Friday, November 10, 2006

Income Trust Bust

While the Liberals Income Trust leak a year ago benefited their pals on Bay Street the Tories Income Trust Halloween surprize rewarded their pal Gwyn Morgan. It is more than likely that it was Encana's plans to become an Income Trust, moreso than either Telus or BCE , that forced the Tories hand. The haste by which the Tories made the decision to smack down the Income Trusts was due to their insider knowledge courtesy of Mr. Morgan. They knew Encana's plans. They sacrificed consultation and breaking an election promise to act to benefit their insider, Gwyn Morgan. Now will the RCMP investigate this Income Trust leak as they did with the Liberals leak?

Did Gwyn Morgan win the ultimate boardroom fight?

It's certainly a theory that got some traction yesterday, as EnCana Corp. made the stunning admission that it wanted to convert about 40% of itself -- worth $20-billion -- into an income trust.

What lent credence to it is that Mr. Morgan, the founding chief executive of EnCana -- and the company's heart, mind and soul until he resigned abruptly exactly a year ago -- publicly criticized the trust model as bad for Canada even as his proud creation was on the verge of doing the deed.

Plus, there were these head-scratchers: His resignation as CEO happened two months after EnCana put in motion the trust plan, hiring legal, tax and financial advisors and seeking a tax ruling from the Canada Revenue Agency.

And despite his 30-year history with EnCana and its predecessor, Alberta Energy Co., two weeks ago Mr. Morgan stepped down from the company's board, just days before the federal government announced it would put an end to trusts in Canada.


Income Trusts

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Anonymous said...

Who cares what the reasoning is, at least they are doing something to insure that the corporate bums at least pay some taxes. It became obvious that the Liberals were more interested in making sure their corporate friends got rich off the taxpayers of Canada and paid little or no taxes, that pleasure they left for ordinary working people in this country.

eugene plawiuk said...

Except that the Tories are not doing anything different than the Liberals. In order to tax the Income Trusts they have sweetened the deal by reducing corporate taxes. And the Income Trust tax does not come into effect for four years.

If they were really concerned about working people they would eliminate personal income taxes for those earning $100,000 and less annually.

Hailey said...

Who cares?

The people that made financial planning decisions based on believing Harper's word.

The people who voted for Mr. Harper believing he would hold to his campaign promises.

The pain that lost 30% of their portfolio as they had allowed election promises to guide their decisions.

Mr. Harper referred to it as "raiding seniors hard earned assets" several times when he spoke of the LPC's decision (it's on youtube if you want to see it) but then went and raided them himself.

I have no idea if Mr. Plawiuk's theory is right or wrong I just know that Mr. Harper is a fundamentally untruthful person who is unworthy of basic trust and who gouged seniors the first chance he got.

Geoffrey Laxton said...

I would just like to say that any policy that Gwyn Morgan is behind is not a policy friendly to average Canadians. Income trusts pay distributions to average Canadians, whereas Gwyn Morgan doesn't want you to have this money. He figures that only corporations and Big Shots like him deserve money from companies. This is the issue.

Geoffrey Laxton said...

Here is what the NDP has to say about Gwyn Morgan, do they really want to vote yea for his income trust taxation policy fed to Harper and Flaherty? I think that the NDP should analyze this more carefully before dismissing income trusts if Gwyn Morgan hates them!