Local Tory MP Betty Hinton says the Conservatives' ballot-box fortunes should not suffer as a result of her party's decision to break an election promise to leave income trusts untouched.Meanwhile, Ottawa's Halloween scare of financial markets won't spook
Lake City Casino's expansion plans for Kamloops. "It has absolutely no impact on our business plans because we don't rely on our units for any type of external financing for our projects," said Bradley Bardua, the chief financial officer of Gateway Casinos Income Fund. "Our business is a strong, cash-flow generating business, and the business fundamentals have not changed whatsoever."Only the company's market value has plummeted as a result of Finance Minister Jim Flaherty's announcement to tax income trusts, said Bardua. Gateway Casinos Income Fund units had dropped 13 per cent by Wednesday. The fund, established in 2002, owns several casinos in the Lower Mainland and Alberta. It also owns the four Lake City Casinos in the Okanagan and Thompson, including the casino on Kamloops' Victoria Street. Extensive expansions are planned for all four casinos. In Kamloops, Lake City Casino has purchased a lot to build an entirely new casino, complete with an entertainment stage. According to Bardua, these plans are still on schedule. Still, he considers Tuesday's surprise announcement "unfortunate" because of the impact it has on the investment decisions of individuals and companies. Flaherty's announcement effectively wiped out $20 billion worth of market value of companies listed on the Toronto Stock Exchange. But that's just the "name of the game," according to Hinton. "There wasn't any value that vanished, technically, when you take a look at it, because the money wasn't there," the Kamloops-Thompson-Cariboo MP told KTW."I've had a few e-mails from people telling me that they lost their shirts - well, the only way you can lose money is if you sell your stock in a panic. Otherwise, it's simply on paper. "You may have had some expectations it was going to produce a lot more revenue than it actually did. But that's the name of the game when you talk about the stock market." The reason the Conservatives broke their election promise to leave untouched the tax regime governing income trusts, said Hinton, was the looming conversion into income trusts of communication giants Telus and BCE. Such a move, said Hinton, would have deprived Ottawa of corporate tax dollars. "It was going to be a situation where we're going to have corporate Canada paying no income tax and individual Canadians footing the bill," she said. "We're not about making certain corporate Canada gain something it ought not to be able to gain." Hinton called the arrangement under which income trusts operated a "tempting tax loophole." Conservative fortunes during the next election are not likely to suffer, according to Hinton, "because it was a matter of saving the economy." Under the the new regulatory regime, Ottawa will tax the money distributed to unit holders. More than one million Canadians own units in income funds, and several million more invest in income funds through mutual funds. Canada has about 250 income trusts with a combined value of about $200 billion. Tuesday's announcement also included a new measure that allows pensioners to split their income for taxation purposes, which Hinton called "a tremendous boon" for pensioners.
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