The initial accusation that the Finance Department leaked inside information about imminent changes to the taxation of income trusts and dividends, while compelling, lacked any real evidence. In that context, Finance Minister Goodale's explanation that suspicious market activity was merely speculation was plausible, if not convincing.
All that has changed now that evidence has surfaced about a senior advisor in the Finance Department calling CARP, an advocacy group for Canadians over 50, to notify them of a policy announcement later that day with the unspoken understanding that they would get what they wanted on income trusts.
The chart below shows the S&P Canadian Income Trust Index (^GSPRTCM) rising in the second half of the trading day, particularly just before the close, relative to the overall TSX Index (^GSPTSE). The movement in some individual issues, where trading volumes sky-rocketed, is even more pronounced.
Notwithstanding recent backtracking by CARP, there is now enough smoke for the Ontario Securities Commission to investigate allegations of insider trading. Ralph Goodale has some explaining to do.