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FAQs
Based on discussions with our investors and other members of the investment community, the following represent their most frequently asked questions together with responses by Enbridge. Monthly Distributions
Unitholder Information
Tax Information
Governance
Monthly DistributionsWhat is the distribution policy of the Fund?The Fund's policy will be to distribute approximately 95% of cash available for distribution on average over a 5-year rolling period. Distributions will be made monthly to unitholders of record as of the last business day of each month, and are expected to be paid to unitholders on or about the 15th day of the following month. What is the amount of the distributions?The current and most recent monthly distributions applicable to ordinary units have been charted in the Distribution History section of the website. Does the Fund offer a Distribution Reinvestment Plan ("DRIP")?Yes. On June 21, 2004, the Fund announced the implementation of the DRIP. The DRIP enables holders of ordinary trust units who are resident in Canada to elect to have all cash distributions from the Fund automatically reinvested in additional ordinary trust units. Unitholder InformationAre the ordinary units publicly traded?Yes. They began trading under the trading symbol ENF.UN on the Toronto Stock Exchange on June 30, 2003. Are the ordinary units eligible for holding in RRSPs?Yes. Ordinary units will be qualified investments for registered retirement savings plans, registered retirement income funds, deferred profit sharing plans, and registered education savings plans. Can investors other than Canadian citizens purchase units?Yes. However, in order for the Fund to maintain its status as a mutual fund trust under the Tax Act, at no time may non-residents of Canada be the beneficial owners of more than 49% of the ordinary units. Tax InformationWhat is the tax treatment for the ordinary units?Each holder of ordinary units resident in Canada will be required to include in computing income for tax purposes for a particular taxation year the portion of the net income of the Fund that is paid or payable in that year by the Fund to unitholders and that is deducted by the Fund in computing its income. Generally, all other amounts received by a holder of ordinary units will not be included in such holder's income for income tax purposes, but will reduce the adjusted cost base of such holder's ordinary units. A unitholder will receive a "T3 Supplementary" slip from either his/her broker. This slip will indicate the taxable and return of capital components of the distributions. The Canada Customs and Revenue Agency requires that T3 Supplementary (PDF - 10KB) slips be mailed out by March 31 of the year following the calendar year being reported on. See tax information page. Unitholders and prospective purchasers should consult their tax advisors regarding the tax implications of an investment in the Fund's ordinary units. How will the proposed Government of Canada income trust tax changes affect the Enbridge Income Fund?On October 31, 2006, the Government of Canada announced proposed changes to the taxation of income trusts. Under the proposed rules, the taxable portion of an income trust's distribution would be subject to tax similar to the treatment of taxable income within a corporation. Existing trusts would not be subject to the new tax regime until 2011 as long as they limit their expansion to "normal growth" prior ot that year. During the four-year period prior to 2011, a trust would be able to issue equity to finance growth in an amount not to exceed the October 31, 2006 value of its equity market capitalization (subject to annual limits). On December 21, 2006, the Government released draft legislation for comment. The timing for enactment of the proposed legislation by Parliament is uncertain. These developments have resulted in considerable uncertainty in the capital markets regarding the trust sector. Like all other income trusts, our market valuation has been adversely affected. We are continuing to monitor the proposed legislation and its potential impact on the business and financial outlook of the Fund with a view to developing strategies that will mitigate the impact of the proposed legislation on value to our unitholders going forward. At the same time, we will also continue to focus on maximizing the cash flow, firstly by ensuring existing operations are optimized, and secondly through continuing to pursue near-term organic opportunities, which we believe can be readily executed within the limitations imposed by the proposed new tax rules. GovernanceDoes Enbridge Income Fund have procedures for the receipt, retention and treatment of complaints about the Fund's accounting, internal auditing controls, or auditing matters?Yes, these documents are in the Fund's Whistleblower Policy (PDF - 85KB) in the Governance section of the website. Does the Enbridge Income Fund hold an annual meeting for unitholders?There will be an annual meeting of unitholders immediately prior to and at the same place as each annual meeting of holders of Enbridge Commercial Trust units. Special meetings of unitholders may be convened at any time and for any purpose by the Fund Trustee, the Manager or the ECT Trustees. Unitholders may attend and vote at all meetings for unitholders, either in person or by proxy. The 2007 annual meeting of unitholders will be held on April 30, 2007, in the Manitoba Room at the Westin Hotel, 10135 - 100 Street, Edmonton, Alberta. Will unitholders receive financial reports?Yes. The Fund will furnish to unitholders, in accordance with and subject to applicable securities laws, consolidated financial statements of the Fund (including quarterly and annual consolidated financial statements) and other reports as are from time to time required by applicable law. |
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