Adrian Mastracci Reacts to the Federal Tax Revisions

KCM, Insight on InvestingPerspective from Adrian Mastracci, Portfolio Manager

"Canada's economic update"For Immediate ReleaseVancouver, BC (October 30, 2007): Some brief comments on today's proposals by the Honourable Jim Flaherty, Minister of Finance:

There are a number of tax incentives that touch everyone: individuals, small businesses and corporations. It's a welcome approach to reducing the tax loads for the long term.

As an example, the lowest personal income tax rate will be reduced to 15% from 15.5%, effective January 1, 2007. The amount that all Canadians can earn without paying federal income tax will be increased to $9,600 for 2007 and 2008, and to $10,100 for 2009.

The Finance Minister estimates that these two measures together will reduce personal income taxes for 2007 by more than $400 for a typical two-earner family of four earning $80,000, and by almost $225 for a single worker earning $40,000.

The markets are likely to applaud the measures as positive steps.

If Canada's economic situation improves from here, look for the Loonie to rise further from current levels. Hence, our exporters may face more challenging times ahead in keeping their costs in check.

Small businesses, who provide the majority of jobs, will be happy to see lower rates. Especially, if the Provinces and Territories join the rate reduction bandwagon.The one caution is that today's measures are only proposals. They must be passed into law first.Of course, tax reductions from any Government in power are really a return of some of the revenues collected by the Government.

I welcome your questions, comments and opinions.

Regards,

Adrian MastracciPortfolio Manager, R.F.P.,KCM Wealth Management Inc."Private-Client" Portfolio Managers & Financial Advisors Suite 1500, Box 1078, 885 West Georgia Street Vancouver, BC, Canada V6C 3E8 Tel: (604) 739-4500 Fax: (604) 739-0234 Visit Our Website: <http://www.kcmwealth.com/>