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JOURNAL OF ACCOUNTING AND FINANCE
Tax Recovery from Income Trusts in Canada
Author(s): Pauline A. Downer, Alex Faseruk, Ian A. Glew
Citation: Pauline A. Downer, Alex Faseruk, Ian A. Glew, (2013) "Tax Recovery from Income Trusts in Canada," Journal of Accounting and Finance, Vol. 13, Iss. 3, pp. 11 - 20
Article Type: Research paper
Publisher: North American Business Press
Abstract:
The final income trust chapter has played out following 2006 Tax Fairness legislation that levied an
entity tax on newly defined specified investment flow-through (SIFT) organizations. Immediately, market
valuation dropped, followed by private purchases, and most remaining trusts converted to corporations
by 2011. The number dropped from 264 to 60 in five years and sector market value dropped by $41.5
billion. The net tax revenue to government was estimated at $475 million annually, however, with only
$23.5 million in additional taxes collected from foreign investors. The tax legislation seemed ‘fair’,
though it was extremely costly from a domestic market perspective.
