Income trust tax still stinging many investors
dave buston for metro calgary
Mike and Donna Beath watched in horror as they lost over $70,000 in retirement money and $325 in monthly income in the aftermath of the federal government’s notorious income trust taxation scheme last year.
Yesterday, both marched in front of Prime Minister Stephen Harper’s Calgary constituency office in Glenmore landing along with about 50 others carrying placards, in protest of what Donna calls a “blatant lie to voters.”
“All of a sudden (our money) just went… kerflewie,” she said flashing her hand in front of her face.
“There were sleepless nights and it caused a lot of tension in the house besides just losing the money,” she said. “They’ve lied and betrayed us.”
Beath describes the same disappointment as many at the protest, dismayed with the federal government’s decision one year ago yesterday to tax income trusts. In the following days, investors fled from income trusts in droves, driving the unit price of many investment funds into the ground.
The crowd outside Harper’s office, mainly pensioners, are still incensed with the about-face done by the government and the $35 billion lost.
“The biggest reason we’re here is to tell Harper we haven’t forgotten what he’s done to us. He’s destroyed our livelihood in the incomes and he’s destroying Canadian companies and corporation like it’s going out of style,” said protestor Bruce Benson, adding that hearing the news of the financial loss was like “getting hit in the stomach with a two-by-four.”
Many pensioners had money locked up in income trusts because they provided the growth of a stock with a monthly distribution they could count on to live.
Many income trusts have regained much of their post-decision losses. The TSX Income Trust Index is down roughly 10 per cent from where it was prior to the decision and the Energy Income Trust Index is still 16 per cent below.