The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Globe Investor

News Sources

Take control of your investments with the latest investing news and analysis

Press release from CNW Group

Income Tax Act Changes and Sales of Shares by MCAN Mortgage Corporation Insiders

Monday, March 19, 2012

Income Tax Act Changes and Sales of Shares by MCAN Mortgage Corporation Insiders17:58 EDT Monday, March 19, 2012Stock market symbol TSX: MKP TORONTO, March 19, 2012 /CNW/ - As a result of recent changes to the Income Tax Act (Canada), if a shareholder and persons who are not at arm's length to such shareholder own 10% or more of the outstanding shares of an corporation, all securities of the corporation held by such shareholder and non-arm's length persons, are deemed to be a "prohibited investment" for tax deferred accounts, such as registered retirement savings plan ("RRSP") and registered retirement income fund ("RRIF") accounts. As a result of these changes, certain insiders and their family members have recently sold shares in MCAN Mortgage Corporation ("MCAN", the "Company" or "we") in significant part, to avoid the imposition of tax on MCAN shares held in their tax deferred accounts.  Such insiders have indicated that future sales of MCAN shares may also occur. Individuals not holding more than 10% of MCAN's shares or not otherwise holding a significant interest in MCAN are not affected by the tax policy change.   However, individuals with concerns related to the tax policy changes should consult their tax professional and advisors for advice.Forward-Looking InformationThis press release may contain forward-looking statements, including statements regarding the business and anticipated financial performance of the Company.  These forward-looking statements can generally be identified as such because of the context of the statements and often include words such as the Company "believes", "anticipates", "expects", "plans", "estimates" or words of a similar nature.  These statements are based on current expectations, and are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements.  Some of the factors that could cause such differences include legislative or regulatory developments, competition, technology change, global market activity, interest rates, changes in government and economic policy and general economic conditions in geographic areas where the Company operates.  Reference is made to the risk factors disclosed in the Company's 2011 Annual Information Form, which are incorporated herein by reference.  These and other factors should be considered carefully and undue reliance should not be placed on the Company's forward-looking statements. Subject to applicable securities law requirements, we do not undertake to update any forward-looking statements.Further Information  MCAN is a public company listed on the Toronto Stock Exchange ("TSX") under the symbol MKP and is a reporting issuer in all provinces and territories in Canada.  MCAN also qualifies as a mortgage investment corporation ("MIC") under the Income Tax Act (Canada) (the "Tax Act").The Company's primary objective is to generate a reliable stream of income by investing its corporate funds in a portfolio of mortgages (including single family residential, residential construction, non-residential construction and commercial loans), as well as other types of financial investments, loans and real estate investments. MCAN employs leverage by issuing term deposits eligible for Canada Deposit Insurance Corporation ("CDIC") deposit insurance up to a maximum of five times capital (on a non-consolidated tax basis) as permitted by the Tax Act.  The term deposits are sourced through a network of independent financial agents. As a MIC, MCAN is entitled to deduct from income for tax purposes 100% of dividends, except for capital gains dividends, which are deducted at 50%.  Such dividends are received by the shareholders as interest income and capital gains dividends, respectively.MCAN also participates in the Canada Mortgage Bonds program, and other securitizations of insured mortgages.For further information: MCAN Mortgage Corporation  Website: www.mcanmortgage.com e-mail: mcanexecutive@mcanmortgage.com William Jandrisits President and Chief Executive Officer (416) 591-2726 Tammy Oldenburg Vice President and Chief Financial Officer (416) 847-3542