[Trudeau Opposes Tax Free Savings Accounts]
Justin Trudeau: a puzzle inside a riddle. Since the famous Liberal “AdScam” (Sponsorship) Scandal of 2005, the Liberal party has been floundering. After resounding defeats of three would be leaders, the party has resorted to rolling out Justin Trudeau as its latest leader in hope of regaining public trust.
In short order, both Paul Martin and Stephan Dion were each humiliated at the polls by a public that had grown weary of Liberals and the things that Liberals championed. The party also began losing membership. Then, the central core resorted to simply foregoing annual conventions, shutting out policy ideas and appointing a leader.
The first such attempt was the anointment (appointment) of former Harvard academic, Michael Ignatieff in 2008 which led to another crushing defeat at the polls. In fact, the defeat under Ignatieff’s watch saw the once powerful Liberals almost pushed out of parliament and left as the third party.
Undaunted, the elite little clique left running the Liberals decided that they would adopt the Texas Holdem Poker strategies of doubling down and going all in. Thus, the luminaries and oracles who had taken ownership of the Liberal brand launched Justin Trudeau.
The Trudeau name was hoped to have such a cache of voter recognition that eldest son (Justin) would have a virtual cake walk into the position of ultimate power. Justin was inserted into the leadership role of the Liberal Party of Canada by way of a quick appointment to the position in April 2013.
I was quite prepared “give the kid” a chance. How bad could it be to see my once favorite political party rise like the legendary phoenix from the scandal laden history of the party’s past? So,,,,,we all waited to hear from Justin as to policy and vision. Over two years past and the sound of crickets resonated through the Liberal wing of Canada’s politics.
He travelled, so he said so as to learn about us Canadians. Stories began appearing about Justin charging speaker’s fees to charities. I admit that as a founder of such a charity (getting text books to Aboriginal kids in remote areas) the notion of selling his speaking services to charities harkened back to the days in the late 1980’s when (in Ontario, the Patti Starr scandal) a government was also caught up in a scandal resulting from charitable funds being siphoned off by another Liberal government which was also sent packing.
Justin fessed up that he “won a lottery” by virtue of his being born into a very wealthy family. The Ottawa Citizen that he had inherited nearly $2.0 Million when his father died in 2000. The immense Trudeau estate was the product of his fraternal grandfather, Charles-Émile Trudeau, who made his fortune in Montreal gas stations in the early part of the 20th century. He rolled his money into real estate, carrying the family through the Depression. His present “valuation” of the family wealth is yet to be revealed but is likely enormous. Charles-Émile Trudeau’s estate was well managed by the late Pierre Trudeau who established 90562 Canada Inc., the federal corporation that held Trudeau’s portfolio of securities, managed by Montreal investment firm Jarislowsky Fraser.
The idea of 90562 Canada Inc. to guard against the possibility that the money would vanish in a spending binge. The scheduled transfer concludes only when Justin reaches age 45 in 2016. Justin is certainly NOT middle class and it is telling that his own father saw fit to shelter the family inheritance from a man (Justin) who now wants to run the entire country’s economy. Life is funny that way.
Justin’s statement about “winning the lottery”, meaning that his family name was a winning ticket has also been parlayed by Justin into a very lucrative public speaking gig. It is ironic that a man (Justin) who’s sole vocational experience consisted of a short term as a high school drama coach and a white water raft guide could pull it off but Justin has admitted to netting $1.2 Million in speaking fees during the past 6 years. He does state that he abandoned speaking tour upon being appointed “leader” of the Liberal Party in 2013. It is fairly apparent that Justin Trudeau has cashed in on the family name (Trudeau).
Up until the 2015 federal election was announced in August 2015, sketchy little of Trudeau’s plans for Canada in the way of policy have become known. Instead, Trudeau had attempted to wiggle his way into office based solely on personality and appearance. In many ways, it is reminiscent of the traditional snake oil salesman of 19th century, there was very little of merchantable value being disclosed by Trudeau who, instead resorted to stunts such as boxing and a gimmicky plan to put marijuana onto the streets.
