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Gerry Harley'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 hereby give permission to submit the following submission to the Finance Canada web site.
My name is Gerry Harley, Ottawa Ontario.
Submission as follows:
In reference to Department of Finance review of Income Trusts:
As my wife and I are both retired and only have a small pension and the government pensions for income, We have found Income Trusts to be the only way we have been able to obtain a satisfactory income. We are now able to enjoy our retirement without fear of becoming a burden to our children or to society.
Without Income Trusts, I would have to find work (I am seventy years old) to augment the income we could derive from conventional investments such as stocks, mutual funds, treasury bills, bonds or GIC's.
In the case of stocks, there is too much risk involved, for Mutual Funds the return are limited and the expenses are high, for Treasury bills, bonds and GIC's, there is insufficient income
We have found that Income Trusts have enabled us to achieve a steady income and to greatly improve our lifestyle. And even though we are now in a higher tax bracket and are paying more taxes, we are pleased to be in this position.
Our prior experiences with investing in mutual funds and stocks through brokers were not successful. The only winners were the mutual fund companies and the brokerages that collected their fees while our net worth hardly kept up with inflation. . (I suspect that financial institutions such as Mutualfunds, Brokerages and Banks may be putting pressure on the government to change the Income Trust status, as they are the only losers since Income Trusts have been available.)
There are many thousands of investors in income trusts who are retired or planning to retire and who rely on distributions to maintain their incomes and/or to reach their retirement objectives.
To meddle with this established trust structure in a way that will negatively effect these retirees and investors will have severe repercussions both politically for those in power and financially for those who have invested in these trusts.
Just the fact that Mr. Goodale has indicated (in what I believe was an irresponsible manner for one in his position) that changes may be in the works caused the income trust market cap to drop significantly. This in turn lowered the net worth of thousands of retired investors who rely on Income Trusts to supplement their income and thousands of investors who are striving to prepare themselves for a secure and comfortable retirement.
I believe Mr. Goodale should leave the existing trusts as they are and if changes are warranted, they should be made only for new trusts being created.
A clear statement should be made clarifying that the structure of existing trusts will not be changed so that the current trust market can continue to prosper as it has done since inception.
My wife and I, our family, relatives and friends who are invested in Income Trusts will not support any political party that messes with and limits the value of these trusts for investment purposes.