Purdy Crawford Rescues the Market

The capitalist state rides to the rescue with a corporate governance model for the credit market in Canada. Don't here no crying about market interference by the state. Nope. Can't over all the applause from the vested interests.

Another nail in the coffin of the myth of the free market. It's a market and it ain't free, it's controlled by them in power. Despite all their monetarist ideology when the crisis hits they run to their nanny state.

It began in August when Quebec based National Bank, not the Central Bank, bought back its loans and shored up its Mutual Fund Altamira. Because investors, consumers, you and me, are ignorant of the market risk of some their investments.

National Bank's news release on behalf of Altamira funds may have been most educational from the investor's perspective. The bank noted that Altamira money market funds offer no assurances they can maintain their net asset value and protect against losses. It also pointed out that money market funds are not insured by Canada Deposit Insurance Corp., as are high-interest savings accounts and guaranteed investment certificates.

In shoring up the money market franchise for the mutual fund industry, National Bank has also highlighted the fact that these funds are not risk-free. This brings us back to high-interest accounts, a corner of the financial marketplace where there happens to be some stiff competition these days. The rates are higher than money market funds, fees are non-existent and federal or provincial deposit insurance offers a safety net. What a deal.

It was followed this week by the Bank of Canada joining with the private/public investment and banking sector to develop a bail out plan for institutions.

And when they say they are protecting investors ferget about it. They are protecting their investment. They are speaking of commercial investors like our pention funds and private equity as well as mutual funds.

After all the Ruling Class takes care of its own, and their investments.

A plan to rescue about $35-billion of illiquid asset-backed commercial paper moved a step forward yesterday as holders of the debt formed a committee to oversee how the proposed restructuring would happen.

And, in another sign that Canadian money markets may be inching towards stability, the Bank of Canada yesterday announced it was restoring standard collateral conditions for providing liquidity to financial institutions on an overnight basis. "While money markets continue to experience difficulties, there has been significant progress in the functioning of the overnight market," the bank said in a statement.

During the height of the recent stock-market turmoil in mid-August, the bank widened the kinds of collateral it would accept against lending to include such instruments as provincial securities and commercial paper, as well as the standard government of Canada paper.

Meanwhile, the committee overseeing the commercial paper rescue plan will be chaired by Osler, Hoskin & Harcourt lawyer Purdy Crawford and will include representatives of Canaccord Capital Corp., Canada Post, National Bank Financial and the Caisse de depot et placement du Quebec.

"Our investor committee will be looking to implement a solution that addresses the best interests of investors generally, and at the same time allows for a successful restructuring and a return to market stability for these investments," Mr. Crawford said in a statement.

Under the so-called "Montreal Proposal" troubled asset-backed commercial paper (ABCP) would be converted into longer-term debt with maturities stretching out in some cases several years into the future as a way to improve chances that investors will get their money back. Details of how the conversion will happen will likely be sorted out by this new committee.

Canadian investors stuck with illiquid asset-backed commercial paper should hang on to their investments while an investor committee attempts to find a solution that will get their money back, said the head of a committee overseeing a rescue plan.

``Hopefully if everybody stays cool and somebody doesn't start pulling plugs, this thing will work out without them having any losses,'' Purdy Crawford, who was named yesterday to lead the committee, said in a telephone interview today. ``If everybody stays cool, that's the key.''

A Pan Canadian Committee Chaired by Mr. Purdy Crawford has been formed today to oversee the proposed structuring process of the Third Party ABCP. This Committee, which includes investors who were signatories to the Montreal Proposal plus other significant holders, brings a broad cross section of investors with a national perspective, relevant experience and associations with each of private business, institutional investors, government agencies and crown corporations. Comprising this Investor Committee are now:

<< - Mr. John Crichton, President and Chief Executive Officer, NAV CANADA. - Mr. Alban D'Amours, President and Chief Executive Officer, Desjardins Group; - Mr. Gordon J. Fyfe, President and Chief Executive Officer, PSP Investments; - Mr. Doug Greaves, Vice President Pension Fund and Chief Investment Officer, Canada Post; - Mr. Rowland Kelly, Interim CEO, Credit Union Central of British Columbia, representing Credit Union Central of Canada; - Ms. Karen Kinsley, President and Chief Executive Officer, Canada Mortgage and Housing Corporation; - Mr. Mark Maybank, President & Chief Operating Officer, Canaccord Capital Corporation (Canadian Operating Subsidiary); - Mr. Dave Mowat, President and Chief Executive Officer, ATB Financial; - Mr. Ricardo Pascoe, Co-President and Co-Chief Executive Officer, National Bank Financial Group; - Mr. David G. Patterson, Chair and Chief Executive Officer, Northwater Capital Management; - Mr. Henri-Paul Rousseau, President and Chief Executive Officer, Caisse de dépôt et placement du Québec; - Mr. Jim Scopick, President and Chief Executive Officer, Credit Union

And Purdy Crawford is a player. After all he founded the Atlantic Institute for Market Studies (AIMS), which is the East coast clone of the right wing think tank the Fraser Institute.

Purdy is an excellent example of the modern member of the capitalist ruling class. They secure their positions of power through interlocking boards of directorships. He adapted his corporations during the mean and lean eighties and then in the booming nineties to create large cap companies capable of predatory take overs or become subject of take overs themselves. He adapted corporations into a new tax shelter; Income Trusts.

He recognized the current condition of capitalism; mergers and acquisitions in the age of modern financial globalization. This resulted in large scale accumulation in a single company, selling off parts of itself to global flows of capital.

It resulted in the selling off of Canadian companies to foreign investors in order to mass enough capital to take over someone else, or be gobbled up in the process if your gamble fails as was the case with Inco ,which Purdy was a director of .

And as he did with Imperial Tobacco severing it from Imasco. Which was finally bought out by its parent, the notorious cigarette smuggling BAT.

As a spokesperson for big tobacco he defended targeted marketing at youth. This qualifies him to speak on; Ethics, Values and Business Success - Purdy Crawford (May 11, 2006)

As a securities adviser he promotes his ideal of market consolidation with a single Securities commission in Canada. In a way this melt down in the market has proven his point and in rescuing the paper market will lessen the objections to it by provincial mandarins.

Does it all really matter as far as small investors are concerned? My hunch is, not very much. Of course we would all welcome a lean, mean federal commission spearheaded by a home-grown Eliot Spitzer to keep Bay Street in line. However, that is far from what Mr. Crawford and some of the other reformers have in mind. Their blueprint calls for another bureaucratic restructuring rather than a caped crusader.

