Royalty trusts are found mainly in
Canada and the
United States; there is also one in Germany. Canadian royalty trusts, called "Canroys" or "CanRoys", typically trade on the
Toronto Stock Exchange, while some of the larger trusts also trade on the
New York Stock Exchange. Canroys usually offer higher yields than U.S. trusts; for non-Canadian investors, this higher yield is reduced by the 15% foreign tax withholding that is absent in the U.S. trusts. The most significant difference between Canadian and U.S. royalty trusts involves their legal status in their respective countries. In the U.S., trusts are not allowed to acquire additional properties, once they are formed. Since they are restricted to their original properties – for example, a group of oil fields or natural-gas-bearing rock formations—they can be expected to be depleted over time, the royalties they pay out will correspondingly decline, and eventually the trust will be dissolved. In Canada, trusts may be actively managed, and run as businesses. They may have employees, issue new shares, borrow money, acquire additional properties, and may manage the resources themselves. According to a 2012 article in
Canadian Energy Law, Richardson argued that by 2012
foreign asset income trusts (FAITs) had revived interest regarding income trusts in Canada. Under Prime Minister
Stephen Harper — who was sworn into office 6 February 2006 after winning against the incumbent
Paul Martin — the Canadian federal government announced the elimination of the loophole that placed over 250 income trusts at a tax advantage over other corporations. Starting in 2011 "income trusts, with the exception of those focused on real estate, would be subject to a tax on trust distributions" Flaherty described the conversion of corporations into royalty trusts as "a growing trend to corporate tax avoidance" which was hurting the Canadian economy and defended his response as "measured". In an interview in January, 2013 Matt Donohue, an analyst at UBS AG in Calgary, argued that the growth-and-income model was "bruised" not "broken" with income trusts converting back into a corporate structure. With the increased use of
horizontal drilling in the energy industry, energy trust adopt a hybrid policy that promised both "per-share growth and sustainable income for their shareholders". approximately 90% of Canadian Royalty Trusts (CANROY's) have either converted to corporations, merged with other companies, or simply liquidated. While the Tax Fairness Plan did not require a conversion to corporate status most companies found it beneficial to do so. After conversion most companies were required to slash their dividend payouts to reflect the new level of taxation they would be required to pay. ==Publicly traded royalty trusts==