As campaign slogans go, Expect More ranks right up there with the best of them. Simple, to the point, and full of hope. Will the government listen?

It's Time to Expect More is the latest move in the income trusts' attempt to bring the government to the table for meaningful consultations on tax changes that have adversely affected millions of Canadians. Sponsored by the Coalition of Canadian Energy Trusts, the campaign has been launched in Conservative heartland. Radio and print ads will play out over the next five weeks in Calgary. Plans are afoot to roll the campaign out beyond Calgary and into other provinces if enough interest is aroused.

The ads encourage Calgarians to send letters to their MP. The letters end by saying

This is about more than energy trusts in Alberta. It's about demonstrating honesty and respect for Albertans. It is never too late to get it right!

True enough. To add your voice to the campaign, click here.

EhBC:

To give you some perspective my portfolio is up 2.3% for the year. No one in their right mind id fully invested in this market. If you are down only 3% there is a good chance your portfolio will recover. You have to get red of the Trust's that have a high pay out ratio when the time is right. I took a loss on TPW.UN. I just purchased FCE.UN. You can see my strategy. Preferred share continue to recover.

Pierre Trudeu was re-elected after he told the bigest lie in Canadian history. John Cretian turned lieing into an art form. He told the same lies over and over. He got re-elected over and over. There must be some logic to this.

WestWind2:

Lashing out in all directions?  I don't think so.  I have asserted that Flaherty's "Tax Fairness Plan", which he claimed on the basis of bogus study would prevent $500million annually in tax losses, is demonstrably unfair and will actually create significant annual tax losses.  Everything I have posted has been to support that allegation, and most of it has been to address comments you have made.  The result has been some lengthy, perhaps even long-winded posts, but it is hardly fair to characterize them as "lashing out in all directions".  Incidentally, while my critiques may have been extensive they are far from exhaustive.  There is a lot of material at http://caiti-online.blogspot.com/ that you might be interested in.  (Be prepared to spend several hours).

As for me attacking you personally, well, I suppose accusing you of being a Tory operative when you aren't could be construed as a personal attack.  I would be more inclined to call it an insult myself, but regardless, I retract the comment and apologize for it.

Not that it matters, but no, I did not sell my trusts after Flaherty's Folly played itself out.  My portfolio was down 20% after the income trust tax was announced, as of Friday it is down 3%.  According to you and the Tory spin-doctors, that means I have now recovered and have not lost anything.  I disagree emphatically, for 3 reasons.

1. The TSX index and the Income Trust index are both up about 16% since the trusts took the big hit.  Conclusion, if Flaherty had not imposed his tax my portfolio would now be up around 16% instead of being flat.  Had the general market gone down 10% instead and I tried to blame my whole 30% loss on Flaherty's tax the Government's apologists would, quite rightly, point out that Flaherty was not responsible for the last 10% of it.  Well, neither can he deny that he is responsible for the fact that my portfolio is not 16% higher than it was October 31.  The bottom line is income trusts are not worth as much as they were before he introduced the tax.   The $35 billion of wealth destruction Flaherty inflicted is no myth, it is still with us, systemic and permanent.
2. Since the tax was announced, I and other income trust investors have absorbed significantly more in distribution cuts than we have received in increases.  In other words, our monthly income is down, substantially.  Perhaps not all of the cuts are Flaherty's fault, but there's no denying a big portion of them are, and who knows what increases we might have received but didn't because of his action.  This loss is permanent and will never be recovered, unless you make the ridiculous assumption that somehow the tax will ultimately stimulate the values and distribution capabilities of the trusts.
3. The real pain is yet to come when the tax is imposed.  The tax means that for those investors who have their savings in registered plans will see up to $.65 out of every $1.00 received in distributions go to taxes; 30% on distribution by the trust and the rest when the funds are withdrawn.

I have trouble understanding why it matters whether a decision is made for technical or political reasons. Are politicians never to be held accountable for anything?  If significant promises are broken for reasons that do not stand up to logical analysis, have severe negative consequences, is "it's only politics" really all the justification that needs to be offered?  The bottom line remains;

• the Tories imposed a tax they emphatically and frequently promised they wouldn't,
• they refuse to reveal the details of the study that purportedly justifies their action,
• their analysis makes the ridiculous assumption that registered plans do not and never will generate any tax revenue,
• other publicly available, fully transparent studies that have not been credibly challenged contradict the government's position.

