Income Trust Market Update - June, 2009

Decisions with respect to any particular income trust will depend in part on the economic outlook for the economy as a whole and the relevant sector in particular. While there are always uncertainties about any forecast, it is clear that Canadian economic growth will be negative in the order of minus-three percent in 2009 and weakly positive in the order of one-and-a-half to two percent in 2010. Inflation is likely to remain below the Bank of Canada target in 2009 and 2010 and hence the policy interest rate is likely to remain extremely low at least through this period. Growth in 2011 and 2012 is likely to be stronger but excess capacity is unlikely to be eliminated much before the latter part of 2012. The best planning assumption is for the Canadian economy to be operating at capacity in 2013 and for global demand for com-modities to be strong once again.