U.S. Couple Challenges Canada's Income Trust Policy

Although taxation on existing income trusts doesn't take effect until early 2011, investor sell-offs were immediate. "This decision has had a massive financial impact on thousands of investors in Canada and in the United States... we believe that it breached Canada's NAFTA obligations," Elaine Gottlieb told reporters in Ottawa Tuesday. "Because of this decision more than $30 billion has been lost by individual investors in Canada and more than $5 billion by energy trust investors, like us, in the United States.'' Marvin Gottlieb said Chapter 11 of NAFTA "provides protection for American investors in Canada and Mexican citizens and provides the same protection for Canadians." "This is a blatant discrimination of NAFTA... we believe that a NAFTA tribunal will see the merits of our case and any similar cases that are brought forward." According to the book "Private Rights, Public Problems: A guide to NAFTA's controversial chapter on investor rights," Chapter 11 "provides rights to foreign investors and their investments. A foreign investor is defined as any person or company who makes an investment into another NAFTA Party. Investments are broadly defined, and include the traditional FDI, as well as all types of financial investments, shareholding, secured debts and so on." The couple and their investment vehicles are seeking damages of $6.5 million plus costs and compensation for tax consequences of the award, reports Reuters. ... http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20071030/income_trust_071030/20071030?hub=Canada&s_name= [Proofreader’s note: this article was edited for spelling and typos on October 31, 2007]

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