Take a look at the Crawford Panel’s proposals. We are to have a new agency composed of 13 provincial and federal representatives, each having a single, equal vote, which would approve all the rules and select the regulators. In other words, the existing 13 commissions would be gathered under one roof and given equal power. The mind boggles. Can you imagine Ontario, Quebec, and Alberta all being consistently on the short end of 7 to 6 votes?

Our Global Capital Markets Plan has four key building blocks.

• First of all, enhancing regulatory efficiency by creating a common securities regulator that is principles-based, proportionate and tailored to the unique makeup of Canada’s capital markets.

• Secondly, strengthening market integrity by enhancing investor protection, pursuing the highest standards of governance and enforcing our laws more vigorously.

• Thirdly, by creating greater opportunity for business and investors by pursuing free trade in securities with the United States and other Group of Seven (G7) countries. And I’ll come back to that in a moment about where that is at in terms of our discussions internationally.

• And fourth, improving investor information by promoting financial literacy, particularly for young Canadians, by developing new financial education materials.

So these four building blocks make up the foundation of our Capital Markets Plan. None are mutually exclusive. They all support one another, and I would like to take the next few minutes to focus on one building block in particular, and that is strengthening market integrity, which begins with enforcement.

With Purdy's connections to Montreal the city and the exchange, as well as having a home there and being on the Board of McGill. Gee where do you think they would put a national Securities commission.

Canadian Securities Commission,
Calgary, Alta (or Montréal, PQ?)

PORTRAIT OF A CAPITALIST

Purdy Crawford COUNSEL Toronto Office Email: pcrawford@osler.com Tel: (416) 862-5869 Year of Call Fax: (416) 862-666 Ontario 1958 Nova Scotia 1

Purdy is a native of Five Islands, Nova Scotia, and a graduate of Mount Allison University, Dalhousie Law School and Harvard Law School. He pursued his legal career with Osler, Hoskin & Harcourt LLP, practising primarily in the corporate/commercial area. He left Osler to join Imasco as C.E.O. in 1985 - retiring as C.E.O. in 1995 but continuing as non-executive Chairman of Imasco Limited, CT Financial Services Inc. and Canada Trustco Mortgage Company until February 1, 2000.

Purdy rejoined Osler as Counsel in March 2000. He sits on the boards of several large Canadian and U.S. public companies. Purdy is Chair of the Five-Year Review Committee, appointed to review securities legislation in Ontario, and former Chair of the Securities Industry Committee on Analyst Standards. In 1996 he became an Officer of the Order of Canada. He was inducted into the Business Hall of Fame of Nova Scotia in 1997 and became a Fellow of the Institute of Corporate Directors in 1999. In 2000 he was inducted into the Canadian Business Hall of Fame and named Ivey Business Leader of the Year. He is Chancellor Emeritus of Mount Allison University.

He was the Chairman of the Atlantic Institute for Market Studies (AIMS), Chancellor of Mount Allison University, and Chairman of AT&T Canada Corporation. He was a corporate director for SEAMARK Asset Management Ltd. and is currently a member of the board of the Canadian National Railway Company. He is a Governor of the University of Waterloo.

Timeline: Purdy Crawford

Toronto
Born Nov. 7, 1931, in Five Islands, Nova Scotia
Allstream chair, corporate governance advocate

1958: Starts practising at law firm Osler, Hoskin & Harcourt; specializes in corporate-commercial area. Becomes senior partner in 1970.

1985: Joins tobacco giant Imasco Ltd. as president and COO. Is named CEO in 1986. Transforms it into a diversified holding company.

1995: Retires as Imasco CEO, but continues as non-executive chair until February 2000, when Imasco is bought by British American Tobacco.

G7 Summit, Halifax, Purdy Crawford, co-chairman of the summit sponsorship committee.

1999: Joins AT&T Canada as a director. Becomes chairman a year later. Oversees its transformation into debt-free Allstream.

2000: Rejoins Oslers as counsel. Chairs Ontario minister of finance's five year review committee, which examines securities regulations.

He is chairman of the Ontario Government's Crawford Panel on a Single Canadian Securities Regulator.

Director MTS/Allstream

Purdy Crawford Named Conference Board's 2003 Honorary Associate

The CPP Investment Board has hired Toronto lawyer Purdy Crawford as an external adviser on conflicts of interest and ethical conduct, providing a new contact for whistleblowers.

John MacNaughton, chief executive officer of the CPP Investment Board, said yesterday no other federal Crown Corporation has created a similar position with an outside, independent person in the job.

The CPP Investment Board was formed in 1997 to manage the assets of the Canada Pension Plan.

It is currently responsible for overseeing $31-billion in equity, real estate and infrastructure assets, and will also assume control of a further $35-billion in bonds and cash investments over the next few years.

Clearwater Seafoods Income Fund, the Board of Directors of CS ManPar Inc. (the managing partner of Clearwater Seafoods Limited Partnership),

CRAWFORD, Purdy, O.C., Q.C., B.A., LL.B., LL.M.; b. Five Islands, N.S. 1931; e. Mt. Allison Univ. B.A. 1952; Dalhousie Univ. LL.B. 1955; Harvard Law Sch. LL.M. 1956;

Member of the Board of AT&T Canada
Member of the Board of Avenor
Member of the Board of Camco Inc.
Member of the Board of Canada Trustco Mortgage Company
Member of the Board of Canadian National Railway
Member of the Board of CT Financial Services Inc.
Member of the Board of Dominion Textile Inc.
Member of the Board of Foot Locker
Member of the Board of Imasco Limited (as Chairman, 1985-2000)
Member of the Board of Inco Limited
Member of the Board of Maple Leaf Foods (1973-)
Member of the Board of Nova Scotia Power
Member of the Board of Petro-Canada
Member of the Board of Trinova Corporation
Member of the Board of Woolworth (-1997)

Governor Emeritus, McGill Univ.; Chancellor, Mount Allison Univ.; called to Bar of N.S. 1956, of Ont. 1958; student with Osler Hoskin & Harcourt 1956, Assoc. Lawyer 1958, Partner 1962, Sr. Partner 1970-85; cr. Q.C. 1968; Special Lectr. Osgoode Hall Law Sch. 1964-68, Univ. of Toronto Law Sch. 1969-71, Bar Admission Course 1969-72;

Co.-Secy. Atty. Gen.'s Comte. on Securities Leg. 1964-65; Chrmn. Ont. Taxation Sub-sec., Cdn. Bar Assn. 1966-68; Treas. Nat. Taxation Sec. 1968-70; Past mem. various comtes. on taxation and of Bd. Govs. Cdn. Tax Foundation 1970-72; Cdn. Inst. of Ch. Accts. Special Comm. to Examine Role of Auditor 1977-78; Accounting Rsch. Adv. Bd. 1977-79;

Chrmn. & C.E.O., Imasco Ltd. 1985-95;

Officer, Order of Canada 1996;

United Church;

recreations: bicycling, golf, skiing;

Canada's National Ballet School, Honorary Circle Members

Shannon School of Business

The National Centre for Business Law UBC

Canada's Outstanding CEO of the Year™ Advisory Board

Canadian Institute of Chartered Accountants Advisory Board

Board Member; Dalhousie University, McGill, University of Western Ontario, UPEI.