Things took a bad turn for Justin Trudeau when the ruling Conservatives revealed a budget break for seniors in May 2015. It was not a big deal but it was a glimmer of hope for seniors when the Tories announced that they announced that they would increase the annual maximum contribution into Tax Free Savings Plans (TFSA) from $5,500 to $10,000.
For some twisted logic, Trudeau has made the TFSA the mountain upon which he wishes to do battle. In so doing, he has carelessly attacked seniors.
The TFSA Issue
My generation (post war baby boomers) was taught thrift. Like thousands of others in my generation, we deferred tax on a restricted contribution limit into Registered Retirement Savings Plans (RRSPs). It was a foregone conclusion that when we needed the money later in life, our withdrawals from our personal RRSPs would be taxable. Since retired, our taxable income would be less and, therefore the money withdrawn from RRSPs would be taxed at a lower rate than the taxes we paid while working.
By age 71, everyone with an RRSP must liquidate the fund. The tax man regulates minimums permitted for annual withdrawals. Obviously, the higher amount taken out each year the higher the effective tax rate withheld by Revenue Canada.
The graduated income tax rates for withdrawal for RRIF require the RRIF carrier to withhold 10 per cent for excess payments up to $5,000; 20 per cent if the payment is between $5,000 and $15,000; and 30 per cent for payments above $15,000.
And, therein is the rub for seniors. You are compelled to withdraw your pension (RRSP) savings with tax deducted and then charged tax a second time on any meager earnings that your withdrawal might yield.
Very rarely do we find something done solely for seniors but Bill C-59 (May 2015) increased the maximum amount that could be contributed to a TFSA from $5,500 to $10,000. For some twisted reason, Trudeau decided to have a war over the $4,500 annual increase to the TFSA accounts.
Very few seniors having incomes in excess of Justin Trudeau’s mythical wealth threshold of $60,000 per year and it is us senior citizens who have become Justin Trudeau’s latest target. Various publications had christened young Trudeau as a modern day Robin Hood who is taking from the wealthy and aiding the poor. That dubious title apparently only applies if one is not a senior citizen.
The ominous truth about RRSPs and RRIFs is that money stuck in these funds at the time of death of the fund holder can only be transferred to a spouse without getting the full impact of giant government tax grab. For the thousands of widows and widowers hold RRSPs and or RRIFs, there is no way to transfer those funds from one’s estate into the hands of his/her children. The single viable investment vehicle that enables one time RRIF and RRSP money to move into the hands of one’s children is by creating an account such as TFSA and using it as a home for those savings leaving dependants as co-holders of such accounts. Not so the case of 90562 Canada Inc.; where Justin Trudeau’s future wealth cold quite easily is moved offshore avoiding any Canadian tax.
Fairness is Not Fair (J. Trudeau)
Justin Trudeau has shown a terrible bias against senior citizens. His hyperbole about the increase in full retirement age from 65 to 67 for Canada Pension income is what it is: nonsense and intentionally twisted misinformation.
The grim fact is that overly loose immigration policy is quickly eating up the core of the CPP fund which has payments being made from the fund at a higher rate than contributions to the fund. Thus, the reality is that many/most working class seniors continue to work beyond age 65. That increase of two years before being able to collect Old Age Security and the Guaranteed Income Supplement (from 65 to 67) is NOT the $2.7 Billion tax grab as alluded to by Trudeau and is “spin” at its most juvenile level. Perhaps he fear alienating the immigrant vote by advocating lengthening the residency in Canada rules prior to permitting newcomers to dip into the government pension funds.
What better way to close off a piece on Trudeau economics than by using his own words, “fairness is not fair.”
Copyright Thunderbird Rising 2015
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 The Ottawa Citizen, Glen McGregor, February 14, 2013.