Thursday, November 02, 2006

Canadian electorate receives another slap in the face

Big kerfuffle here in Canada about the major "flip-flop" (as the media insists on calling it) by the Tory federal government on taxation of income trusts...
I know it may sound like a pretty esoteric subject to be causing such national indignation, but this has the potential to bring down the government even if, paradoxically, this is one of the very few occasions where I actually agree with them and applaud their courage in tackling the issue.
Income trusts are, let's not beat about the bush, a tax dodge, a scam. When huge companies like Telus and BCE realized that they could beat the system and avoid paying corporation tax on their huge earnings by converting to an income trust, they obviously had no compunction in doing so. This is big business, the spirit of the law doesn't come into it.
When the Conservative government got wind that major oil companies, maybe even banks, were also considering the move, they obviously had to act to plug the gaping loophole, despite their specific election pledge of less than a year ago that they would not change the taxation of income trusts.
We are talking here about many millions of dollars in taxation revenue. I never thought I would be saying this, but kudos to Jim Flaherty for having the cojones to stand up to big biz, even at the risk of his job.
The only down-side to it all is that the Canadian electorate is now probably even more cynical about the ability of its elected governments to stick to their brief. Arguably, it may be no bad thing that those who switched to vote Conservative last January as a protest against the Liberal "culture of entitlement" wake up to the realization that, surprise, surprise, they are all the same really, when push comes to shove.
The Conservatives will no doubt be fervently hoping that the voting public will have forgotten all about this by the time a spring election comes along, as seems likely. Or maybe they want to precipitate an election while the Liberals are still in disarray over their divisive leadership campaign.
I just hope it doesn't reflect in an increased abstention rate at election time from an already apathetic electorate.

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