Clubs: Mount Bruno Golf; Parrsboro Golf (N.S.); Mount Royal; Forest & Stream; Granite; Toronto; Devil's Pulpit Golf & Country; York Downs Golf & Country; Caledon Ski; The Club Pelican Bay (Florida);

Homes: Five Islands, N.S. (summer) Belfountain, Ont., Toronto, Ont. and Westmount, Que.;

Office: Toronto, Ont.

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I want to thank Purdy Crawford for his introduction. Purdy is truly a great Canadian. I speak for a whole generation of leaders in many different spheres across Canada – who would say that Purdy Crawford made a difference in their lives. If you had to choose one role model, Purdy Crawford would be, for many of us, our first choice.

Ed Clark, President & CEO, TD Bank Financial Group
Remarks at the 2007 Mount Allison University Convocation.

Of course for workers, Purdy is less of a role model, as he sits on the board of CN. No doubt in part it was thanks to his government connections that helped push the Federal Government to legislate away CN workers right to strike this spring.
So explain to the CN workers about how E. Hunter Harrison's compensation made off their backs, is judged 'equitable'.

65 Means Freedom to Start a Whole New Career - March 15, 2006

Then there's Purdy Crawford. At 74, he serves on several corporate boards and is currently heading the initiative aimed at creating a single national securities regulator.

"I guess I'll slowly retire as I feel less energetic, but retirement is not the way I think about it," says Mr. Crawford, the former chief executive officer of Imasco Ltd.

Canadian workers should prepare to work beyond 65 while Purdy and pals use their pension funds for capital investment and promote extending the age of retirement.

Indeed, on a superficial level the notion of "holding corporations accountable" must seem rather appealing to a relatively broad cross-section of society, including many social and community advocates who have jumped on the corporate governance bandwagon. The language of "social responsibility" is often invoked in discussions of governance reform. Those calling for tighter control over corporate managers are often called "activists." But to whom are they asking that corporate managers be held accountable? And on what criteria? These are important questions not always addressed by those, including those on the left, beating the drum for new governance standards.

While discussing the high falutin ideals of directors control over the corporation, and its impact on CEO compensation he leaves out the need for more civil society representation on the board, from union elected directors to environmentalists, consumer adovcates, non-lawyers, etc.

Early on, the boards I was on were public boards of companies I was the lawyer for. That's a no-no today, and properly so. Boards then, depending on the circumstances, were quite the creation of the CEO. You still get quite a bit of that in the US, but here that shouldn't happen very much anymore. At least it doesn't happen where I'm involved.

Over the last eight or nine years, boards have taken much more control of companies, and CEOs are much more beholden to boards.

When I joined Imasco, I thought I'd been around so I didn't have a lot to learn. That was true of a lot of areas, but it wasn't true of operations. It was an exciting learning curve to understand how Shoppers Drug Mart operates and start adding value.

The same was true with Imperial Tobacco. I became a great believer in great operators. Business schools pay a lot of attention to strategy, but they don't pay enough attention to execution.

I went in at Imasco to become the CEO. I wouldn't have gone to become a lawyer. I might have done that today, by the way--the legal general counsel office reporting to the CEO has become much more significant. The remuneration is comparable to a fairly outstanding lawyer in a law firm. There are no pension plans with a law firm.

"The importance of good governance for confidence in Canadian capital markets" by Purdy Crawford

In the wave of corporate scandals that followed the burst of the bubble on the stock market, confidence in the business community has been badly shaken across North America. And in the subsequent wave of recriminations, business has been confronted with unprecedented scrutiny from government and regulators. Business leaders have been forced to ask about the nature, purpose and value of their enterprises beyond their bottom lines. Purdy Crawford, former chairman of Imasco and Canada Trust, was an advocate of corporate governance long before it became a flavour of the month. He looks beyond the recommendations of the Bennett- Broadbent Report and the Saucier Report in Canada, as well as the Higgs Report in the UK, and offers some simple rules for corporate governance, particularly for enhancing the independence of corporate chairs and directors.

BOARDS OF DIRECTORS - MONITORING FOR
ETHICAL STANDARDS
Purdy Crawford
Counsel to Osler, Hoskin & Harcourt LLP
Thursday October 21st, 2004
Purdy Crawford addressed the
October luncheon on the topic of
fiduciary governance. Mr. Crawford
used the Globe & Mail published
rankings of Boards of Directors
of companies that comprised
Canada’s benchmark S&P/TSX
composite index as the springboard
for his analysis on certain problems
in governance rating systems. He identified the inherent
weaknesses of this “tick the box” type approach to measuring
corporate governance and expressed his personal belief
that good long-term financial performance, or an outstanding
C.E.O., should rank higher than any ranking of the
Board of Directors. Mr. Crawford went on to talk of the
distinction between what he named fiduciary governance
(governance designed to police the integrity of the firm)
and value creating governance, and was of the view that
Canadian corporations have performed far better than those
in the US in terms of the former. Despite the current trend to
regulating fiduciary governance, Mr. Crawford expressed a
firm belief in the importance of sound leadership and
discussed the ethics and integrity program at Allstream
Corporation as an example of a solid and effective
approach. Mr. Crawford concluded his remarks by
emphasising that a culture of ethics and integrity is critical
to market credibility and maintaining confidence in the
leadership of the organization.

Then, in 2002, in the aftershock of Enron, and following investor demands to tighten up shoddy financial reporting practices, US Congress introduced the Sarbanes-Oxley Act and Canadian regulators later responded with their own set of rules. As John Carchrae, CA, chief accountant at the Ontario Securities Commission, explains, this brought greater prominence to the COSO and COCO frameworks which, although already in place, were not yet in widespread use. (For more details, see “Internal control in evolution” below.)

