IS TAX FAIRNESS FINALLY..

IS TAX FAIRNESS FINALLY COMING FOR CANADIANS?
At least one Member of Canada’s 40th Parliament has what it takes.
A commentary on a recent letter sent to The Hon James Flaherty,
Canada’s Minister of Finance by a sitting Member of Parliament.

By Victor Drummond ©
March 2009

When the Conservative Party was elected to become Canada’s Government, in 2006, I cheered in the false belief that finally now, after a decade long series of unscrupulous, political shenanigans would come to and end.

Furthermore when Member of Parliament, for the riding of Saanich-Gulf Islands, British Columbia, Gary Lunn announced he had succeeded in having, outstanding income taxes, levied on income that never came in, (phantom income), and related penalties revoked I was sure all Canadians were only a few steps away from being taxed fairly.

What a joke.

The “Tax Remission Order”, (TRO), signed by G. Lunn, S.Harper and M. Jean merely added to the unfairness of the whole boondoggle. Some 44 former employee’s of the defunct SDL Optics/JDSU corporation in Saanich were the only victims to benefit from the TRO leaving thousands of similar victims with no tax relief.

In spite of the high sounding rhetoric, then spouted by the newly elected Prime Minister Harper, MP, Gary Lunn, and Minister of Finance James R. Flaherty, tax fairness was still denied to the remaining large majority of Canadians victimized by that same defective income tax legislation.

During the year 2007 fine speeches were made by Stephen Harper and James Flaherty telling Canadians that action was being taken to create and fill new Tax Ombudsman position in the Federal Government and new procedures for submitting appeals for a new Tax assessment were being implemented.

The Tax Ombudsman was put in place with the power to admonish agents of the Canada Revenue Agency if they failed to talk politely to taxpayers when telling them to pay up or else. (Another joke to be sure).

While the Canada’s defective taxable legislation, and equally outrageous application of same, produced victimized taxpayers en masse the system of redress was designed to handle one-at-a-time appellants. This guaranteed only a very small minority of victims would ever receive fair treatment by having their tax on phantom income and/or related penalties revoked. A very self-serving system of redress to be sure.

In spite of newspaper articles condemning Canada’s phantom tax policy e.g. “What about the rest of us?” National Newspaper Financial, and “Change the law don’t just mask the problem”, Vancouver Sun: Canada’s government has totally ignored this atrocity.

And in spite of the U.S.A. government amending their similarly defective “Alternative Minimum Tax”, (AMT), legislation in October 2008, Canada’s government and all Federal Political Party Leaders, and Members of Canada’s Parliament, have turned blind eyes and deaf ears to every appeal to have this outrageous legislation rectified.

Until now only one person elected to Canada’s Parliament has addressed such abuse of their constituents, has spoken out in defence of their abused constituents and made an attempt to obtain fair treatment for them i.e. The Hon, Gary Lunn, MP for the riding of Saanich-Gulf Islands B.C.

Unfortunately his efforts were severely compromised by the way his effort to obtain fair taxation for all Canadians was mismanaged actually making the overall abuse even worse.

In February 2009 another Member of Canada’s 40th Parliament responded to the appeal of a victimized constituent and took the time to meet with him and obtain details of his distress.

This outstanding MP has demonstrated several other qualities that have been very obscure regarding every other person elected to Canada’s Parliament in the past eight years. e.g Intelligenge, Comprehension, Fairness, Justice, Compassion, Decency and above all the Moxie to take action when an constituent has been treated outrageously, regardless of the risk of personal consequences.

Action which may bring criticism and/or retribution from their fellow MP’s and possibly party leader.

Here is what this genuine elected representative of the people did:-

This Member of Parliament wrote a letter, on House of Commons Letterhead, addressed to the Hon, James Flaherty, Minister of Finance which contained, among other things, the following detail and call to action:-

“I am writing to you today to urge that you immediately move to correct that section of the Income Tax act dealing with the Deferral of the Tax on Stock options which can and does result in taxpayers being liable for huge amounts of tax on income they never received. Irrespective of the original intent of the legislation it is now obvious that what is happening was never intended and has resulted in a trap that the uninformed all too readily fall into. Government has a duty to protect its citizens from such perils.”

And:-

“You are no doubt aware of the issue, indeed just over two years ago MP Gary Lunn succeeded in obtaining a remission order for a number of employees of JDS-Uniphase who were in a similar situation. At that time he was quoted in the Vancouver Sun as saying "It's not in the interest of government to tax people on money they never saw." further the Prime Minister is quoted by the Times Colonist as saying that the problem was incomprehensible and promised: "We'll get it resolved."

“My constituent and I are left wondering why, in this Canada where equality is enshrined in our constitution, some people are “more equal” than others and why the problem has indeed not been resolved. This is an inequity that should immediately be corrected.”

And:-

“Minister Flaherty, I am seriously concerned that we have innocent Canadians and their families, who have worked diligently all their lives, now being effectively robbed (by an unintended “quirk” of the tax law) of their life savings, their homes and their right to the comfortable retirement they have laboured long and hard for. Many of these, my constituent among them, have now lived for nearly nine years under this unimaginable stress, made worse by the fact that it seems they are helpless to do anything about it.

Canada now appears to be alone amongst the major economies in applying the law in this fashion. Indeed in the USA, until October of last year the law was the similar but, (apparently after 2 suicides), Congress passed an amendment that comprehensively provides relief for tens of thousands of workers suffering from the unintended tax burdens, restores the incentives put in place for starting and growing new businesses, and returns to employees and their families the taxes on income never received.

The incentive to start, grow and support Canadian businesses was surely the intent of this law, but we seem to have gone astray as we now have a situation where some Canadians pay the tax and some do not and Canadian workers are liable for horrendous taxes compared to co-workers in the same company who are US based. ”


And:-

“We should not do this to our citizens and, irrespective of cost, I feel there can be no price placed on the health, happiness and equality of our citizens. The tax system is designed to share real wealth and it is wrong to use it in such a fashion, wrong to tax on income not received, wrong to play favourites and tax some and not others, and it would most certainly be wrong to justify continuance of this inequity by saying it will cost too much to correct. The moral cost to Canada of not correcting it would be much much higher.”

“Minister Flaherty, let us not be partisan on this issue rather, in a true spirit of cooperation amongst all parties, let us move swiftly to correct it.
I am sure there are a number of solutions possible and confidently leave it to you to choose that which is most appropriate. I look forward to a quick and positive resolution as surely these people have suffered enough?”



“Respectfully submitted,”

(MP’s Name Withheld)

Will this display of comprehension, decency, and righteous outrage catch on in Canada’s Parliament? It should if they deserve to be our government.

Will some member of the House of Commons rise to introduce a bill to amend Canada’s defective “taxable benefit legislation” and fairly compensate those victimized by it, as the Americans’ have done for their victims of their flawed AMT legislation?

If the U.S. Government can take such corrective action, while fighting their economic situation, there is absolutely no reason why Canada can not do as well, or better, for our Citizens.

After all what better way can depression fighting dollars be applied than to restore money to grass-roots Canadians who it rightfully belongs to.

Believe me Mr. Flaherty doing that would be no mistake.

Think About it. Would your MP. fight for your rights?

Victor Drummond ©