Archived information is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.
Noel Chaney's Submission in Response to Finance Canada's Tax and Other Issues Related to Publicly Listed Flow-Through Entities (Income Trusts and Limited Partnerships) consultation:
I'm very concerned about the recent government activity regarding income trusts.
My wife and I are both retired and rely on trust income to survive. We have a small pension but the money we have invested in RRSPs and regular accounts provides the bulk of our income. Most of that investment income comes from trusts.
Being that interest rates are so low and there are few good dividend paying stocks available to us in Canada we have turned to these investments as our main source of income in the last few years. During that time it appeared that the market and the government was supportive of the trust market as it was developing in Canada so we have increased our holdings in these investments over the last couple of years.
As of 2005 it had become apparent to us that our income future was going to be relatively secure. Since Mr Goodales anouncement last week that has been thrown into doubt for us again.
We would like to continue to participate in and support the resource development business in Canada as well as a few of the businesses that we like, when we can do so and receive a reasonable income stream from our capital. The trust model offers an excellent vehicle for this purpose. We want to support our country's industries in an equitable way that will meet our needs too.
I do not understand the issue about lost revenue because we are making more money and paying far more taxes now than we were previously when holding common stock and mutual funds. Most of my trust income is taxed at the highest rate and not at the dividend or capital gains rate. Not to mention that my wife is supporting the local businesses better than in the past also.
I could understand doing something about ROC administration because too many investors don't know how to keep track of it. That might be better tracked on T3s. That certainly doesn't require an announcment of this magnatude and this disruption of the capital markets.
These trusts are critical to our financial survival so please be careful in what you do. I'm most concerned about the approach taken to date and the impact it has already had on a fragile nervous market. We need clarity and stability in this market from the government regading the trust market so I hope there will be a very prompt resolution to this issue, whatever it is.
Be assure that if the result of this action causes further financial hardship, to us or our family, it will be reflected in our votes for many years. it will also cause us to move capital to other than Canadian markets, out of necessity, to assure the stability we require to maintain our income.
This may be reprinted or published
Regards Noel Chaney