Purdy Crawford, who was president and CEO of Imasco Ltd. from 1986 to 1995 and a board member of several large public and private companies, is one of those who witnessed the changes in the internal auditor’s role first-hand. More than 10 years ago, he says, “the internal audit function in big companies tended to be sleepy. They were laid back, they were not a strong group.”

Eight or nine years ago things started to change, says Crawford, who is presently counsel at Osler, Hoskin & Harcourt LLP and is a member of the Canadian Business Hall of Fame. (He also sits on Manitoba Telecom Services Inc.’s board.) CEOs at the helm of corporate giants like General Electric began recruiting “swat teams” of talented internal auditors to be the eyes and ears of the company, uncovering weaknesses and helping management devise solutions to improve processes. “Today, SOX and proposed Canadian-equivalent requirements have certainly underlined the importance of the internal audit function,” he says. “One big role of internal auditing is to ... help external consultants or financial people to set up control mechanisms if they don’t exist or if they need to be strengthened.”

Not only are highly regarded lawyers such as Purdy Crawford, Q.C., and Jean Fraser, of Osler, Hoskin & Harcourt LLP, Garth Girvan at McCarthy Tétrault, and Les Viner at Torys reading about leadership these days, they are thinking about it, talking about it and taking action. Purdy Crawford, who has rejoined Oslers after most recently serving as Chairman of Canada Trust Financial Services and non-executive Chairman of Imasco, says even before he stopped practising law in 1985 to go to Imasco, he found the Harvard Business Review more interesting than the Harvard Law Review. Les Viner debates theories from the latest management literature. And James Riley at Ogilvy Renault extracts lessons in organizational growth, competition, and strategy from John Keegan’s The Face of Battle and other such military classics. They articulate such psycho-management terms as 360° feedback, EQ, and the importance of “vision”. What has the world come to?! These are supposed to be hardened, no-nonsense corporate lawyers.

“There is a revolution brewing,” exclaimed Tom Peters in 1989. That revolution, the Information/Technology Age, has since arrived and has far exceeded Peters’ predictions in terms of how massively and pervasively it would impact on the rules of economic wealth and growth, what competitive advantage is, and how people live and work. There is another revolution brewing today: in professional services. As global legal services converge and consolidate, as multidisciplinary practices enter the market, as corporate mergers escalate causing even more consolidation in the business client base, and more and more work is transacted cross-border, Canadian law firms find themselves in a difficult position. By all accounts, business is booming.

Of course not everyone is so enamored with Mr. Purdy's defense of corporate Canada when it comes to white collar crime.

---

ASC Chairman Bill Rice and Other Securities Regulators & Experts
Ignore Today's Canadian Press-Decima Poll

Add Alberta Securities Commission Chairman Bill Rice to the list of Canada's securities regulators and legal experts trying to convince us there are few high profile white collar crimes in Canada and that Canadians are less aggressive in the pursuit of law and order than Americans. Bill Rice, David Brown (former OSC Chairman and Current Chairman of the RCMP Restructuring Task Force) , David Wilson (current OSC Chairman) and Purdy Crawford (Bay Street securities lawyer and recognized architect of Canada's current securities enforcement system) are out of sync with the knowledge and standards set by Canadian society, as they are expressed in today's Toronto Star - Canadian Press report on the Canadian Press - Decima poll of Canadian attitudes towards the U.S. Conrad Black verdict and his expected jail sentencing.
"The survey of more than 1,000 Canadians found that only 8 per cent think the American jury was too severe in convicting Black on four of 11 charges earlier this month. Forty-eight per cent say the jury got it about right and 22 per cent said the verdict was not severe enough.
"Decima found that most respondents  69 per cent  would like Black to see jail time in addition to paying a fine. Just 10 per cent believed a fine is ample punishment. Some 29 per cent felt he should be sentenced to 10 years or more in prison, with another 40 per cent feeling that one to nine years would suffice."

Meanwhile, this is what Bill Rice, David Brown, David Wilson and Purdy Crawford have had to say about white collar crime in Canada:
"There's always room to improve, admits Alberta Securities Commission chairman Bill Rice. That includes changing the perception that Canada doesn't aggressively pursue rogue executives. Rice, a former securities lawyer, feels Canada too often is an easy target. Without a trial to match the visibility of Enron or WorldCom, regulators here come up short by comparison. The reality, he says, is that aggressive, U.S-style punitive action isn't the Canadian way when it comes to stock market scandals. "There is an extreme cultural difference in our approach to criminal law enforcement. We certainly don't send people away for 25 years for these kinds of things. "I happen to think our public would be horrified by it."
(Calgary Herald, "Business Scandals dog Canadian markets," dated May 28, 2007)


"David Brown, past chair of the OSC, said, "Canada's come a long way ... I think all of the pieces are in place now. We all need to give it a little more time." And he added that the lack of high-profile convictions in Canada could have something to do with a lack of high-profile crimes. "We don't seem to have seen here in Canada the high-profile failures that they have in the U.S.," he said." (Toronto Star, "Soft on White Collar Crime," May 29, 2006)



"But a small minority of firms and individuals prey on investors. Unfortunately, this small group has a disproportionate impact on the perception of Canadas capital markets. I understand the challenge of trying to close a gap between perception and reality." (OSC Chairman David Wilson Speech, "A Common Objective: Strong Investor Protection," April 26, 2007)


"Purdy Crawford, a lawyer who headed a commission that urged the creation of a single national securities regulator, said he was disappointed Canada didn't take the initiative to prosecute Black before he went to trial in the United States. "The best thing that ever could have happened to him would have been to have been prosecuted here," said Crawford, although he added the U.S. authorities' "no holds barred" approaches are also overzealous to a fault."
(Canadian Business Online,"Securities Enforcement Still Lacks Teeth Experts Say," July 17, 2007)
Canadians are well aware that economic crime is a serious problem in Canada, so the efforts of Bill Rice, David Brown, David Wilson and Purdy Crawford to coverup this fact are falling on deaf ears. The longstanding efforts of these men to coverup white collar crime and to mitigate Canada's prosecutorial response to it can only be interpreted to be a breach of trust to the Canadian people.

In a recent survey (EKOS Survey, Wave 3, 2005-2006), Canadians said economic crime was the most serious problem in Canada at 67%, gang violence rated second at 66%, and gun crime and organized crime both rated third at 54%. Terrorism rated last at 14%. When asked about what type of crimes Canadians were personally more concerned about, those polled rated economic crime first at 68%, gang violence second at 59%, gun crime third at 51%, property crime forth at 48%. Terrorism rated last at 30%.

