Finance Minister Ralph Goodale tried to put a lid on the messy income trust debate and placate angry investors yesterday by promising to lower taxes on dividends. But the surprise announcement was botched, creating momentary confusion in the business community and prompting some to suggest that Ottawa's policy-on-the-fly is a poor solution to the trust problem.
Mr. Goodale, whose ruling Liberal party is expected to be defeated next week, surprised many observers by announcing a change in tax policy before the next election. His review of the income trust sector, which rapidly snowballed into a heated political issue, was not expected to be completed until the end of this year.
The haste of this decision was readily apparent. Mr. Goodale's parliamentary secretary, John McKay, gave a television interview shortly before Ottawa formally announced the dividend tax cut, and mistakenly suggested the government also planned to levy a modest tax on income trusts.
Mr. Goodale denied that Ottawa was seriously considering a tax on trusts and suggested Mr. McKay was mistaken.
"We are not proposing any tax on trusts," Mr. Goodale said.
Sources said Ottawa was still debating this option hours before it made its decision, but opted not to meddle directly with the sector because of stiff opposition from both pension funds and trusts.
They can't even get their stories straight any more on the fly, even when billions in tax revenue are at stake, and an entire sector of the investment industry is poised to turn its guns on them at election time.
Ralph Klein set the Tory faithful panicking with a few of his usual ill-timed and ill-considered comments to keep himself in the headlines:
"If I were a betting man," the Progressive Conservative Premier said to reporters after he was asked whether he thought the election result would be the status quo, "I would say there will be another minority. I wish that wouldn't happen . . . It's a damn shame."
Mr. Klein made the prediction about another Liberal government after being asked to evaluate the federal Conservatives' chances.
He said that many voters, especially in Ontario, which has 106 seats in Parliament, likely would not support the Tories because its leader, Stephen Harper, is perceived as "too much on the right."
"Maybe, I'm wrong, I hope I'm wrong," he said.
Better for us that Klein get his drunken babblings out of the way before the election is called than kneecap us towards the end of the campaign like he did last time. This will be out of the news cycle in a couple of days because Ralph's wind isn't enough to pump it up even in a hostile MSM.