A briefing note for Finance Minister Jim Flaherty is killing the “dead-money” myth that suggests that corporations are hoarding huge cash reserves instead of reinvesting it into the economy.

The corporate hoarding idea was the byproduct of a scare mongering campaign by the Canadian Labour Congress to complement their larger mission to drastically hike taxes on business. But far more alarming was when both Flaherty and then Bank of Canada Governor Mark Carney echoed the CLC’s argument.

Carney even went so far as to give an anti-business speech to the Canadian Autoworkers Union where he blasted businesses for “making more profit than they know what to do with.”

Thankfully, experts in the Finance Department have quashed the notion that businesses are hoarders and suggested that during uncertain economic times, it is entirely reasonable, and in the best interests of shareholders and the larger public to keep a good chunk of change as a safety net.

The analysis vindicates the Canadian Taxpayers Federation’s position on the issue, which stood in contrast to the unions, Flaherty, Carney and much of the media.

While it’s safe to assume that union bosses will continue attacking business cash reserves to drum up support for tax increases, let’s hope that it’s the last we hear of this disproven idea from senior members of the Canadian government.