(RCMP Integrated Market Enforcement Teams Accountability Framework - Fiscal Year Ending March 31, 2006)

On April 26, 2007, the National Pensioners & Senior Citizens Federation (450 clubs and chapters with 1,000,000 members), the United Senior Citizens of Ontario (1000 clubs with 300,000 members) and the Small Investors Protection Association jointly requested a national inquiry on the malfunctioning of Canada's securities and accounting regulation and white collar crime enforcement system.



Diane Urquhart

Independent Analyst

See:

Sub Prime Exploitation

Canadian Banks and The Great Depression

Wall Street Deja Vu

Housing Crash the New S&L Crisis

US Housing Market Crash

The Carbon Market Myth

Are Income Trusts A Ponzi Scheme

Scandal in the Alberta Stock Exchange

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asset-backed commercial paper , unions, labour, strike, Hunter Harrison,labor, workers, Canada
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Dodge Defends Defined Benefit Pension Plans

And why would Bank of Canada Governor David Dodge say such nice things about Defined Benefit Pension Plans? After years of the right wing attacking these plans in favour of defined contribution plans; RRSP's. Because they are the real source of capital investment for P3's

Because they generate more capital, faster, and thus can be used for investment purposes. In other words because OMERS, Ontario Teachers Pension Fund, CPP, the new Alberta AIM fund, all of them are now major contributors to the economy as investment funds, which are creating a new form of P3; public pension partnerships.

Once these public sector pension funds were freed from state restrictions in investing they have created a trillion dollar investment market. Further this has allowed the state to benefit by not paying its share. Thus giving the government of Canada more surpluses, along with their looting of EI.

While the private sector imitated the Government in failing to invest their required amount in their defined pension funds, leading them to funding crisis much as the Alberta Government faced a decade ago with its public sector pension funds. Which it attempted to privatize (put it under self governance) but once they discovered that allowing them to invest in the market made them profitable and they paid off their debt they gave that idea up. Today a decade later they finally discover what OMERS and the Ontario Teachers Fund have been so successful doing, becoming private venture capital funds, and created the new AIM Fund.

In the private sector we have seen the same Peter Pocklington style use of workers pension funds to bail out the corporation. Pocklington purchased Gainers in Edmonton to access not only the business capital but the unionized workers pension funds to bail out his other businesses, like the Oilers, in a barely legal ponzi scheme that saw him bankrupt both and leave the city in disgrace.

When pension fund bail outs have been successful in the private sector it has been because the company was Canadian, unionized, and formerly a crown corporation like Air Canada.

Where they have failed has been in the U.S. such as in the case of Delphi, where the unionized workers pension funds are looted when the company uses their failure to invest in them as an excuse to declare bankruptcy and hand over their pension responsibilities to the U.S. government in a perverse appeal to state capitalism to bail them out.

This is the reason that both the Canadian and American governments want workers to work longer, so as to have more liquidity in the CPP in Canada and Social Security in the U.S. Conservatives Want You To Work Longer

I am reproducing these articles because they are the most informative and because they will eventually disappear behind locked subscription walls.

And while Dodge says nice things about Defined Benefit Plans he also wants to deregulate them, including allowing employers to retain their surpluses, which shortchanges worker, something a former Liberal PM benefited from.

Making private pensions stronger

Dodge says defined-benefit plans way to go, with changes to improve them

By JULIAN BELTRAME The Canadian Press

OTTAWA— Bank of Canada governor David Dodge is calling for changes to Canada’s private pension plan system, and a swing back to defined-benefit plans, to ensure it produces the best results for employees and the economy.

Private plans have been under pressure in Canada for several years, with many company pensions running huge shortfalls because of future liabilities.

A survey of chief financial officers, released Thursday by the Conference Board of Canada, found that two-thirds believe there is still a pension crisis in Canada. But the number who feel the crisis will be long-lasting has declined to 48 per cent from 61 per cent last year, the survey of 141 corporate executives found.

In a speech Thursday at a Toronto pension summit, Dodge proposed six changes he said would give employers more incentives to offer workers the most desirable form of pension — those that pay predictable, defined benefits on retirement.

Private pensions are important both to the employee who receives them and the employer hoping to attract and retain the best available staff, he said. They are also important for the economy as a whole, he added.

"As a central banker, I know that a sound pension system is important from the perspective of economic and financial market efficiency," Dodge said.

But while he mostly praised Canada’s legal and regulatory framework governing private pensions, Dodge said there are several shortcomings that should be addressed to strengthen the system.

Those shortcomings are increasing the risks to employees and preventing the plans from functioning at maximum capacity, he said.

As a result, Dodge said employers "have been scaling back or restricting new entries into these types of plans, largely because they do not have the right incentives to maintain and operate defined-benefit plans."

Many have been converting to defined-contribution plans instead as they are usually easier to budget for.

One drawback to the current system is that when pension plans run a surplus, federal and provincial laws increasingly have given employees the right to those surpluses even though it is the employer that bears the risk of default.

He added that tax regulations perversely discourage pension managers from building a surplus above 10 per cent, even though such surpluses are desirable and useful in offsetting periods of deficits.

Dodge said many employees miss out on the opportunity to be protected by private pension plans because they work for companies that are too small to afford them.

"But risks can be mitigated by sponsors forming multi-employer plans, thus pooling risks across a number of plan sponsors," he argued.

"If structures such as large multi-employer pension plans could be created, this would help them to pool both costs and risks, making it easier for smaller employers to sponsor defined-benefit plans."

He noted that municipalities in Ontario have done exactly that in forming OMERS, the Ontario Municipal Employees Retirement System, so there should be away to explore that avenue for private-sector employers.

Among other concerns noted by the central banker were increasing flexibility to deal with actuarial deficits and making sure accounting rules don’t introduce unnecessary volatility to employers’ balance sheets.

"Ultimately, Canada can have a better-managed system that is good for members, good for employers, good for the economy and good for Canadian society," he said.

Bank of Canada calls for private pension plan reforms

Governor Dodge wants clarity. Suggests giving plan sponsors more flexibility to cover pension fund shortfalls

ERIC BEAUCHESNE,

CanWest News Service

Published: Friday, May 11, 2007

Bank of Canada governor David Dodge is calling for widespread reforms to deal with the country's private pension fund crisis, including the elimination of tax penalties and other rules that discourage employers from building up pension fund surpluses, as well as a greater awareness among employees of the risks and costs of enriching their retirement benefits.

