CI Financial Corp. president Stephen MacPhail, whose firm is an outspoken opponent of sales taxes on investment funds, notes that the HST would be a hidden tax because of securities rules. The regulations governing the reporting of management-expense ratios require fund companies to report a single MER that includes all taxes.
Let me get this straight - because a firm is operating out of Ontario, all of its investors would be charged the 13% HST regardless of what province they lived in? And to boot, they're going to hide it from the taxpayers within the MER?
With the current state of the world economy, and everyone still pretty jumpy from the constant negative news (aka CNN) - the sheer audacity to charge a provincial sales tax on people not from the province would have me looking to other funds that weren't affected by this ruling. We're already taxed when we spend, taxed when we save, taxed when we save, taxed at death, and now a hidden investment tax? No wonder Kiyosaki is saying stay away from mutual funds, and it's getting more and more difficult for mutual fund sales people to get sales these days. Ontario is already the most difficult jurisdiction in the country to deal with - and now they're coming down and killing their own investment industry?
It's news like this that makes me glad to live in B.C. I've recently had one of my partners working directly with the BC Securities Commission (BCSC) - and from what he's told me it's been very helpful dealing with them, and they've actually saved him thousands on legal fees. Watch out Canada, because if another hidden tax hinders investments based in the East, then we may see a resurgence everywhere else across the country making offers into places other than Ontario. Alberta and their zero provincial taxes looks like an even better stomping ground for the financial corporations these days.
Thanks for reading,