Probe Clears Canadian Government Officials Of Leaking Tax Announcement

by Mike Godfrey, Tax-News.com, Washington

27 February 2006

An internal Finance Department investigation into the alleged leak to the financial markets of planned tax changes to income trusts has reportedly cleared senior government officials of any wrongdoing.

The investigation was triggered after there was a suspiciously sharp increase in unit trust prices shortly before the then finance minister Ralph Goodale announced after the close of the markets on November 23 a surprise pre-election decision to cut personal income taxes on dividends, in an effort to level the playing field between corporations and income trusts.

According to documents released under the Access to Information Act, while several government officials were aware of Goodale's intentions on the afternoon of his announcement, including the then Prime Minister Paul Martin, two cabinet ministers and various ministerial aides, staff emails apparently attest to the fact that the tax cut was not spoken about outside of government circles.

However, the documents show that considerably more government officials knew of the tax cut prior to the announcement than was previously thought.

A criminal investigation into the alleged leak by the Royal Canadian Mounted Police is ongoing.

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