I'm aware of the situation with our Canadian stocks in response to the proposal by the Canadian finance minister to tax income trusts more like large corporations.

Jim Flaherty, the finance minister, said existing trusts would pay taxes in four years' time, but companies that convert to the trust structure after Wednesday would start being taxed in 2007.

Bear in mind that the finance minister is a member of the minority party and it was less than six months ago that investors were assured by the Canadian government that income trusts would be exempt from any new tax policies. So obviously, this is a complete surprise.

This is not law, yet, and Flaherty must still submit a bill and get it passed.

The whole Canadian income trust sector is getting hit as if these big dividends are going to get cut in half.

I'm contacting the management of several of our hardest-hit holdings and will update you with further details and facts as quickly as I gather them -- no later than the Friday update.

Hold your Canadian stocks. This is unwarranted panic-selling that is occurring.

And finally, keep in mind that these are excellent, solid Canadian businesses that we own with strong fundamentals.

Bryan Perry

Editor The 25% Cash Machine