November 07, 2006
Telecoms Trigger Canadian Stock Market Dive?
Telus Corp. and BCE Inc. (parent of Bell Canada) had recently announced that they planned to convert themselves into income trusts so that shareholders would receive larger untaxed earnings yearly. Telus and Bell Canada are Canada's two largest telecoms, and many pension funds have shares in either or both. But not long after their "income trust" announcements, Jim Flaherty, Finance Minister of the current Conservative government, announced new tax plans on income trusts, which reputedly triggered a Cdn$20+ billion meltdown in the Canadian stock market last week. The stocks of both companies dived between 11-13%, wiping out the value of some pension funds.
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