Canadian businesses have known for years that the tax laws for income trusts were changing Jan. 1, 2011, but some waited until the very last minute to convert to a corporation.
There was no penalty for waiting for so long, but it created a time crunch at the end of 2010 in which the companies and their legal teams had little time to waste. To prevent any problems, some businesses like Crescent Point Energy Corp. opted for conversion way back in 2009.
Examples of the firms that converted in the nick of time include well-known names such as Second Cup Ltd., formerly Second Cup Income Fund, and Peyto Exploration & Development Corp., formerly Peyto Energy Trust.
In 2011, only a few trusts will remain. Most notably, REITs will stick around because they were never included in the SIFT rule changes. The others are typically those that have tax credits - possibly from buying companies with tax pools - that will allow them to delay their conversion for a little while longer.
The last minute conversions have also spawned a few name changes. For instance, Jazz Air Income Fund is now Chorus Aviation Inc. and Fort Chicago Energy Partners LP is now Veresen Inc. For anyone who's interested, Fort Chicago's new name was inspired by the Latin phrase "vis vires," which means "with power, force, strength" coupled with "energy." Here's to a 2011 with those three attributes sending that stock soaring.
Tim Kiladze