Income Trust announcement

For anyone who hasn't read the newspapers today, the Tory government announced yesterday their new "tax fairness" plan. Interesting the way they are positioning this - because fairness is not what comes to mind.

Basically, their plan boils down to tax charged on the distributions from income trusts, that will be fazed in over the next 4 years. At the end of that four years, corporate income tax will go down by 1%. Hmmmm. Yeah, so less income trusts for us to invest in - and less money from the ones we do invest in - and then the companies get a tax break. Yeah, fairness is definitely the first word coming to mind...

Interesting that the two companies that Flaherty focused on in his speech were TELUS and BCE - who had both announced that they would become income trusts shortly. Great way to start a media catfight between two companies who are already at war. Now they can argue which one of them instigated this action by the government.

Anyway, if any of you have a large amount of money invested in income trusts, you may want to re-focus your investment strategy. Although, I wouldn't suggest selling anything today... :-)

Update: This is a really interesting article from the Toronto Star about how these changes will affect people across the board.