Thank you for holding these hearings, and holding those responsible.
Five minutes is barely sufficient time to make the points I need to make; hence, the prepared comments.
Our association represents the interests of the 2.5 million Canadians who are directly and negatively affected by this policy and who will sustain the $35 billion hardship the so-called tax fairness plan will inevitably result in. If only this policy had purpose and reason--purpose and reason supported by fact. To quote the Auditor General of Canada, “parliamentarians need objective fact-based information on how well the government raises funds”, namely, taxes.
We also represent the interests of the 70% of Canadians who are not members of defined benefit pension plans, unlike our elected representatives and members of the civil service, of which there are 280,000. We are the only association coming before you in these hearings representing the interests of Canadians in a way that is credible and free of commercial influence. Please hold others to this standard, or at least take this into consideration when weighing their testimony.
Providing for retirement income in a protracted low interest rate environment is not an easy task by any means. This is why income trusts have emerged as a popular retirement investment vehicle. The made-in-Canada income trust phenomenon is a product of investor pull and not issuer push. This is why income trusts need to remain as a vibrant and sustainable part of the Canadian capital markets going forward. People's lifestyles and standards of living are fundamentally at stake. Canadians' lives and hard-earned savings should not be compromised to assist in the narrow interests of corporate Canada and many of its influential persons, regardless of their last names or their privileged access to decision-makers.
The ability to introduce this tax legislation is made possible by only one thing, the enabling document entitled, “The Notice of Ways and Means Motion to Amend the Income Tax Act”. Therefore, anyone who wishes to weigh in on this debate and these public hearings needs to make their arguments in the context of that motion's five stated provisions. Issues that are tangential to those five provisions are just that—tangential issues. Some tangential issues are perhaps worthy of further study. However, in the limited time you have allotted, the scope of this committee needs to be focused on these five provisions, all of which are quantifiable propositions, by the way.
Our pre-submission document submitted nine days ago to each of you in both official languages does just that. It is also available on our website at www.caiti.info, under the tab, “Public Hearings”. I call upon the committee members to challenge me today on any of the points our association has raised in this document that you do not agree with or that you feel need clarification or additional documented support. We need to turn these public hearings into a debate, not a speaker's corner.
Unless I am challenged by you, and until I withdraw any of these points, I will assume that our pre-submission document stands as the authoritative voice on the tax fairness plan. This is government in reverse. The government should be presenting Canada with its thought process and supporting evidence, which Canadians could then challenge and subject to peer review. The burden of proof should rest with the architects of a tax fairness plan. Their seeming unwillingness and failure to do so simply makes the tax fairness plan a false moniker, as it's being advanced on five hollow constructs. Absence of facts creates a void—a void in logic, a void in purpose, a void in reason. We do not intend to fill this void with $35 billion of Canadians' hard-earned savings, nor do we wish to lose the only investment vehicle that has any hope of providing retired Canadians with the ability to maintain their retirement lifestyle after they no longer receive employment income.
I do not come before you as an advocate of income trusts, since only licensed investment advisers are able to advise their clients on what investment products best suit a given investor's investment goals. This is called the know-your-client rule, and it is the most fundamental rule that underlies the Canadian investment industry. The tax fairness plan is an abrogation of this rule, as it will prevent Canadians from investing in what they have determined best suits their investment needs.
Despite condemnations from our Prime Minister and Minister of Finance that Canada not become a nation of coupon clippers, the need for retirement income will go on unabated. Canadians will simply turn to other markets to fulfill these basic needs. The TFP will result in a flight of Canadian investment capital out of this country into other markets, like the U.S. high yield market, and Canadians will therefore be financing the growth and prosperity of other economies, principally the U.S.
Meanwhile, the tax fairness plan has created the perfect storm for private equity investors and Canada's largest pension plans to exploit. The 20% decline in market value and the inevitable forced sale of income trusts as a result of the double taxation of RRSPs under this plan will allow these large investors to exploit small Canadian investors.
This inevitable take-out by foreign private--