If the government believed their analysis and acted accordingly, they are reckless and incompetent.  If they did not believe it and have passed the act for other, undisclosed reasons they are liars.  Either way, they are not fit to continue in power.


Regards

EhBC

EhBC:

You are lashing out in all directions. You are expecting a technical debate on a political subject. Expert opinions on the size of the tax leakage just do not make a lot of difference. The decision is a political decision. You should not attack me personally. I am a private individual and represent no one but myself. I have a point of view that is different than your s. I hope my opinion is of some value to you. I was fortunate enough to profit from the incident because my investments were conservative and diversified. I suspect you sold your Income Trust’s when the price went down. I was very tempted to do that myself. I chose to keep my Trust’s and had the courage to purchase more while the price was down. I was fortunate that the price recovered.

Investing has a lot to do with politics. Governments are prone to making abrupt changes in policy that affect the value of your investments. This is why we diversify. When “Wage and Price Controls” were an issue the government made it a major election issue and promised not to implement them. Within months of being elected the government changes it’s mind. A lot of people lost a lot of money. This was the biggest lie that was ever told in Canadian politics. Looking back on the issue, I think it was the right thing to do at the time. Lesson learned: governments make decisions that they perceive as being for the greater good of Canada. Technical arguments do not always affect political decisions.

You cannot ignore the fact that you were unlucky and you made bad decisions.

My point of view is simple. Any one who owned conservative income trusts on October 31 and had the courage to hold on to those Trust’s, has now recovered all of their money. The market price of trust’s dropped when the decision was announced but most of them have recovered. The $25 billion loss is a myth. It was only a temporary drop in market value.

Interest rates (a decision of the bank of Canada) had a similar affect on Preferred Shares about a month ago. I lost $3000. As of today I have recovered about 60% of the loss. Government decisions affect the market every day.

• Sam - an American investor of average means.  Paid US income tax, but as a non-resident of Canada filed no Canadian tax return.
• James - a wealthy fifty-something lawyer with a well-diversified investment portfolio.  Some of his investments, including his Ingawdwy units, were in a self-directed RRSP, but he also had a substantial non-registered investment account.
• Sheila - An ex-MP newspaper columnist of somewhat-better-than-average means (she declines to disclose her age).  All her savings, including the Ingawdwy units, were in an RRSP.
• Jane - a 65 year old widow of modest means.  Her income consisted of her survivor CPP, OAS, and the income from her Ingawdwy units that she held in an RRIF.  Her annual income tax bill was typically about $500.

EhBC:

You are very excited about this topic. I have to assume that you lost money on Income Trusts. As an investor I can share your pain. I just lost $3,000 on Preferred Shares. But like the Income Trusts, Preferred shares (if they are quality investments) will recover. Investing is taking risk. You have to have a lot of different strategies to succeed. If you have more than 15% of you portfolio in Income Trusts, you are taking a huge risk. You don’t win all the time.

I didn’t mean to discard your study so lightly. I’m sure that some very talented people burned the midnight oil to come up with a projection. The whole purpose of the exercise was to prove how large the tax leakage was. These studies remember are only projections. They are based on assumptions.

You must admit that there is tax leakage. The tax leakage is sufficient to encourage BCE, and Telus to spend a small fortune to convert. The exact size of the leakage is really not that important. It is now a thing of the past.

Governments are voted into power to provide leadership. The decisions they make are not always popular. Wage and Price Controls, Free Trade, The National Energy Program, and the GST are all examples of government leadership. Some of these decisions are still with us today. Others were short tem solutions. Income Trust will be taxable after 2012. That’s not going to change. If you still own your Income Trusts you are probably getting more than 5% dividend. Don’t underestimate the value of the dividend. You can afford to wait until the price recovers as long as the company is making money.

Good investors look ahead to the next paradigm. They don’t dwell on the last one.

Wage and Price controls, in case you don’t remember, were implemented within month of an election. During the election Pierre Trudeau promised vehemently that he would not implement Wage and Price Controls. Sometimes politicians have to break their promises. I believe it was justified at the time. No one really knows what the studies proved.

I have projected my income for 25 years. Under the new budget my wife and I will bring in about $70,000 a year and pay about 12% tax for the rest of my life. The government can only give seniors tax breaks like that when they tax all companies fairly. Getting rid of tax havens will help also. The money that I put into my RRSP gave me a tax deduction of 24%. Seniors are well served in this new budget.

Shamrock:

The NDP is in favour of taxing Income Trusts. Which side are you on?