rrsp

FORDING CANADIAN COAL TRUST $92.55 (Toronto symbol FDG.UN; SI Rating: Average) — recently accepted a cash-and- stock offer from Teck Cominco worth about $96 a unit. The deal should close in October, 2008. Note though that unlike most takeovers, Revenue Canada will treat the entire proceeds as ordinary income....

Is it a good time to bargain hunt for Canadian income trusts? According to one school of thought, Ottawa’s planned 2011 removal of income trusts’ tax advantages has unduly rattled investors and spurred unwarranted selling. That’s the kind of assumption that makes sense, but it’s unlikely to make you any money. Tax-law changes are a drawback for some investors in Canadian income trusts. But the key problem with income trusts is their general lack of investment quality....

Two of our long-time recommendations — Transalta Corp. $37 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 199.0 million; Market cap: $7.4 billion; SI Rating: Average) and...

BCE INC. $35.72 (Toronto symbol BCE; SI Rating: Above-Average) has deferred declaring its second-quarter quarter common share dividend of $0.365 a share. That will save the company $294 million. BCE feels that holding on to the cash will make the $42.75-a-share takeover price more attractive to the buyers. The buyers may wind up paying less for BCE in the wake of tighter bank lending and lower stock markets. But if the dividend deferral pushes up the ultimate price, and you hold your shares outside an RRSP, you will wind up better off — the tax rate on the capital gains you’ll realize on the takeover is less than the tax you would have paid on the dividend....

BCE INC. $35.15, Toronto symbol BCE, has deferred declaring its second quarter common share dividend of $0.365 a share. That will save the company $294 million. BCE feels holding on to the cash will help make the $42.75-a-share takeover price more attractive to the buyers. The buyers may wind up paying less for BCE in the wake of tighter bank lending and lower stock markets. But if the dividend deferral pushes up the ultimate price, and you hold your shares outside an RRSP, you will wind up better off — the tax rate on the capital gains you’ll realize on the takeover is less than the tax you would have paid on the dividend. BCE is still a buy....

FORT CHICAGO ENERGY TRUST $10.89 (Toronto symbol FCE.UN; SI Rating: Extra Risk) owns 50% of the Alliance Pipeline, a 36-inch diameter natural gas pipeline. It extends 3,000 kilometres from Fort St. John in B.C. to Chicago, Illinois. Enbridge Inc. owns the other 50% interest. The other assets held by the two partners are 85.4% of the Aux Sable natural gas liquids plant. Fort Chicago also owns the 1,324-kilometre Alberta Ethane Gathering System. Through recently acquired Countryside Power, Fort Chicago now also owns and operates energy systems in Charlottetown, PEI, and London, Ontario, plus two gas-fired cogeneration plants in California. In the three months ended December 31, 2007, Fort Chicago’s revenues rose 25.7%, to $173.3 million from $137.8 million a year earlier. Cash flow per unit rose 34.4% in the quarter, to $0.43 from $0.32....

Before letting any investment rule for tax shelters play a role in your retirement investing decisions, make sure it makes sense for you in today’s market. For instance, one long-standing retirement investing rule for tax shelters says you should hold fixed-return investments, like bonds, in your RRSP and hold stocks outside your RRSP. Its rationale is two-fold. First, bonds are safer than stocks because they guarantee repayment of principal....

IGM FINANCIAL INC. $51 (Toronto symbol IGM) reported $123.2 billion in assets under management at November 30, 2007, up 5.5% from $116.8 billion a year earlier. That’s good news, since IGM bases its fees on the value of its clients’ assets. IGM also sold $85.6 million worth of new mutual funds in November 2007, net of redemptions. Mutual fund sales should rise as the RRSP contribution deadline of February 29, 2008 approaches. Buy. MANITOBA TELECOM SERVICES INC. $45 (Toronto symbol MBT) may bid for new cellular phone frequencies that Ottawa plans to auction off later this year. To cut costs, Manitoba Tel would likely form a strategic partnership with another bidder or a foreign cell phone company. Meanwhile, the company predicted its earnings in 2008 would range from $2.95 a share to $3.15 per share. The stock trades at 14.8 times the midpoint of that range. Buy. MOLSON COORS CANADA INC. $53 (Toronto symbols TPX.A and TPX.B) currently distributes Corona and other beers made by Mexican brewer Grupo Modelo in Ontario, Quebec and Atlantic Canada. A new deal will expand Modelo’s brands to all of Canada. This will help Molson Coors profit from rising demand for premium imported beers. Buy.

BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $28.75 (Toronto symbol BA.UN: SI Rating: Above average) is the main provider of telephone services in Atlantic Canada. It also serves rural parts of Ontario and Quebec. As part of the deal that created Bell Aliant, the fund transferred the bulk of its wireless business to BCE. Without these operations, the fund now aims to spur growth by expanding the availability and capacity of its high-speed Internet service. Just 20% of Bell Aliant’s customers use its high-speed Internet service, so there’s plenty of room to grow. In the three months ended September 30, 2007, Bell Aliant earned $0.48 a unit from continuing operations in its second quarter. The fund took its present form on July 7, 2006, so it did not report earnings for the year-earlier quarter. But revenue on a pro forma basis, which assumes Bell Aliant began operations at the start of 2006, grew 1.6%, to $837.9 million from $825.1 million....

GREAT LAKES HYDRO INCOME FUND $20.30 (Toronto symbol GLH.UN; SI Rating: Extra Risk) owns 26 hydroelectric generating stations located on seven river systems in four distinct geographic regions: Quebec, Ontario, British Columbia and New England. Its facilities have 1,015 megawatts of generating capacity. In the three months ended March 31, 2007, Great Lakes’ revenues fell 1.2%, to $48.2 million from $48.8 million. Cash flow per share fell 3.8%, to $0.51 from $0.53. Power generation in British Columbia was lower due to an overhaul on an operating unit at the Lois facility. Total power generated was slightly lower than in the 2006 quarter, when water inflows were unusually strong....