"First, we should reduce the disincentives for sponsors to run actuarial surpluses in good times that will offset actuarial deficits in other periods," Dodge told a pension conference in Toronto yesterday. "More clarity regarding legal ownership of surpluses is needed, so that the sponsor that owns the risks also owns the benefits from taking those risks."

Dodge focused on measures that would make defined benefit plans - seen as superior to defined contribution plans but which employers have been abandoning as too risky - more viable.

Generally, in defined benefit plans, employers guarantee employees a pre-set level of benefits, while in defined contribution plans the employees bear the risk as the level of their benefits is based on the investment returns the plan earns.

"An effective defined benefit pension system is a tremendous asset for individuals, for employers and for our society as a whole," Dodge said. "Putting these plans on a sustainable footing involves strengthening the legal, regulatory, accounting, actuarial and economic frameworks."

Dodge suggested that defined benefit fund surpluses should belong to employers because they face the risk of having to cover any shortfall, and that existing tax penalties on fund surpluses should be eased.

"Given the significance of our pension system, policymakers in Canada need to keep working on improving its operation," Dodge told the pension conference.

His comments follow reports that the worst of the recent pension crisis has eased, thanks to healthy returns in the stock market and extra payments by employers to cover pension fund shortfalls.

Dodge suggested giving plan sponsors more flexibility to cover pension fund shortfalls, and letting smaller companies pool costs and risks to form multi-employer defined benefit pension plans.

The governor also called for greater sharing between employers and employees of the costs to pension funds from increases in longevity, and that the costs and risks of any enriching of plan benefits be made clear to both corporate shareholders and workers.

"These changes would give sponsors the appropriate degree of flexibility needed to manage risk effectively," Dodge said. "Ultimately, Canada can have a better-managed pension system that is good for members, good for employers, good for the economy and good for Canadian society."

While Dodge noted that the benefits of pension plans to workers are obvious, he said they also are good for employers and society.

© The Gazette (Montreal) 2007

FULL TEXT-Speech by Bank of Canada Governor

TORONTO, May 10 (Reuters) - The following is the prepared text of a speech by Bank of Canada Governor David Dodge to be delivered on Thursday to the Conference Board of Canada's 2007 Pensions Summit.

A Sound Pension System - Handling Risk Appropriately Good afternoon. I'm happy to be here to talk about the importance of Canada's pension system. It goes without saying that a sound system of private pensions is important from the perspective of pensioners who rely on a given plan for their retirement income. For firms, a pension plan can help to attract and retain staff, and so the business community also counts on a sound pension system. And as a central banker, I know that a sound pension system is important from the perspective of economic and financial market efficiency. Given the significance of our pension system, policy-makers in Canada need to keep working on improving its operation. Ultimately, it is crucial for all Canadians that our pension system function as well as possible. But what is it that makes a system of private pensions function well, or not? As I see it, a key to answering this question is understanding how pension plans deal with risk, in all of its many forms. So today, I want to spend some time discussing private pensions and risk, and suggest what needs to be done to make sure that those who have to bear risk also have the right incentives to deal with it in the most appropriate manner. I will focus on who is best placed to bear risk, and on how risk management can be better supported. Risks and Challenges Let me start with a fundamental question: Why do people save for their old age? Essentially, people save during their working years so they can retire at some point and not suffer a precipitous drop in income and living standards. Economists might put it somewhat less elegantly, saying that people save in order to smooth their lifetime consumption. In the absence of any kind of pension system, individuals, businesses, and society as a whole would all face a number of challenges and risks. I want to spend a few minutes talking about the challenges and risks from these three perspectives, beginning with individuals. First, individuals without a pension plan would have their personal savings as their only source of retirement income, aside from income from the publicly funded Canada Pension Plan/Quebec Pension Plan and the Old Age Security/Guaranteed Income Supplement. And so, individuals would naturally be exceedingly cautious with their investments, particularly as they approached retirement age. In short, individuals without pensions would likely be too risk-averse with their savings to generate a sufficient rate of investment return. Second, individuals can recognize that they lack the expertise to handle their investments in the most effective way, and so will try to acquire this expertise. This could come by way of an investment adviser, or by investing their savings in managed, diversified retail investment vehicles such as mutual funds. The challenge posed by this approach is that it can be costly, since individuals outside a pension plan have to purchase investment advice and ongoing funds management retail, not wholesale. Third, individuals without a pension plan face market risk in a couple of ways. Market conditions could be such that at the time of retirement, the value of their assets could be abnormally low. Or interest rates could be abnormally low at the time of retirement. In either case, the person would need to spend a much greater amount to purchase an annuity or other guaranteed stream of income compared with a period when market conditions were more favourable. The fourth point is related to the third. Sellers of annuities have to deal with the risk that those individuals who expect to live much longer than actuarial tables would suggest are the ones who buy annuities. To deal with this adverse selection problem, sellers compensate for the risk by charging significantly more for the annuity. In other words, the cost of an annuity is much greater for an individual than it is for members of a group. Both of these last two points demonstrate that without a pension system, individuals would need significantly higher levels of savings to ensure adequate funding for their retirement. And all of these points I raised demonstrate that pensions generate enormous benefits by making it much simpler for individuals to successfully save for retirement. But while the benefits of pension plans are obvious for individuals, let's not lose sight of the benefits for businesses and for society as a whole. From the perspective of business, pension plans are typically thought of as a recruitment and retention tool. But historically, pensions were also the way that good employers helped workers to save so that they could avoid penury in old age. And with a pension plan, older workers had the ability to retire, and thus did not need to keep working well beyond the point of their greatest productivity. As for society as a whole, pensions provide a couple of important benefits. First, no society wants to see large numbers of its senior citizens relying entirely on government transfers, although there is fairly universal agreement across most countries that it is desirable to have some degree of public income support for people in their old age. Beyond that, however, a well-functioning pension system is an important source of the long-term risk capital that is essential to finance growth. Mitigating Risks: Defined-Contribution Plans Most of the challenges and risks I've mentioned can be mitigated, to a greater or lesser extent, through the pooling effect that a pension plan provides. Of course, different kinds of pension plans deal with risks in different ways. First, let me briefly discuss defined-contribution plans and the way they deal with risks. A defined-contribution plan mitigates, at least partially, many of the challenges and risks I mentioned for individuals. For example, the costs of funds management and investment advice are pooled. Further, pooling helps to mitigate the risk that individuals will not have saved enough to purchase an appropriate annuity.

