Finance Minister Ralph Goodale flip-flops on the income trust issue would make Senator John Kerry very proud:
- Mr. Goodale reversed the proposal made in the 2004 budget on limits to investments in income trusts by pension funds.
- Back in September, he announced that his ministry is studying the tax leakage issues surrounding the sector. Just this week, facing an imminent defeat of his government, he decided that he wouldn’t tax the sector after all. He also announced a dividend tax cut to level the playing field between income trusts and corporations.
Mr. Goodale is merely taking the easy way out and in fact, seems to have backed away from his decision to impose a small tax of 5% on income trusts held inside pension funds and tax-deferred accounts. Given the history of flip-flops on this issue, my bet is that his latest “promise” is of the Dalton McGuinty (the current premier of Ontario who is well-known for breaking his word) variety. If the Liberals win a majority, Mr. Goodale is likely to revisit the issue once again.
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