The knell of corporate income tax sounds

Converting a corporation into an income trust appears to be the latest Canadian fad. What was once a tax loophole few, and only mature corporations exploited appears to be becoming business as usual, after today’s announcement that Bell Canada will follow Telus’ lead and transform their corporations into trusts. In the past RBC CEO Gord Nixon has suggested taht Canada’s largest bank could benefit by converting to an income trust structure. In the last five years, the number of income trusts in Canada has more than quadrupled. With every new trust conversion, upwards of 80% of its corporate income is filtered through unit holders avoiding all but personal taxation. The impact of the proposed telecommunications’ trust conversions on Federal coffers looks to be $1.5 billion annually, according to NDP finance critic Judy Wasylycia-Leis. Will the Conservative Party of Canada act to ensure the stability of Canada’s revenue raising system and finally close this loophole?

~Manatee

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