Master Limited Partnerships

Some project developers in the United States have been trying to reorganize recently as "master limited partnerships" in an effort to create more value in their companies. The move also gives them an acquisition vehicle that can afford to outbid other companies for existing assets. Most income earned by corporations in the United States is taxed twice — once to the corporation and again to the shareholders when they receive the earnings in the form of dividends.

US and Canadian businesses have been searching for ownership structures that would subject their earnings to tax only once.

Many Canadian companies found a way to do this by converting to "income trusts." Units are traded on the Toronto stock exchange, and such trusts now account for 10% of companies traded on the exchange by market capitalization. The Canadian government became concerned about the loss of tax revenue and put a halt last fall to any further advance tax rulings that such structures work until it could