Acquisitions Of Canadian Income Trusts

INTRODUCTION

The income trust phenomenon has been a uniquely Canadian experience. Starting in the late 1990s, these publicly-traded unit trusts expanded rapidly beyond their traditional sphere of oil and gas royalty investments and came to dominate the Canadian public real estate market, as well as to occupy a central position in the Canadian capital markets for virtually all business sectors. Their structure as flow-through entities for tax purposes required that they provide a high level of cash-flow to investors. This found much favour in the Canadian capital markets, satisfying a demand for higher yield investments. At the same time, this structure enabled significant Canadian tax savings for both Canadian and foreign unitholders.