Most execs see a pension crisis

Fewer fear it will be long lasting

ERIC BEAUCHESNE, CanWest News Service

Published: Thursday, May 10, 2007

Nearly two-thirds of senior executives believe Canada still has a corporate pension funding crisis but a lot fewer fear it will be long-lasting, according to a survey to be released Thursday at a pension conference in Toronto.

The percentage of chief financial officers who feel the pension crisis will be long-lasting has slipped below half to 48 per cent this year from 61 per cent last year, and the proportion of senior human resource executives who see it as long-lasting has fallen to 40 per cent from 67 per cent, the survey found.

The results are being released at a Conference Board of Canada pensions summit in Toronto at which Bank of Canada governor David Dodge will give his perspective of how to manage pension risks.

"Compared to one year ago, the sense of crisis appears to be abating, but chief financial officers are still concerned about both the volatility and the current level of pension expense," said Gilles Rheaume, the board's vice-president public policy. "In an environment of labour shortages, pensions ... are considered a very valuable recruitment and retention tool." The lower level of concern likely reflects better investment returns and shrinking funding deficits, added Ian Markham, a pension specialist with Watson Wyatt, which conducted the survey of 141 employers.

However, he noted that employers are still pursuing reforms in both pension fund investment strategies and the design of pension plans.

Forty-one per cent of employers with a defined benefit plan, seen as the most attractive plan for attracting and retaining employees, indicated that they had made some reforms over the last two years or were planning to do so over the coming year.

Among private sector employers, the most common reform has been to convert to a defined contribution plan, under which the level of pension payments is determined by investment returns, from a defined benefit plan, under which an employer must make up any shortfall in a fund to cover the cost of paying an agreed upon level of benefits.

That's despite the fact that employers strongly agree that a defined benefit plan is more attractive when trying to recruit or keep employees, the report noted.

Firms jettison defined-benefit pension plans

Shift means many will work longer

May 10, 2007 04:30 AM

James Daw

Traditional pensions continue to slip from workers' grasps.

A third of the 45 public companies polled in a new survey will soon have stripped benefit guarantees out of pension entitlements that new and existing employees will earn in future.

In the face of a new era of low investment returns and rising obligations, more pension providers are aiming to limit contributions to a fixed percentage of pay.

Affected employees could face having to work longer – if their health and skills allow – or deal with a lower standard of living in retirement, a senior actuary warns.

The trend that began in the early 1990s is gaining momentum, just as an Ontario commission searches for a survival and expansion plan for pension plans that have defined benefits.

Ian Markham, an adviser to the Ontario Expert Commission on Pensions, says the number of workers who have lost pensions with defined benefits for each year of service may be more than official figures recognize.

Statistics Canada estimates about 83 per cent of the two million pension-plan members in Ontario still have defined benefits.

Most of the members are in the public sector.

But the agency has a great deal of difficulty dealing with private-sector employers that will pay benefits based on service up to a certain year, but in future will make a fixed level of contributions for each dollar earned.

"How do we categorize that?" asks Markham.

Results of the new survey, by the Conference Board of Canada and Watson Wyatt Worldwide, where Markham is a consulting actuary, are to be presented today at a pensions summit in Toronto.

An early release was provided to the Toronto Star.

Key findings are that about 18 per cent of the 45 public companies polled across Canada have swung in the past two years to defined-contribution plans for future service.

Another 15 per cent said they will follow in the next year, while 5 per cent have or will get rid of defined benefits entirely.

Most said they were moving away from guaranteeing a certain benefit based on years of work and salary in order to avoid fluctuations in contribution requirements and to cut costs.

More than 60 per cent of public and private companies said they are making extra payments to eliminate funding shortfalls, which are anotther type of risk for employees if their employer fails.

Few of those employers (16 per cent) pay more into their plans than the minimum legal requirement.

Two-thirds of respondents think pension funding is in crisis, but the percentage who think it will last for many years has fallen to 48 per cent from 61 in 2006.

Many companies see the move away from defined benefits as a financial necessity, but most employers with the cheaper defined-contribution plans worry retirement benefits won't be adequate.

These lesser plans may thus make it difficult to recruit and retain top talent, or to ease out unproductive workers. The national unemployment rate is down to about 6.1 per cent, and a growing number of baby boomers will soon reach the age of retirement.

Public-sector plans are moving to increase both employee and employer contributions, while private-sector companies are increasingly shifting risk to employees.

Markham said that a 30-year-old worker five years ago might earn a pension equal to 54 per cent of pay by age 65 if he or she and an employer each contributed 5 per cent of pay to a defined-contribution pension plan.

But the outlook for returns on all forms of investment is now significantly lower because interest rates on long-term bonds are low all around the world. On the flip side, the cost of life annuities is much higher.

So, the same combined level of contributions (10 per cent of pay) might replace only 38 per cent of pay at age 65 (excluding government benefits).

To get back to a 54 per cent rate of replacement, contributions might have to rise more than 40 per cent, or the person would have to work years longer.

Markham said he doubts many employers, let alone employees, realize the impact of lower interest rates on prospects for retirement. Other research suggests most employees are ill-equipped to invest their retirement savings, and the available investment options are more costly and less well managed than defined pension plans.

The commission on pensions in Ontario, headed by labour-law expert Harry Arthurs, has until next summer to report.

A discussion paper on the Web at pensionreview.on.ca asks for suggestions about a number of questions, including how to make defined-benefit plans less costly, and surplus funds or contingency reserves less a bone of contention.

Director of research Robert Brown said at a pension conference yesterday that 20 research papers have been commissioned. Public hearings are to be held in six cities, starting in Toronto Oct. 15, the deadline for making written submissions.

See

The Importance of Savings

Your Pension Dollars At Work

P3= Public Pension Partnerships

Chinese Social Security Scandal

Social Insecurity The Phony Pension Crisis

Pension Plunder

Labour Is Capital

Pension Free China

Kids Are Commodities

Workers vs Worker

Air Canada Profits From Bankruptcy

Are Income Trusts A Ponzi Scheme

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Alberta, Heritage Trust Fund, LAPP, Alberta Investment Management Corporation,investment, infrastructure, VenCap, shareholders, economics,David, Dodge, Bank, of, Canada, Pensions, P3, public-private-partnerships, OMERS, CPP, Ontario-Teachers-Fund, OTF, Canada, investment, infrastructure, Ontario, shareholders,

Tax Fairness For The Rich

Income Trust investors were given the bums rush last fall when Finance Minister Jim Flaherty announced that the Conservatives were breaking their promise and taxing this lucrative tax loophole. But wait it was just an announcement they still haven't come up with a policy yet. Canada's income trust bill not ready yet

And so the reason for the rush to judgement on Income Trusts? Why they booted Garth Turner out of caucus only the week before. And then they adopted his policy on Income Splitting which they had denied was a priority prior to October 31. It is all political optics.

