Giuliano Zaccardelli - Controversy Over Income Trust File

Controversy Over Income Trust File

In the fall of 2005 the status of income trusts was uncertain. After the close of the markets on 23 November 2005, Finance Minister Ralph Goodale made a surprise announcement that the government would not tax the trusts, and would instead cut dividend taxes. This made trusts and dividend paying stocks even from a taxation perspective. The markets rallied in the hours leading up to the announcement by the government allegedly due to leaks. During the following days, the S&P/TSX Composite Index reached a new five-year high. The day's biggest gainers were income trusts, income-trust candidates, high dividend-paying companies, and the TSX Group itself. The minority Liberal government of Paul Martin fell to a motion of no confidence on 28 November 2005. An election campaign for a 23 January 2006 election began the next day. Near the end of December, the Royal Canadian Mounted Police announced a criminal investigation into the leaking of news of a federal tax change for income trusts. The announcement came in the form of a letter from Zaccardelli to New Democratic Party Member of Parliament Judy Wasylycia-Leis. The RCMP came under criticism for announcing the probe during the campaign. The matter was investigated by the CPC the external review body of RCMP members' conduct. The report of the commissioner concluded that there was no evidence to suggest Zaccardelli deliberately meddled with the electoral process. The chair of the CPC judged Zaccardelli and other RCMP members having acted in an inappropriate manner by not cooperating with the external investigation.