Monday, May 28, 2007

Income Fund Sector Calls on Government to Amend Bill C-52

Bill C-52 Contains "Clear Gaps" That Need To Be Addressed

OTTAWA, May 28 /CNW Telbec/ - In an appearance today before the House of Commons Finance Committee, George Kesteven, President of the Canadian Association of Income Funds, intends to call on the federal government to amend draft legislation pertaining to the taxation of income trusts.

Mr. Kesteven will stress that "clear gaps" exist in Bill C-52, the legislation that imposes a punitive 31.5% tax on income trusts, and ask that the following clarifications be made:

1. Clearly define how income trusts will be treated in legislative terms during the transition period to the new tax.

2. Ensure that there is a legislative framework in Bill C-52 to facilitate conversion to corporate status on a tax-deferred basis similar to subsection 85(1) of the Income Tax Act.
"We respectfully submit that the Finance Committee follows its own advice to the government earlier this year in its report on income trusts, by producing a separate piece of legislation that is comprehensive and includes the guidelines and conversion rules - and is not so broad as to have application to partnerships that are not listed on a public exchange," Mr. Kesteven will say in his prepared remarks. "Only then would all Parliamentarians and Canadians have a clear opportunity to see this issue on its own merits and properly address the income trust issues in this bill."

Mr. Kesteven will also highlight a litany of "unintended negative consequences" that have impacted Canada's income trust sector since Ottawa announced the new tax last Halloween. These impacts include the destruction of billions of dollars of investor value; impairing valuations, cutting off access to capital; and prompting the takeover of close to 15 trusts in the last 6 months, with more than 20 other trusts announcing that they are currently for sale.

"These consequences do not amount to tax fairness but rather the wholesale destruction of a valuable structure in the Canadian economy," Mr. Kesteven will state. "It is not tax fairness to impose a 31.5% tax when corporations on an effective basis pay only 5% to 10%."

Mr. Kesteven will also take issue with claims by government officials that they were prompted to impose the new tax on income trusts to stop "tax leakage."

"It is our contention that federal and provincial tax revenues will not be increased in any way under this Bill," he will say. "The playing field has not been leveled but in fact has been tilted in favour of private equity, foreign equity and pension funds - none of which pay taxes to governments, federal or provincial... At the end of the day, it is not tax fairness when Canadian investors have been disadvantaged and cut off from an investment vehicle that provides them with the cash flow needed for retirement."

About The Canadian Association of Income Funds (CAIF)

Formed in 2002, CAIF/ACFR represents and promotes the interests of Canadian income funds, publicly listed limited partnerships, income trusts and royalty trusts. Members include leading representatives of the major sectors of the income fund industry. Membership is open to all those involved in the funds industry.

For more information about the Canadian Association of Income Funds, please visit their website at

For further information: To arrange an interview with a representative of CAIF, please contact: Brenda Paul-Ishikawa, CAIF, W: (416) 469-0188, M:(416) 420-4538,



Tuesday, May 22, 2007

Jack Layton’s blind adherence to Harper’s tax policy helps promote the sell out of Canada

by Brent Fullard

Jack Layton is an enigma wrapped inside of a riddle. Jack Layton would be the first to call for an open and transparent government, much as he made an impassioned call upon the government to stem the recent wave of foreign takeovers of Canadian companies and to avert the surrender of our energy resources to U.S. interests. However, Mr. Layton need only look into the mirror to recognize a major source of these problems. Jack Layton’s support of the Conservative’s plan to tax income trusts is a major contributing factor to these recent events, making the NDP complicit in the sell out of Canada to foreign Big Business interests.

Read the complete article on CAITI-ONLINE

Friday, May 18, 2007

Garth Turner speaks on Income Trusts in the House of Commons - May 17/07

Garth Turner, MP for Halton, Ontario had the following introduction for this May 17 MPTv video:

Guzzler - Yesterday I was able to speak in the House about the unfairness of the Conservative Tax Fairness Plan - yes, the one that exludes 70% of seniors from income-splitting, taxes the bejesus out of income trust investors, and raises the basic tax rate for every single senior.

For some reason, the Tories go nuts when I rise in the Commons, heckling and shouting and trying to disrupt things. This time it was Dean del Mastro's turn, who took so great an exception to my statement that the actions of politicians have so turned people off it's no wonder we enjoy the same status as used car salesmen.

A member of the Finance Committee, and a full-time apologist for Jim Flaherty, Mr. del Mastro raised a point of order with the Speaker, which he ignored. However, Dean managed to get it on the public record that I had defamed car salesguys. Odd, I thought. But then I saw his car.

Turns out my colleague is a used car salesguy in Peterborough, Ontario. His taste in transportation may explain his progressive approach to the nation's finances. View this video of my short (my time was cut short by a special ministerial accountability session) but sweet speech.



