, the sector plummeted overnight, and $35 Billion went up in smoke. There was also a rash of foreign takeovers, predatory leveraged buy-outs by Goldman Sachs and the like, layoffs and the impoverishment of many ordinary Canadians who took the government at their word. So much for trying to provide for your own retirement.

Flaherty's justification was that he didn't want a nation of coupon clippers. No, a nation of Walmart greeters is so much better.
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* Requests for proof of tax leakage were fulfilled by the now-familiar blacked-out documents.

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Rahim Jaffer - networking powerhouse!

Mum's the word, eh Rahim?

More information is trickling out about Rahim Jaffer today.

1. Jaffer used a cabinet minister's limo for his own private use.
Guergis' former government-assigned, taxpayer-funded chauffeur said he frequently drove Jaffer around after dropping Ms Guergis off at her office on Parliament Hill. He has asked for anonymity, as he doesn't want to jeopardize his current job. He never said a word about the misuse of government property at the time because again, he didn't want to lose his job. Is this the mysterious "third party"?

2. Jaffer used a government office to conduct business
This according to his business partner, Patrick Glemaud. But don't worry - it was just "a cluttered room across from the offices of his cabinet minister wife" reports the Globe and Mail. Oh well, if it was cluttered, that makes all the difference. Note that Guergis herself confirmed that Jaffer had used the office, but "strictly to sort out his papers after he lost his seat. The two were between homes, and didn't have a place for him to send his boxes for a few weeks." Didn't have a place? What is that supposed to mean? Oh dear, if only they'd known about this place.

3. Jaffer's meetings with John Baird and other high-ranking Tories
In Question Period today, Anita Neville, Liberal MP from Winnipeg asked “On Sept. 3, 2009, the minister (John Baird) met with Rahim Jaffer in Ottawa. What did they discuss and were those discussions reported to the Commissioner of Lobbying as required by law?” Baird said they didn't discuss business, but what else would he say? I might believe this more if he said they were exchanging crack recipes, although I've always thought Baird's problem was 'roid rage.

Marcel Proulx, a Liberal MP from Quebec, told the House that Mr. Jaffer had attended a reception for Christine Elliott on April 30, 2009, when Ms. Elliott was campaigning to be Ontario’s Progressive Conservative leader.

Ms. Elliott’s husband, federal Finance Minister Jim Flaherty, and Lisa Raitt, who is now the Labour Minister but was then minister of natural resources, were also at that reception, said Mr. Proulx. He demanded to know what discussions the ministers had with Mr. Jaffer and whether they reported them to the Commissioner of Lobbying.

4. Two Blackberries are better than one
This one is no real biggie - I just found it amusing in light of Tiger Woods getting busted by his wife for "sexting" numerous girlfriends. Clever Rahim is not about to get caught in that particular trap because he has two Blackberries: one for communicating with wifey and one for busty hookers bizz. 

Enter spin mode

More apologies and spin coming from the Globe & Mail today: Jane Taber's article in which she laments the "portrayal of Ms. Guergis in the media as the ditzy blonde beauty queen with the little-girl voice who didn’t deliver in her portfolio." So unfair, as this video clearly shows.

Their editorial of yesterday actually stated that Mr Harper doesn't know enough about criminal law to tell the public why he called the RCMP. I wish I were making this up. "It is not within the normal duties or skills of a prime minister to formulate and announce suspicions of criminal wrongdoing." By that logic, if I find someone breaking into my house, I should keep quiet about it since it's beyond my expertise to announce suspicions of criminal wrongdoing.

Response from the rabid partisan blogosphere has been swift and sure. You have to admire the great minds at work here.... or not:

1. What's the big dea? They all do that.
The CPC's Accountability Act states: The FAA prohibits senior public officials from engaging in lobbying for 5 years after their employment has ceased.

2. This is nothing compared to Adscam
The Liberals paid the price for that, and now it's your turn.

3. It's just another false scandal.
Oh, you mean like the Afghan detainee torture thing?

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