Thank you very much. I want to thank the committee very much for allowing us to make this presentation.
CARP is here to bring forward the views of our members and of the hundreds of thousands of retail investors adversely affected by the government's new policy on income trusts. Those actually impacted by the new policy must be represented because they embody the expertise of experience.
You all know who CARP is, I'm sure, so I can go to the next paragraph, if you're following what I'm saying.
CARP recommends that current income trusts should be exempted from the new tax regime, as is the case with REITS, and at the very least current income trusts should be exempted for 10 years, as occurred in the United States under similar circumstances, as Mr. Renkas has just pointed out. This would give retail investors a chance to readjust and redirect their investments without panic and perhaps recoup a portion of their losses.
After the October 31 policy change was announced, CARP received more correspondence than on any other single act by the federal government since the initiative to introduce the senior benefit 10 years ago. By the way, the Minister of Finance at that time courageously rescinded his proposed policy to transform the public pension system. I say “courageous” because he recognized that it was a mistaken initiative.
The correspondence we received reflected anger and outrage and disgust at the government's sudden turnabout after having been promised that the income trusts would not be touched. They expressed fear and panic over the loss of income that they were counting on to live out the rest of their lives, and at their stage of life, how are they expected to recoup it? If the government goes ahead as planned, there will be more loss of income after four years on a regular basis.
It was welcome news when the government promised not to tamper with income trusts, but what they did, and especially how they did it, was unconscionable and totally insensitive to the impact of their actions. Many of the correspondents told us they used the monthly income from those investments to enhance their daily standard of living, being taxed and spending the balance, as you can actually see on this chart here. Some of the large amounts of money, as much as $20,000 to $100,000 or more, were lost through no fault of their own but rather because of the government's new policy.
Many of the correspondents told us about themselves. Like other demographic cohorts, there was nothing stereotypical about them. They ran the gamut in wealth and occupations. Some were retired chefs, or taxi drivers, or truck drivers, or small business persons--because a lot of women corresponded with us on this issue--who had worked long and hard to accumulate their own personal retirement savings without the benefit of corporate or occupational pensions. Often, their savings were insufficient to meet their daily cost of living so they invested in income trusts. They also had to augment their retirement income so they would not outlive it. Others were more affluent or had income from a corporate or occupational pension, but they wanted to grow their retirement income. The human cost of the change in policy must not be forgotten or ignored in all of these figures.
What I'd like to do now is to very quickly read what some of the people have been telling us in the correspondence. I don't have enough time to read all of it, so I'll just pick some excerpts.
On page 4, this is a letter that was sent to Mr. Harper:
Like so many senior citizens, I have no pension income and have to rely on my savings. In addition to the totally inadequate income from CPP, I, like so many others, have relied on income trusts, which are the only source that up to now offered a decent return. Your recent announcement cost me $20,000 of my hard-earned savings. In fact, that pales in comparison to the losses other seniors have suffered. I don't think I and hundreds of thousands of other seniors can ever recover from the loss you inflicted.
On page 5, at the very top:
I'm a retired widower who worked hard all my life, paid my taxes, never took a nickel back from this country until my pension started. I planned for my retirement, invested according to the laws of the land, and was encouraged by Harper's anti-Liberal rantings when they thought out loud of taxing the trusts. I pay almost $10,000 tax yearly on my income trust income--note, at a higher rate than any corporation would have paid--and I'm sure thousands of small retail investors like myself do the same.
Further down, third paragraph:
I cannot, under any circumstances, bring myself to vote for a government that lied to me and then proceeded to steal over $100,000 from me and my family, money that it took me--