Wednesday, May 9, 2007

C A I T I - O N L I N E: "Chart A shows clearly"

C A I T I - O N L I N E: "Chart A shows clearly"

Here is Chart B

From "Chart A shows clearly"

A summary of Income Trust takeovers since October 31, 2006

Announced Nov 6, 2006
Acquired Halterm Income Fund
Ticker HAL.UN
Buyer Macquarie Infrastructure Partners
Value (millions) 173
Buyer Info US$30B New York based infrastructure inv firm ,
parent company Australian

Announced Dec 4, 2006
Acquired Alexis Nihon REIT
Ticker AN.UN
Buyer Homburg Invest Inc.
Value (millions) 919
Buyer Info Investment firm with lots of properties
(Based in NS, Canada)

Announced Dec 20, 2006
Acquired Calpine Power Income Fund
Ticker CF.UN
Buyer Harbinger Capital Partners
Value (millions) 880 US
Buyer Info (Alabama) Private equity/real estate/
distress situations

Announced Jan 15, 2007
Acquired Sunrise Senior Living REIT
Ticker SZR.UN
Buyer Ventas, Inc. (NYSE: VTR)*
Value (millions) 2,280
Buyer Info US based REIT

Announced Feb 1, 2007
Acquired Lakeport Brewing Income Fund
Ticker TFR.UN
Buyer Labatt Brewing Company Ltd
Value (millions) 210
Buyer Info Labatt is owned by InBev (Belgium)

Announced Feb 4, 2007
Acquired Great Lakes Carbon Income Fund
Ticker GLC.UN
Buyer Oxbow Carbon & Minerals Holdings Inc
Value (millions) 786
Buyer Info Part of the Oxbow Group a private energy company
based in US (Florida)

Announced Feb 9, 2007
Acquired Norcast Income Fund
Ticker NCF.UN
Buyer Pala Investment Holdings Ltd
Value (millions) 87
Buyer Info UK (Jersey), international alternative
investment fund

Announced Feb 14, 2007
Acquired Entertainment One Income Fund
Ticker EOF.UN
Buyer Marwyn
Value (millions) 177
Buyer Info UK based investment firm (PE, MBOs, etc)

Announced Feb 16, 2007
Acquired Amtelecom Income Fund
Ticker AMT.UN
Buyer Bragg Communications Inc
Value (millions) 129
Buyer Info Bragg owns Eastlink, a private telecom competitor
based in the Maritimes

Announced Feb 26, 2007
Acquired Clean Power Income Fund
Ticker CLE.UN
Buyer Macquarie Power Income Fund (MPT.UN)
Value (millions) 419
Buyer Info Canada based Income Trust

Announced Mar 18, 2007
Acquired Brands Income Fund
Ticker ABF.UN
Buyer Associated TorQuest Partners
Value (millions) 43
Buyer Info Canada based private equity firm

Announced Apr 1, 2007.
Acquired KCP Income Fund
Ticker KCP.UN
Buyer Caxton-Iseman Capital Inc.
Value (millions) 804
Buyer Info New York-based private equity firm

Announced Apr 3, 2007
Acquired Gateway Casino Income Fund
Ticker GCI.UN
Buyer New World Gaming Partners
Value (millions) 886
Buyer Info JV of Publishing and Broadcasting Limited (PBL) and
Macquarie (both Australian)

Announced Apr 10, 2007
Acquired Liquor Barn Income Fund
Ticker LBN.UN
Buyer Liquor Stores Income Fund (LIQ.UN)
Value (millions) 158
Buyer Info Competitor, Canada based Income Trust

Announced Apr 16, 2007
Acquired VOXCOM Income Fund
Ticker VOX.UN
Buyer UE Waterheater Income Fund (UWH.UN)
Value (millions) 109
Buyer Info Canada based Income Trust

Announced Apr 16, 2007
Acquired UE Waterheater Income Fund
Ticker UWH.UN
Buyer Alinda Capital Partners LLC
Value (millions) 1,740
Buyer Info US (NY) based private equity firm

Announced Apr 24, 2007
Acquired Thunder Energy Trust
Ticker THY.UN
Buyer PSPIB/Overlord Financial
Value (millions) 406
Buyer Info Public Sector Pension Investment Board (Canadian PP)

Announced Apr 30, 2007
Acquired Custom Direct Income Fund
Ticker CDI.UN
Buyer EdgeStone Capital Partners
Value (millions) 237
Buyer Info Canadian based P/E

Announced May 4, 2007
Acquired Canada Cartage
Ticker TRK.UN
Buyer Nautic Partners
Value (millions) 252
Buyer Info US based Private Equity (group of buyers)