The rapid rise of income trusts

CanWest Global Communications Corp., Canada’s biggest media concern, yesterday became the latest company to announce its plans to convert some holdings to an income trust. As well yesterday, the federal government said it is considering ways to tighten the rules governing income trusts as a possible means of staunching the annual loss of hundreds of millions in corporate tax dollars.

CanWest said it will spin out 28 per cent of its Canadian newspaper and online businesses with the exception of the flagship National Post - into the new CanWest MediaWorks Income Fund.

CanWest’s newspapers consist largely of the venerable Southam group, acquired for $3.2 billion from Hollinger in 2000.

The online operations embrace the Canada.com Internet portal, FP infomart.ca and FP DataGroup.

The proceeds are to be used to pay down debt, largely taken on to acquire the print-media assets five years ago from Conrad Black’s Hollinger enterprise.

CanWest did not disclose why the National Post was excluded from the trust.