Finance committee  Yes. When you borrow money to pay an investment return above earnings, that's commonly referred to a Ponzi scheme. That's why Prudential took a $2 billion settlement for communicating in their marketing materials to seniors that these were extremely attractive cash distributions, without referral to the return on capital.

Finance committee  I would say that the RCMP and provincial and municipal police forces have the tools within section 380 of the Criminal Code today to call the deceptive cash yields...as has been said by the chairman of the Canadian Accounting Standards Board and by Paul Hayward, OSC senior legal counsel, who said in a tax journal in 2002 that an investigation could be conducted and fraud could be found.

Finance committee  The point I would make is that the income trust product was to the substantial benefit of the vendors and promoters of income trusts. Basically, they converted into income trusts businesses for which they were selling out of the market, taking the cash up front. In addition, the investment banking industry and the securities legal community that supports the income trust industry have taken out exorbitant fees, at the rate of 7% for every cash financing pass.

Finance committee  My research has me conclude that I support the income trust tax plan and I do not support an extension of the grandfathering period. I believe there are permanent government tax losses as a result of permanent loss within tax-deferred accounts, both RRSPs and pension funds. I believe that the research indicating there would be more future taxes collected than foregone today is not credible.

Finance committee  Thank you. I support the income trust tax plan, with no increase in grandfathering beyond four years. I strongly urge that the income trust tax plan be enhanced by the addition of prescribed conditions to the Income Tax Act to stop income trusts from reporting deceptive, non-gap financial measures.