Over the last several years, the income trust has flourished as a popular form of investment vehicle in Canada. Indeed, income trusts have a current Canadian market capitalization of over $236 billion. The popularity of the structure is largely due to the remarkable returns available to unitholders, along with the significant tax benefits that can be derived from use of an income trust over more conventional business vehicles. Initially, income trust structures were generally restricted to the real estate, oil and gas and utilities industries.

However, the income trust structure has increasingly been embraced by a variety of businesses and the general business income trust now has a market capitalization of over $90 billion. Indeed, well-established companies like Telus Corp. and BCE Inc. have recently announced their intention to convert into income trusts. The income trust structure is ideal for mature businesses with stable and predictable cash flows and limited future capital expenditures.

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