Angus Reid poll on Tax Fairness Plan - indicates Canadians overwhelmingly believe it to be Unfair

TORONTO, March 17 /CNW/ - On October 31, 2006 Finance Minister Jim Flaherty announced a 31.5% tax on income trusts in a policy known as the Tax Fairness Plan. The effect of this announcement was the immediate and unprecedented loss of $35 billion in Canadian and foreign investor's hard earned retirement savings. The Tax Fairness Plan has yet to be voted into law.

The policy was advanced on five assertions contained in the ways and means motion, including the belief that it would level the playing field between corporations and trusts and that it would strengthen Canada's social security system for pensioners and seniors.

The Canadian Association of Income Trust Investors (www.caiti.info) commissioned a poll to test Canadian's level of support for this new tax and the foundations on which it is based. From March 13 to March 15, 2007, Angus Reid Strategies conducted a survey of 1138 randomly selected and representative adult Canadians. The margin of error for the survey was +/- 2.9%, 19 times out of 20. The following were the findings:

- Nearly nine out of 10 Canadians say it is difficult to provide for themselves with sufficient income when they retire, given today's low interest rate environment.

- Only one in five Canadians believe Finance Minister Jim Flaherty's proposal for changing the tax rate on income trusts would level the playing field.

- The resounding majority of Canadians say Finance Minister Flaherty's proposed tax legislation is unfair to Canadians who hold income trusts in their RRSPs.

- Finance Minister Flaherty calls his proposed legislation "tax fairness," but two-thirds of Canadians disagree.

- Only one out of 20 Canadians feel that Finance Minister Flaherty's proposed legislation will strengthen Canada's social security system for seniors and pensioners.

- Four out of five Canadians say the federal government should publicly release the data and methodology it used to estimate the amount of tax loss caused by income trusts.

- A majority of Canadians say it was wrong for Prime Minister Stephen Harper to break his election promise not to introduce new taxes on income trusts.

Most Canadians say the Prime Minister should stop the proposed income trust tax until a public, large-scale independent study into the issue has been conducted.

The Canadian Association of Income Trust Investors advocates that to the extent that governments' tax base is unaffected, Canadians should be free to invest their hard earned savings in a manner that they determine best suits their own individual investment needs. No credible evidence has been provided by the Finance Minister to indicate that income trusts result in an overall loss of tax revenue.

Income trusts emerged over the last ten years as an important "Made in Canada" investment alternative that proved well suited to providing retirement income to the 70% of Canadians who do not belong to defined benefit pension plans and who must provide for their own retirement income. The Conservatives' proposal is designed to eliminate this important investment choice for reasons that do not serve the average Canadian's interests, namely the narrow interests of Corporate Canada who are resistant to this change in Canadian's investment preferences. The following account appeared on the Globe and Mail, two days after Flaherty's sudden Halloween announcement:

"High-profile directors and CEOs had approached Mr. Flaherty personally to express their concerns: Many felt they were being pressed into trusts because of their duty to maximize shareholder value, despite their misgivings about the structure. Paul Desmarais Jr., the well-connected chairman of Power Corp. of Canada, even railed against trusts in a conversation with Prime Minister Stephen Harper during a trip to Mexico, and told him he should act quickly to stop the raft of conversions, according to sources."

The cornerstone argument that the government has advanced, namely that income trusts, including the announced conversions of Telus and BCE, would cause tax leakage, is based on an analysis that many credible parties believe is fundamentally flawed and an analysis that the Finance Minister has refused to make public, citing dubious reasons for not releasing this key piece of information. Mr. Flaherty's decision to withhold this key information is not supported by 81% of Canadians.

For further information: For a complete copy of the polling results, please contact: Brent Fullard (brent.fullard@rogers.com), President & CEO Canadian Association of Income Trust Investors, (647) 505-2224