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I was disappointed to see the Minister of Finance continue to pursue a national securities regulator for Canada. There does not seem to be any benefit for the individual Canadian investor but there is for the national brokerage industry (consisting mostly of the banks).

Canada does have a national regulator when it comes to advisors in the form of the Investment Industry Regulatory Organization of Canada (IIROC). This was formed by the Investor Dealers Association (IDA) to oversee the activities of stockbrokers in the same way that the police investigate police, the doctors investigate doctors and lawyers investigate lawyers. The self regulatory aspect of broker activities has not proven to be as exemplary as it could have been and so on a national basis we have come to depend on the Ombudsman for Banking and Investment Services (OBSI) which the banks are fighting to have sidelined as a result of it having found too often and too expensively in favour of the aggrieved investor.

If you are abused by your stockbroker as a result of his having churned or stuffed your account with worthless securities, forged your name to documents or stolen money from your account through fraud your provincial securities regulator and some future national regulator will not gain recompense for you. You’ll have to go to court to get satisfaction. When you do you’ll find that there are likely not enough assets left with perpetrator as his wealth has been taken in the form of a fine paid to the regulator.

The whole aspect of securities regulation is falling apart in front of us as the internet takes over from the conventional bricks and mortar model. The stock broker is going the way of the book store. The current model of securities regulation does little to protect the investor and a move to a national regulator without major changes in the system such as strengthening the OBSI, will only further disadvantage the personal investor.

Those of you who read the Canadian business press last week would have been amazed by the story of two forgers fired from RBC Dominion Securities who after a mild slap on the wrist by the Investment Industry Regulatory Organization of Canada (IIROC) are back working, but now at Scotia Capital.

Mr. Rotstein and Ms Zackheim had been forging the names of clients to documents at their first employer for a decade, been discovered and fired. They ran a $500 million book of investor business and this was considered such an asset that it was not allowed to lie fallow and so after a little genuflecting and fore lock tugging in front of IIROC the two forgers went back to work in the securities industry. To insure that no trading business was lost the one year trading suspension hand to each of them was allowed to be worked off in 6 month tranches between April 2012 and October 2014. In that way there would always be someone ready to man the phones while the other forger was suspended from trading.

You would have thought that an organization established to protect investors would be reluctant to have forgers working the phones to investors. That raises a question about the organization. It was set up by the Investment Dealers Association of Canada to regulate the behaviour of any unsavory individuals working in their industry. Sort of like the Mounties investigating the actions of four of their stalwarts tasering a Polish immigrant to death at the Vancouver airport, or the medical association investigating doctors, or legal associations looking into lawyers. You get the picture. An article in the Toronto Star by Ellen Roseman pointed out that if your stockbroker invests all your money until it is all gone don’t bother suing. You can’t win. In my forthcoming book “Decommissioned” I describe how a nice young stock broker managed to take a 68 year old widow’s portfolio to over $2.5 million with 47 trades in one year. Regrettably he started with $ 4.5 million. Neither the Ontario Securities’ Commission nor IIROC could find any fault with that kind of performance.

Regrettably, in Canada the bodies set up as condoms for safe investing are leakier than a Japanese nuclear reactor.

Your Tax Dollars at Work

Alex's ongoing exposé of Government gaffes, goofs and graft...

Once more into the breach ... the wrong way!

TORONTO: The government of the Province of Ontario in its ongoing attempts to override the inequalities created by either state or nature has decided to tackle the issue of the discrepancy in life expectancy between men and women, which now stands at about four years in favour of women. To address this inequality the government has provided $10 million to women's health groups which will presumably help to decrease their life expectancy.

Originally, it was considered that the money might be used to further increase the life expectancy of men, however, the political correctness of such a program was thrown into doubt. The bureaucrats responsible for this latest societal breakthrough are reportedly working on a project which will provide platform or elevator shoes to tall people, cash handouts to the 100 poorest of Canada's richest families and a program of extended unpaid leisure for the province's unemployed all of which it is hoped will cure these social evils.

The innovativeness of Canada's richest province has not gone unrecognized. Bangladeshi officials are carefully monitoring the success of the program to change the life expectancy gap between men and women in Canada. Their government has a similar problem in that men out live women in Bangledesh and if Ontario's program is a success money may be directed to a health program for men in that country.

Your Tax Dollars at Work

Alex's ongoing exposé of Government gaffes, goofs and graft...

FLASH: Dateline Ottawa:

Throw cash at the problem.

Supposing you are the government member for downtown Vancouver, Canada. Supposing your riding is becoming over run with drug addicts. What is the first thing you do? Well if you are Libby Davies, Liberal M.P. for the area you immediately demand federal money. No program, no objectives, no analysis - just a demand for cash. The presence of money will bring immediate solutions. Knowing that federal money is flowing will cause the addicts to eschew their needles for a night at the opera.

