SteveB/Colorado

Penn West: A Slightly Expensive Replacement for Harvest Energy

I agree about "greed" re the Canroy tax. Canadian government has to do absolutely nothing in way of providing services to non-Canadian holders of these trusts. Even with a CPA doing my return, I don't get back a credit for all the taxes that Canada collects. And it is worth remembering that it was a so-called "conservative" government in Canada that decided to kill off the trust concept.

High-Yield Canadian Royalty Trusts vs. Dividend Growth Stocks

I agree: interesting reading, especially the emphasis on portfolio diversity. I'm not sure, however, that the author is fully up to date on the CanRoys. Following is from the May issue of Leeb's Income Performance Letter (note: Dr. Leeb is historically bullish on energy stocks in general and generally bearish on the CanRoys).

His associate writes, in a review of HTE, "Under a 2006 proposal, Canadian trusts would be taxed like other corporations (at the 31.5 percent rate) beginning in 2011. Trust shares tumbled when the news hit because this would eliminate their major advantage. But other plans have since surfaced including bringing the tax back to 10 percent and not allowing any more trusts to be created."

It would appear that the plan for the big change at beginning of 2011 is not a done deal. Or to put it differently, cooler & smarter minds may yet prevail in Ottawa.

For Konchan, you can recoup some of the Canadian taxes you pay when you file your US tax return by completing form 1116.

CANROYs Remain Attractive as Oil-Related Investments

This is a good discussion and I appreciate Mr. Yetiv's insight into the CanRoys. I've held several for about 6 years now. I do need to make one comment about Loup-Garou's reference to "dictator Pelosi stopping American energy independence." I'm no fan of Pelosi, but she isn't stopping anything. The energy companies are.

According to Republicans for Environmental Protection (rep.org), from a post in June by their staff, about 44 million acres of the federal outer Continental Shelf have been leased, but only 10.5 million acres are in production. Why? Yes, there are reasons like a shortage of deep sea drilling rigs. But the loud rhetoric to "lease & drill now" to bring down prices at the pump rings hollow in the face of the facts.

Onshore, 47.5 million acres have been leased, mostly in the West and mostly for natural gas. But again, only 13 million acres are in production. Same issues--shortage of drill rigs? Maybe. But sadly, there is no shortage of inflammatory rhetoric from those who think the USA can drill its way to energy independence.