Mr. Speaker, the NDP member said something that really disturbed me. She said to just let it go and let us get on with things.
I have seniors in my riding who invested money in income trusts, their savings, their retirement money. They were putting that money aside thinking they had the word of a party that was honourable and would keep its promise. They put their money into income trusts in good faith. The money is gone. They lost a big part of their retirement income.
It is hard for me to just say forget about it and get on with things. I find it very difficult to look a senior in the eye and say that the money is gone, it is over, that the Conservatives did not tell people what they were going to do that they said one thing and did another. It would be very difficult for me to say to a senior that it is time to get on with life. It is very difficult for me to just forget about it.
Seniors are a large part of our community. They contribute a lot. They saved for their retirement. They had banked on that income and they were hoping it would continue. That is the main issue I look at. I look at those seniors who were left out in the cold without the income they had planned on, especially after having been given a promise. The promise was broken and they did not have that money anymore. They had banked on sincerity.
What comes to mind is the credibility not only of the Government of Canada which says one thing and does another, but also of our financial sector. It has to be kept in mind that the financial system in any country is based on stability and a government keeping its word. When we look at what happened here, the government gave its word about what was going to happen, that it was not going to tax income trusts or change anything, but it suddenly changed. That really hurts the markets. How can we have a financial system that is very solid and sure when things keep changing all the time? It is very difficult.
When we look at what has been lost, $25 billion went out of people's savings overnight. When we look at the sector itself, what really worries me is Canadian ownership. We pride ourselves on being Canadians and owning our own resources. Suddenly we look at a market that fell down. The value fell out. It is more advantageous for international companies to come in and take over those companies. What was owned by Canadians is gone. It is now owned by foreign multinational companies. There was the concern of about $500 million in tax revenue being lost. That is a serious concern and it is something that had to be looked at. FIve hundred million dollars is a sizeable amount of money.
When we look at what happened in the income trust sector, there has been a takeover of 12 companies. Twelve income trusts are now held by foreign owners. They are no longer held by Canadians, no longer held by the Canadian people who owned income trust shares. Instead the companies were taken up by foreign companies and that $500 million meant about a $6 billion loss in tax revenue altogether.
We were worried about $500 million, half a billion dollars. That is a lot of money, no question, and we had to be concerned about it. What ended up happening is we are losing $6 billion in tax revenue because the companies that bought out the income trusts are foreign owned. They are paying taxes in their home countries. They are taking that from Canada and paying it in another jurisdiction. That is a nice gift to give to other countries, but I do not think it is really right and I do not think it is fair. Certainly not a lot of thought was put into the income trust ban.
We heard about Bell Canada. We heard about the banks. We heard about other companies wanting to become income trusts. I could not agree more that was not something we should allow as Canadians. When we look at these companies, they have to reinvest in the future, especially when we look at IT companies like Bell Canada. Those companies have to put money into research and development so that down the road they can have a better product and do more.
There should have been consultations, but that is unheard of with the Conservative government. The Conservatives just tell us what they think is right and what they want to do. There should have been consultations with the sector to find out what had to be done, where it had to go, what it needed and what we needed as a country. By doing that, we would have had a better idea rather than to ban income trusts outright.
There are some sectors where an income trust would not be a bad thing, for example, a mine or an oil well. When a resource is depleted, there is no need to invest a large amount of money in it. It is just a matter of getting the resource out and flowing it through to the individual investors. That is very important.
I come from northern Ontario. I know what flow through shares have done for mines and for the economy of northern Ontario. Obviously the government does not look at rural Canada with the same affection I do. There is something there, but it has to be realized there is some use to it.
When money starts flowing through to individuals, the money is not lost completely. The rate of return is higher for the end user, but the rate of income tax is higher at the lower end as well. The individual paying the tax will likely be paying more tax than the company itself.
When I look at this, I look at what has happened through the deception that has gone on and the broken promises. I look at what has happened within the income trust sector in Canada and I see a real flushing out of an industry that was truly Canadian. An industry that belonged to Canadian people is being completely destroyed. Why? The government broke a promise. A promise was just thrown away.
Today I think of our seniors, I think of investors who had banked on this based on a promise. Maybe we could make a change and make it worthwhile so that they could regain confidence and faith in the Canadian financial system, in the Canadian government, and in Canada itself.