The Canadian federal budget for the fiscal year 2006–07, was presented to the House of Commons of Canada by Finance Minister Jim Flaherty on May 2, 2006.

The Conservatives argued that the GST cuts would benefit all Canadians, including low-income earners and those outside the workforce who do not pay income tax.

Nova Scotia raised the provincial sales tax 2 points as part of deficit-fighting measures under the Dexter government; this was put in place on July 1, 2010.

[10] Analyst Cameron Renkas refuted the Department of Finance's assertion that the United States and Australia took action to shut down flow-through structures.

In his research paper, Digging Deeper,[11] he gave a perspective on how the United States taxes publicly traded flow-through entities and Master limited partnerships, the US equivalent of Canadian Income Trusts.

In his October 31, 2006 policy statement, Finance Minister Jim Flaherty said, "If left unchecked, these corporate decisions would result in billions of dollars in less tax revenue for the federal government to invest in the priorities of Canadians, including more personal income tax relief"[12] but Minister Flaherty did not document his allegation or cite any research to back up his claim.

Analyst Dirk Lever wrote on January 15, 2007, "We cannot understand why any Canadians would support double taxation of retirement benefits - it affects all of us eventually."

John McCallum, the Liberal Finance critic called on Minister Flaherty to explain the reasoning behind the change in Income Trust Tax policy.

[15] In a February 8, 2007 news release, John McCallum is quoted as saying, "essentially they released close to a thousand pages of public documents, not one of which brings Canadians any closer to understanding what type of information or calculations led the Minister to break his election promise and tax income trusts, either the Minister is in contempt of the committee’s motion or he had absolutely no data from his own department before shutting down the sector and destroying tens of thousands of Canadians’ life savings.

The government argued that it could now allow giant corporations to convert as proposed by BCE for its Bell Canada subsidiary, "...a move that would save it $800 million in tax by 2008.

"[23] The Canadian Press voted the Harper Government and Jim Flaherty "Business Newsmaker of 2006" for the announcement to tax Income Trusts on Halloween.