Editing Jim Flaherty (section)

=== October 31, 2006, income trust announcement ===
Flaherty was a central figure in the debate surrounding the [[Income trust#The Conservatives propose new rules for income trusts|new proposed rules for taxation of Canadian income trusts]]. His announcement on October 31, 2006 of a rule change to tax [[income trust]]s levelled the playing field between forms of business such that businesses operating as income trusts no longer enjoyed a tax advantage over businesses operating as corporations.  The announcement was accompanied by a further planned reduction in the corporate rate so that the two moves together were not expected to generate additional revenue for the government.

Flaherty said that income trusts would cost the government $500 million annually in lost tax revenue and shift the burden onto ordinary people.<ref>{{cite news | author = Global National | author-link = Global National | title = Exclusive: Flaherty received death threats | publisher = Global National TV | url = http://www.canada.com/globaltv/national/story.html?id=539d04fe-471d-4cfa-9fc6-af81edc7e085 | date = February 1, 2007 | url-status = dead | archive-url = https://web.archive.org/web/20070325125029/http://www.canada.com/globaltv/national/story.html?id=539d04fe-471d-4cfa-9fc6-af81edc7e085 | archive-date = March 25, 2007 | df = mdy-all }}</ref> The Canadian Association of Income Trust Investors said that foreign takeovers of Canadian income trusts have had the opposite effect and caused decrease in federal government tax revenues.<ref>{{cite web|url=http://caiti-online-media.blogspot.com/2007/09/primewest-energy-trust-bought-for.html |title=Primewest Energy Trust -Bought for Nothing Down & No Income Taxes |publisher=Caiti-online-media.blogspot.com |date=September 27, 2007 |access-date=April 10, 2014}}</ref><ref>{{Cite web |url=http://network.nationalpost.com/np/blogs/francis/archive/2007/10/01/takeovers-income-trust.aspx |title=Canada Under {{sic{{!}}Se{{!}}ige{{!}}hide=y}}: Thanks Harper and Flaherty |access-date=January 4, 2008 |archive-url=https://web.archive.org/web/20071224034853/http://network.nationalpost.com/np/blogs/francis/archive/2007/10/01/takeovers-income-trust.aspx |archive-date=December 24, 2007 |url-status=dead }}</ref>

[[Diane Francis]], editor-at-large for the ''[[National Post]]'', urged that the rule changes be recanted, arguing that there were flaws in the policy which hurt Canadian investors.<ref>{{cite news | author = Diane Francis | title = Trusts proposal must be recanted | publisher = Financial Post | url = http://www.caiti.info/resources/diane_francis_articles.pdf | date = December 9, 2006 }}</ref>

Special hearings by the House of Commons Standing Committee on Finance commenced January 30, 2007. [[John McCallum]], the Liberal finance critic, asked Flaherty to explain the reasoning behind the change in income trust tax policy. McCallum said "Your first problem is that having lured hundreds of thousands of ordinary Canadians into income trusts by promising not to raise taxes you then cut them off at the knees."<ref>{{cite news | author = John MacCallum | title = Your first problem is that having lured hundreds of thousands of ordinary Canadians into income trusts by promising not to raise taxes you then cut them off at the knees | newspaper = National Post | url = http://www.caiti.info/resources/john_mccallum_op_ed.pdf | date = January 3, 2007 }}</ref><ref>{{cite news | author = CAITI | title = Mr. Harper Is this what you mean by Transparency? | publisher = CAITI | url = http://www.caiti.info/resources/redacted.pdf | date = February 8, 2007 }}</ref>

On February 28, 2007, the committee released their report, ''Taxing Income Trusts: Reconcilable or Irreconcilable differences?'', recommending a reduction of the proposed tax to 10 percent from 31.5 percent.<ref>{{cite web |url=http://www.caiti.info/resources/income_trust_report.pdf |title=Taxing Income Trusts: Reconcilable or Irreconcilable differences? (application/pdf Object) |publisher=www.caiti.info |access-date=September 16, 2010 }}</ref>

==== Fullard opposition ====
On August 21, 2008, Brent Fullard, president of the Canadian Association of Income Trust Investors, challenged Flaherty to debate supposed tax leakage associated with income trusts. Fullard announced he would put up $50,000, payable to his favourite charity. Given the minister's "current crusade on financial literacy", Fullard believed a suitable charitable cause would be a scholarship for business education. "By doing this we could help repair the damage caused by the Minister's statement that Ontario is the last place to invest."<ref>{{cite web|first1=Barry|last1=Critchley|title=Flaherty's $50,000 challenge|access-date=2014-04-13|year=2008|publisher=[[Financial Post]]|website=financialpost.com|url=http://www.financialpost.com/analysis/columnists/story.html?id=67793cff-2765-40f4-b7c4-da81bc190f09|url-status=dead|archive-url=https://web.archive.org/web/20140414110955/http://www.financialpost.com/analysis/columnists/story.html?id=67793cff-2765-40f4-b7c4-da81bc190f09|archive-date=April 14, 2014|df=mdy-all}}</ref> Flaherty turned down the request. "The tax fairness plan is law. The Minister made his position clear before the finance committee and there is no need for further debate," according to his press spokesperson.<ref>{{cite web
| first1 = Barry
| last1 = Critchley
| title = A tale of two documents
| access-date = 2014-04-13
| date = August 22, 2008
| publisher = [[Financial Post]]
| website = financialpost.com
| url = http://www.financialpost.com/scripts/story.html?id=23b64120-93fc-4783-84f6-3b70d3a7f0fd&k=97729
| url-status = dead
| archive-url = https://web.archive.org/web/20140414121015/http://www.financialpost.com/scripts/story.html?id=23b64120-93fc-4783-84f6-3b70d3a7f0fd&k=97729
| archive-date = April 14, 2014
| df = mdy-all
}}</ref>