December 7, 2005
The Hon. Ralph Edward Goodale, P.C., M.P.
310 University Park Drive
Re: Petitioning the Minister of Finance to Re-instate the Interest Income tax deduction
Dear Minister Goodale,
As previously corresponded, individuals with fixed income investments have been discriminated against for years. To recap, in the 1980's the government of the day removed the $1,000.00 Interest Income deduction Taking a leap forward to today, seniors are struggling on fixed incomes partially derived from their interest bearing investments. Such fixed term investments provide average returns of less than 3%, savings accounts at 1% - and are subject to full taxation on each penny earned. When inflation is added the result is a near zero return or negative.
My experience is that people put their money in all types of investments purely and simply to derive income. However, tax treatment and marketing of investments now seem to be prime motivators of choice Why where so many seniors up-in-arms over Income Trusts, if not for its tax treatment. Why Income trusts in the first place, but for income. People flocked to Portus on the promise of guarantees and income to their chagrin.
One can argue the toss about the merits of any investment. My point is that otherwise conservative investors are persuaded by the aforementioned into unsuitable investment products because of a tax hook a leveler playing field is needed.
The people of Canada deserve a more equitable tax treatment for investment interest income, I emplore you to re-establish an Interest Income Deduction. The net benefit would put a tax related credit directly into the hands of our senior citizens and provide an incentive to use lower risk investments rather than gambling on.
Ive enclosed letters signed by our clients and concerned seniors urging you to address this issue when parliament resumes.
Principal Director, CEO