I like many Canadians have run out of money to pay for the instant solutions. I know the Old Age Supplement and Canada Pension Plan I paid for are not going to be there when I need them. The funds went for other instant solutions, one of the most notable being blackmail paid to Quebec to not secede. When the funding runs dry the secession will occur anyway.

Because we refuse to pay by putting our wealth out of the reach of the Libby Davies of this world their henchmen have to adopt even more draconian techniques. The collectors have noticed that receipts are dwindling, not just here but throughout the world. I get letters from high taxed citizens of every high taxed country asking for relief. The harder I work the harder the mobsters have to strive. Now they have united in their efforts.

A new article was added to the Netherlands-Canada treaty with which to assist in collection. If you owe money in Canada dating as far back as ten years ago and you have assets in the Netherlands such as a bank account or property in the Netherlands, tax authorities will seize these and give them to Revenue Canada. The drafters of this legislation completely ignored the concept of the immorality retroactivity. Common law has always stated that new legislation cannot be made retroactive. There is of course, complete reciprocity. This may have dire consequences for Canadians who have tax avoidance structures in St. Maarten, Aruba or Curacao.

The collection assistance provision is already in the US-Canada tax treaty. However, the Americans have taken the stance of guarding their citizens in that they will not collect Canadian taxes from a US Citizen. Only from some other national on behalf of Canada.

The collection assistance program is a big hit with the tax gougers and you can expect that it will become universal. The only escape is to use countries that have no tax treaties and do not have any reporting requirements.

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Your Tax Dollars at Work

Alex's ongoing exposé of Government gaffes, goofs and graft...

Government's Sexy Side.

Some may think that Bill Clinton is the US Government's first brush with sex, however the US government has had agencies involved in the skin trade in the past. One example which comes to mind is the famous house of ill repute (actually it is not a house at all, but a collection of trailers) just out of Reno, Nevada called the "Chicken Ranch". The owner of this brothel fell afoul of the US tax agency, the IRS. Not being a foolish chap he decided to flee the US for Latin America rather than fight an inevitably losing battle with tax collectors.

The IRS seized his assets, including the brothel, for unpaid taxes and continued to run the brothel for a number of years until a buyer could be found. Sexual prostitution is legal in Nevada and there are a number of such establishments around the state. It is not known how some of the other madams reacted knowing that they had the US government for a competitor.

Canadians should not be too smug. The case of the Department of National Revenue versus Mrs Macdonald is still on the books. In this case the government sued a madam over taxes, knowing full well that it is illegal in Canada to live off the avails of prostitution. But they took her money none the less.

With governments now involved in bootlegging, gambling and the numbers racquet can whore houses be far behind? After all, they have already determined the business is profitable. Don't be surprised to soon see "Johnny Canuck Beaver Ranches" or "Uncle Sam's Salacious Saloons" in your neighbourhood. The profits from these will of course be dedicated to increased daycare, health and MP's pensions.

Liberty Consulting Corp., Box 378, Providenciales, Turks and Caicos Islands

info@alexdoulis.com 416-955-9511

© Copyright 1998 - 2007 Alex Doulis. All rights reserved.

Your Tax Dollars at Work

Alex's ongoing exposé of Government gaffes, goofs and graft...

FLASH: Dateline Ottawa:

DIVORCE PART II

What F. Scott Fitzgerald said about the rich being different than the rest of us applies to politicians as well. Be thankful you don't have their problems.

When the speaker of the Canadian House of Parliament, Gil Parent, was discovered by his wife to be taking his horizontal refreshments with the lovely Sandra Page of Toronto his wife took umbrage. She left the cad but as well took her Air Canada free travel pass. This is the pass that allows MP's, Senators, family and other hangers on, to fly about without having to impose on their tax free allowance. Apparently the only other species to have this ability are heavenly angels. But I digress.

This inconsideration by the wife left the Speaker with a logistics problem. His mambo partner was stranded in Toronto without free air travel while he was in Ottawa. Thankfully the tax payers once again stepped into the breach and as group volunteered to pay to have a government limo proceed to Toronto on Fridays to pick up the girl friend. Those same taxpayers didn't even balk when it was learned that the driver had to be paid overtime to return the lovely to her digs in Toronto on Sundays.

This latest travel innovation has caused a protocol concern in Canada's government circles. The question now being asked is: if unofficial mates can be moved at taxpayers expenses what are we to do about the multiple wives of Mormon and Muslim parliamentarians?

The answer is: If Air Canada has to pick up the tab for any more free loaders, it is about time to dump the stock.

Your Tax Dollars at Work

Alex's ongoing exposé of Government gaffes, goofs and graft...

FLASH: Dateline Ottawa: ----

New medical breakthrough! Skin Cancer may be curable!

For years cancer researchers have laboured under the delusion that skin cancer was a result of over exposure to the sun. Not so. Senator Andrew Thompson who claims to have the affliction moved to sunny Mexico for health reasons and has remained there. It is thus concluded by some researchers that the Senator's exposure to strong sun light and balmy weather may be brining his affliction into remission.

