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Pension Investment Association of Canada Submission in Response to Finance Canada's Tax and Other Issues Related to Publicly Listed Flow-Through Entities (Income Trusts and Limited Partnerships) consultation:

Pension Investment Association of Canada

December 6, 2005

Denis Normand
Tax Policy Branch, Business Income Tax Division
Department of Finance
17th floor, East Tower, 
140 O'Connor St.
Ottawa, Ontario
K1A 0G5

Dear Sirs/Mesdames:

The Pension Investment Association of Canada (PIAC) is the representative association for pension funds in Canada in pension investment and related matters. The Member funds of PIAC collectively manage over $680 billion in assets on behalf of more than six million beneficiaries. This letter is in response to the September 2005 Department of Finance Consultation Paper entitled "Tax and Other Issues Related to Publicly Listed Flow-Through Entities (Income Trusts and Limited Partnerships)".

PIAC has been actively monitoring the consultation process regarding income trusts and has devoted significant resources to prepare a thorough response. Since the consultation process ended prior to the December 31, 2005 deadline, we will not offer a response to the issues raised in the Consultation Paper.

As noted in our letter to the Prime Minister of Canada and the Minister of Finance in April 2004, our main concern was that any proposed solution not discriminate against pension funds by, for instance, introducing caps on income trust holdings or tax on income trust distributions that only applied to pension fund holdings. PIAC is pleased that the solution proposed by the Department of Finance will result in pension plans not being treated differently than any other income trust investor.

Given that issues highlighted in the Consultation Paper remain outstanding, PIAC will continue to monitor the situation and would be pleased to work with the Department of Finance on these important matters. Our fundamental objective is to ensure that any changes do not place pension plans in a disadvantaged position in relation to any other investor, given our responsibility of funding and providing pension income for millions of Canadians.

On behalf of PIAC, I want to assure you of our cooperation and our willingness to consult with the Department of Finance on any pension investment related matters.

Yours sincerely,

Gretchen Van Riesen