Canadian oil executives say they were blindsided yesterday by Ottawa\'s plan to start taxing income trusts.
They warned the move threatens the country\'s ability to maintain oil and gas output.
The energy sector has been the most fertile ground for income funds during the past decade, and companies that have converted to the trust structure now account for as much as one-third of Canadian crude oil and natural gas output.
\"We\'re incredibly disappointed they would do something like this without apparent consultation, and expect this will have an absolutely huge, huge impact on Canadian capital markets -- not just the trusts,\" said David Carey, vice-president of ARC Energy Trust.
No major trust conversions have been announced in the sector recently, but speculation surrounding such large players as oil sands developer Suncor Energy Inc. and the major pipeline firms has recently lifted their shares.
Financial Minister Jim Flaherty shocked corporate Canada yesterday by saying he would tax trusts to stem a flood of conversions and protect tax revenues.
source: Calgary Sun
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