Regrettably the Senator’s health situation precludes his coming up to Ottawa to sit in the Senate to provide “sober second thought” to the bills being put forth by the Government. 

It is believed in some quarters that the Province of Ontario's new photo identification health card to deter fraud may be an out growth of Senator Thompson's skin cancer research. The card it is hoped will help identify fraudulent claims for senatorships based on health reasons. Apparently the Liberal caucus is bracing for an onslaught of demands for senatorships and Mexican residency from Canadians claiming to have skin cancer.

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Liberty Consulting Corp., Box 378, Providenciales, Turks and Caicos Islands
info@alexdoulis.com 
416-955-9511

Your Tax Dollars at Work

Alex's ongoing exposé of Government gaffes, goofs and graft...

 Divorce Political Style.

The current mate looking a little shop worn? Varicose veins, wrinkles and sag taking their toll? Then its time to swap the fifty year old for two twenty-fives. Alimony a concern? Not a problem if you're in the political class.

A former provincial premier when retiring to Florida thought that the bikinis were more interesting than support hose and parted with the old wife. To ease her pain of abandonment he put her in the Canadian Senate for $64,000 a year and the big expense account. Even if she lives to 75 and has to depart the senate she'll get that wonderful pension. How thoughtful!

A single incident? Not so! Former Prime Minister Kim Campbell having acquired a new toy boy was a touch concerned about former husband Howard Eddy's ability to tough it out in the real world. Rather than force him to survive on generous alimony out of her pocket she landed him a job on the Immigration and Refugee Board at $89,000 a year.

Watch for an appointment for the former Mrs. Art Eggleton.

This year when you sign that cheque to Revenue Canada you can be consoled that some of your money is going to alimony so that Janis Moores and Howard Eddy will not feel the heartbreak of abandonment.

Secure ordering of my Books

  HOME  |  BOOKS  |  TAX TIPS  |  YOUR TAX DOLLARS AT WORK  |  HORROR STORIES  |  CONTACT

Liberty Consulting Corp., Box 378, Providenciales, Turks and Caicos Islands
info@alexdoulis.com 
416-955-9511

Your Tax Dollars at Work

Alex's ongoing exposé of Government gaffes, goofs and graft...

FLASH: Dateline Ottawa:

Golden Parachutes turn to Lead.

The Government of Canada announced last year that retired families earning more than $54,000 would have their Canada Pension Plan and Old Age Supplement income "clawed" back. Under the scheme wealthy Canadians would not benefit from the pensions they paid for. Who are those fat cats? It's probably you!

A recent analysis of the average Canadian family showed that they earned $49,000 and paid roughly $11,000 in direct taxes. That means that 50% of the families earned more than $49,000 or perilously close to $54,000 cut off point. The question many Canadians will now have to ask themselves is do they work like maniacs for the balance of their productive lives to scramble enough together to live on or do they just kick back knowing that if they do nothing they will fall under the boundary and get their government pension. The second choice is made less viable by the fact that Canada Pension Plan contributions (call it tax) will increase to 9.9% of income (note that is not 10%) reducing the level of earnings available for savings. So far only 10% of Canadians have decide to take the first option. Another 2,000 Canadians annually have chosen to take their savings on a Caribbean vacation.

This draconian action on the part of the government was occasioned by the dismal performance of the CPP contributions which over the life of the plan have returned 1.5% annually. An investment in a stock index fund would have produced 9%. Apparently Canadians had their CPP premiums invested in sure winners such as the Montreal Olympics, Expo 67, Mirabel Airport and others too numerous to mention. The plan last year paid out $500 million net, has $40 billion in assets and $60 billion in liabilities. The most intelligent answer would seem to be to put it out of its misery.

It was refreshing to read in the business pages that the Ontario Securities Commission is questioning its effectiveness and relevance in upholding its mandate to protect investors under the Ontario Securities Act. Its past pursuits of Mr. Felderhof, Mr. De Zen and now Mr. Telfer have little to do with protecting investors and much to do with bravado.

The residents of Ontario are faced with sky high mutual fund fees and brokerage commissions. Their accounts are often churned and stuffed by commission driven brokers desperate to achieve their quotas. This has been going on for years and become more intense as the retail investment industry has become more oligopolistic. 

It is only logical for any re-formulation of the OSC by the OSC will be self serving. That, combined with a Securities Act that is 22 years old, is good grounds for an entire review of retail investing regulation in the current environment. The online trading, high frequency trading and various instruments available have left both the Commission and the Act behind.

When situations become difficult the OBSI, IIROC or the federal department of finance are called in. When was the last time you heard of a retail broker being reprimanded? It would be better for Ontario investors if an enquiry were established to determine the necessity and relevance of the Ontario Securities Act and the OSC and bring about relevant models.