The Canadian federal government recently announced sweeping changes to the taxation of publicly traded income trusts and limited partnerships. These developments present considerable challenges but, arguably, provide potential opportunities for increased cross-border transactions.
After an initial flurry of sell-offs, the Canadian equity market has rebounded, and the investment bankers are no longer preaching doom and gloom. In fact, these changes to the Income Tax Act may prompt additional interest in Canada, not from equity investors, but from acquisitive entities that could not previously compete with the prices income trusts were paying for assets.
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