“These measures will finally restore balance and fairness to Canada’s tax system. We have seen a rapidly growing trend towards income trust conversions, and this has resulted in a corporate tax depletion which is not only reducing federal and provincial tax revenues, but also unfairly shifting the tax burden more heavily onto individuals and families,” said the Minister.

Minister Murphy echoed Minister Flaherty’s views regarding the need to protect and enhance the nation’s long-term economic growth and prosperity. “Income trusts are creating an economic distortion which is threatening Canada’s long-term prosperity. These business structures are limiting the ability of Canadian corporations to reinvest in, and grow, their businesses in order to effectively compete in the global economy,” he said.

Minister Murphy is also very supportive of the significant positive personal income tax changes for seniors and pensioners. “Our provincial government is pleased to support and invest in the initiative to permit income splitting for pensioners beginning in 2007. Pensioners will now be able to retain more of their income in their retirement years thanks to both levels of government,” said the Minister.

Minister Murphy wrote to Minister Flaherty recently to express the concerns the Province had regarding the inequities of the income trust business structure. “It is my view that Canada’s New Government has stepped up to the plate with clear and decisive action regarding income trusts. This new tax fairness plan will be in the best interest of all Canadians,” said Minister Murphy.