When Ontario announced that it is harmonizing its sales taxes, the mutual fund industry went on a publicity drive shedding crocodile tears over how the HST is going to cost investors. I thought the chutzpah of an industry known for its sky-high fees complaining about investment expenses to be breathtaking (See post: Harmonization and mutual funds). Since then British Columbia has announced plans to harmonize its sales taxes as well and mutual funds are once again going in to bat for the plight of the retail investor. But the Ontario Government is not willing to tolerate criticism from the industry anymore. The Globe and Mail reported (See: Ontario fires back at mutual fund industry) that Government “has threatened Canada’s mutual fund industry with a PR offensive against management fees charged to investors, unless fund executives mute their objections to proposed sales tax changes.”
It is sad to see our elected representatives stoop to the level of blackmail — not out of any principle that a lot of products sold by the financial services industry impose a terrible cost on the savings of Canadians but simply to avoid the inconvenience of tough questions when Queens Park extracts its pound of flesh. Personally, I would like to see that PR offensive. An increased awareness that costs matter in investing can only help.
