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Geoffrey Walter Clarkson'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 am not sure if I am addressing this email to the proper person, but I want to express my concern about the Federal Government and its lack of a position on Income Trusts.
I am 70 years old, retired and have suffered capital losses in my RRIF, because of Minister Goodale's announcement in September that the Government of Canada does not like Income Trusts. I have not seen anything in the newspapers that indicates he is distinguishing between REIT's, Oil and Gas Trusts and Business Trusts; although maybe he is.
I started to invest in Income trusts about 3-4 years ago because the interest and dividend income I was receiving was very low and the Dept of Finance appeared to be accepting Income Trusts and the payout from them was higher. REITS have been around for a long time and not been challenged (to my limited knowledge) by the Dept of Finance.So I assumed that Income Trusts were a relatively safe investment.
Mr Goodale has indicated that he will reach a conclusion on how to deal with income trusts in the next budget.But who really knows when that budget will be delivered since there is a minority government.This period of uncertainty is unfair to retired persons trying to manage their financial affairs properly.
One of the concerns expressed by Mr Goodale was the loss of tax revenue. If he is concerned about loss of revenue why does he let pension funds carry on active businesses in the pension fund itself and not through separate legal entities owned by the pension fund which would pay income taxes. In particular I am thinking of real estate businesses carried on directly by pension funds and as a result are exempt from income taxes. If he fairly taxed these businesses then he would easily recover the money that apparently is being lost as a result of income trusts.
You have my permission to post this submission on the Finance Canada Web site.I do expect that there are many other seniors in my position.
Geoffrey Walter Clarkson