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Background > Energy trusts take their case to the Senate

Media Release

 

Energy Trusts Pursue Their Case in the Senate

 

Calgary, AB – June 20, 2007: Canada’s energy trusts presented a strong case to the Senate outlining why the government’s so called Tax Fairness Plan is simply wrong and should not be advanced in the budget.

Both the Coalition of Canadian Energy Trusts (CCET) and the Canadian Energy Infrastructure Group (CEIG) independently presented to the Senate of Canada Committee on National Finance a compelling case why the tax changes will have a strong negative impact on trusts and, in turn, continue to financially harm millions of hard working Canadians.

Speaking on behalf of the CCET, Marcel Coutu, Co-Chairman of CCET and President and CEO of Canadian Oil Sands Trust, highlighted:

  • The Coalition has presented an in-depth report outlining the importance of energy trusts and that the government’s silence on this document suggests it is not refutable;
  • The government heard from its own expert witness “inconvenient truths” noting the important role trusts play in the Canadian capital markets; and
  • The Finance Minister is wrong with the opinion that income trust vehicles do not exist in the United States. Independent research from four months ago notes there were 214 publicly traded trust entities with a combined market cap of $475 billion and that this number has now grown to 225.

Robert Michaleski, President and CEO of Pembina Pipeline Income Trust, presented key points on behalf of CEIG:

  • Canadians rely on infrastructure trusts for the delivery of half of their oil supply, and a substantive amount of natural gas liquids and natural gas are transported daily;
  • The long-term infrastructure assets of trusts are similar to the model of REITs  (Real Estate Income Trusts) and should be given the same tax treatment; and
  • The government’s stated desire to be a world energy leader could be eroded by potential foreign take over of Canadian-managed and operated energy assets.

Collectively the energy trusts agreed:

  • Energy trusts do not cause tax leakage;
  • Taxes are not avoided—they are transferred to and paid by the unitholders at generally higher tax rates;
  • Energy trusts contribute substantively to Canada’s energy security through enhanced production from mature fields and efficient transportation of products;
  • US energy trusts in the form of MLPs and LLCs not only exist but are expanding rapidly; reversing the trend of cross-border acquisitions:

The CCET and CEIG presentations concluded that energy trusts should be excluded from the tax changes.

  

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Fur further information:

Daorcey Le Bray

NATIONAL Public Relations

403.531.0331

dlebray@national.ca

       

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