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Media Release

Energy trusts tell Finance Committee “it’s not too late to get it right!”

 

Calgary, AB – May 30, 2007:  Returning to Parliament Hill, the Coalition of Canadian Energy Trusts demanded that government revisit the issue of energy trusts and fix a promise broken to all Canadians. During hearings on the Federal Budget, the Coalition reviewed its position for the Federal Standing Committee on Finance.

 

“When the Conservatives broke their promise not to tax trusts, it came as a total surprise to millions of hard working Canadians—and it will have severe negative economic impacts for all of them,” said John Dielwart, Co-Chair of the Coalition and President and CEO of ARC Energy Trust. “The government continues to ignore their concerns and has advanced their broken promise into Budget 2007.”

 

On February 1, the Coalition presented to the Committee a complete document outlining the facts behind the Coalition’s position that energy trusts should be exempted from the Conservative government’s so-called Tax Fairness Plan. At that time, the Coalition challenged government to refute the report and its conclusions. To date, the Coalition has not received a response.

 

“Our Coalition has made every attempt to understand how government arrived at their tax leakage calculation,” said Mr. Dielwart. “The Committee’s previous investigation into the trust decision has revealed that the government has intentionally prevented this information from coming to light. In the absence of information, Canadians have no alternative but to believe the government’s decision was ill-informed and not well thought out.”

 

During the presentation to the Committee, Mr. Dielwart identified the key points that make up the Coalition’s position on the taxation of income trusts:

 

  • Energy trusts do not cause tax leakage
  • Taxes are not avoided, they are transferred to the unitholder
  • Energy trusts enhance energy productivity
  • US Energy trusts in the form of MLPs and LLCs not only exist but are expanding rapidly
  • Canadian junior oil and gas companies are struggling today due to materially reduced access to capital resulting from the trust tax announcement
  • The increased cost of capital imposed on the energy trust sector has negatively impacted the economics of important projects including those utilizing carbon dioxide capture and storage.

 

The Coalition also reviewed for the Finance Committee support for trusts presented in previous hearings by government-selected experts. Despite the opinion of a wide range of experts and that of hard working Canadians, the government has turned a deaf ear and continues to press forward on their ill-conceived tax policy.

 

The Coalition of Canadian Energy Trusts represents 30 energy trusts headquartered in Canada and employing thousands of Canadians. It also represents the millions of Canadian unitholders who saw the value of their investments drop by $35 billion following the announcement of the so-called Tax Fairness Plan on October 31, 2006. More information about the Coalition and its partners can be found at www.canadianenergytrusts.ca.  

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For further information, please contact:

Daorcey LeBray

NATIONAL Public Relations

403.531.0331                               

dlebray@national.ca

       

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