In an attempt to appease upset investors, the government said it will increase the seniors tax credit and allow income splitting. “Pension income splitting is a major positive change in tax policy for pensioners and seniors,” Flaherty told the committee.

Because so far Flaherty has not come up with any more evidence of Income Trust impacts on the tax system than what his Liberal predecesors had found. Suspicious that. Of course the rush by big Canadian corporations to become income trusts and avoid corporate taxes caught the Tories off guard.

The boys on Bay Street gave them the bums rush so they returned it in kind. Caught off guard they rushed to judgement and gave Bay Street a Halloween trick while promising retirees and seniors a special treat; income splitting.

This is the key element of the Conservatives tax fairness plan; Garth Turners idea of Income Splitting. Which is neither fair nor good policy, but like the GST cut it is good political optics. However like the Income Trust policy it is still only speculative. Income Splitting is not a reality, yet.

Lobbyists suggest the signals are strong that the minority government could muster enough support for pension-splitting plan. But getting it passed may be complicated because it is likely to be treated as part of a package of measures that includes its controversial plan to phase out tax breaks for income trusts.

Those advocating for income splitting are the same right wing lobbyists like REAL Women, who lobbied for the Tories Child Tax Bonus and opposed daycare funding. They want tax credits for living at home moms with kids. That is they want taxpayer to pay for wealthy folks who can afford not to work two jobs. They do not want to pay for other folks daycare being the greedy parasites they are.

A 34-year-old Kemptville, Ont., woman with three kids at home and a husband commuting to a computer job in Ottawa is the chief organizer for the Parliament Hill conference Turner hosts Tuesday.

Sara Landriault, national coordinator of Care of the Child Coalition, says spouses who care for children at home, the vast majority being women, should be paid through the tax system for their work.

She acknowledges a sobering fact a sobering fact Turner himself discovered in a research paper he commissioned from the Library of Parliament. Though he calls the income-splitting scheme a tax reform for the middle class, the library document shows it is actually the upper - maybe upper-upper - classes that would benefit most.

"Sure, they pay more taxes, they're going to get more of it back," says Landriault.

And that doesn't even take into account lone-parent families, the majority of whom are headed by a woman and many of whom live below the poverty line, says Martha Friendly, one of Landriault's staunchest opponents and co-ordinator of the Childcare Resource and Research Unit at the University of Toronto.

"Low-income single mothers, they don't get anything out of this," says Friendly, noting with apprehension that Turner's own research shows the move would take $5 billion out of federal revenues when it's combined with income-splitting for pensioners. "It's cutting taxes for people who have more money."

Critics of the idea also point out it will do little or nothing to help low-income singles or couples who arguably need help the most.

But John Williamson of the Canadian Taxpayers Federation stresses that higher-income couples shoulder a disproportionate share of the tax burden.The weight is especially heavy for single-earner families.

Well duh they earn more they should pay more taxes. But of course that's the right wings definition of class warfare, taxing the rich. Because only those who are wealthy can afford to have an unemployed spouse living at home.

You may have heard the recent news from the Census Bureau that as of 2005, and for the first time in recorded history, more than half of all adult women are living without a spouse. There are plenty of implications that arise from this latest finding, but as the New York Times points out, contrary to popular perception, this so-called “marriage gap” isn’t about gender, but instead, it’s about education and social class -- women with lower socioeconomic attainment are less likely to marry than women with higher socioeconomic attainment.

And to add insult to injury the folks who will benefit the most from income splitting of pensions will not be widows, the largest group of single pensioners in Canada and the poorest, or the average working class family but those who can afford to retire early or retire and continue working.

Tax relief -- at what cost?

Income-splitting is a vote-getter that would save middle-class families billions of dollars a year in taxes, but experts say that doesn't make it sound fiscal policy. MPs inside and outside the Conservative party are urging Prime Minister Stephen Harper to lower taxes in his upcoming budget by allowing couples to combine their incomes and divide the tax load. Some experts are saying the cost of income-splitting -- anywhere from $3 billion to $5 billion a year -- could blow a hole in the nation's finances.

Tax fairness is rhetoric for tax breaks for the rich and wealthy in Canada.

Rules for this year's biggest financial-planning treat will discriminate in a tricky and illogical fashion among those who have yet to turn 65. That the treat is tricky may explain why Finance Minister Jim Flaherty chose Halloween to announce his plan, but not why he used the term "tax fairness."

He plans to let many couples save taxes by splitting income more equally between the two partners, starting with 2007 tax returns. This golden opportunity will not be restricted in a simple fashion to those of a certain age, income or work status. Instead, eligibility will depend on the type of income.

This is unfair. At one extreme, we could have a former deputy minister splitting pension income as early as age 55, while also collecting a pay cheque from a new job. Yet, an unemployed retiree who never contributed to a pension – or was forced out before qualifying – would have to wait until age 65 to split income.

Basically, you would need to receive monthly payments directly from a registered pension plan, or be receiving income as the surviving spouse of a deceased member of a pension plan in order to split income with a spouse or common-law partner.

Here's how a finance department spokesperson explained the rationale for discriminating on the basis of income type, rather than a person's age, employment status or, say, one's eligibility for a lifetime income.

"The purpose of the age 65 requirement is to target the pension income credit to retired individuals. Individuals have much greater personal control" over when they withdraw money from registered retirement savings plans, registered retirement income funds and life income funds as opposed to registered pension plans.

"Without the age 65 eligibility rule, many individuals who are not retired could gain significant tax advantages well before they attain age 65 by arranging to withdraw money each year as RRSP annuity or RRIF income while still saving for retirement.

"Individuals in receipt of (registered pension plan) income, on the other hand, generally have little control over the timing of their pension payments; they usually only receive such payments when they are retired."

The problem with the line of reasoning is that many pension recipients can and do retire before age 65, and they can and do find new jobs. That can particularly include former police officers, teachers, armed services personnel and civil servants. They collect both a pension and a paycheque or consulting fees.

Meanwhile, others who do not collect a pension could find themselves unemployed and having to rely on their savings.

See:

Income Trusts

Tax Avoidance

Tax Fairness

Flaherty

Garth Turner

Pensions

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Canada, politics, finance, Flaherty, tax, taxes, tax-avoidance, Income-trusts, Garth, Turner, Harper, parliament, income-splitting, retirees, pensions, pensioners, seniors