Mr. Speaker, there is a good reason why the United States, Great Britain, Japan, Australia, or any country in the European Union, such as Germany or France, do not allow income trusts. The United States does not allow them because they are disastrous economic policy, and I do not use the word “disastrous” lightly.
Income trusts are corporate greed gone wild. They are a corporate wet dream. No business likes to pay taxes, so these guys have discovered a way to pay none, not just lower taxes but no taxes. The guy who developed this got a promotion. Some young Turk somewhere on Bay Street or Wall Street got a bonus that year after inventing this. I cannot get over how we have allowed this disastrous policy to percolate and incubate until it has reached the magnitude that it has.
The NDP spoke out as soon as it noticed it. I took note when the Yellow Pages converted to an income trust. It was a good number of years ago. I met one of the lawyers who orchestrated the Yellow Pages conversion. He said to me, “You are a socialist”. He asked why we were not screaming bloody murder, that somebody should call the cops, that there was robbery going on. That was essentially his point of view. He asked how we could stay silent on it, did we not read the financial pages? In actual fact, sometimes I think we do not read the financial pages enough because stuff like goes on that deserves to be denounced in the strongest possible way.
Businesses do not like paying taxes, so they argue with government all the time that they should pay less and less. We balk sometimes at that, but they have managed to shift the tax burden successfully over the years. It used to be that roughly 50% of government's tax revenue came from individuals and the other 50% came from business. That has shifted dramatically to 80:20, to 85:15, to where individuals are assuming the overwhelming majority. With income trusts, businesses found a way to pay no taxes and shift all the burden on to the unit holder who would get the revenue.
A lot of people do not understand how simple the income trust concept is. Businesses are putting together a corporate structure where there are nothing more than shells, flow through entities. That is what is disastrous.
This was why our American colleagues, who know capitalism better than anyone in the world perhaps, balked at it. They recognized how devastating this would be for a business if the earnings simply flowed through to unit holders with no commitment to hang on to any of that money for research and development or to grow the business and hire more people.
The obligation is to meet this insatiable demand for increased revenue to the unit holders. They suck the life out of a corporation. They stuck it dry. It is corporate greed at its ugliest, at its worst embodiment. It is the manifestation of greed run wild for short term gain and long term pain. That is why no country in the world would allow it. That is what was wrong—