Contransformed: carrier reverts to ‘corporate’ status

WOODSTOCK, Ont. — Contrans Income Fund is no more. On Tuesday, the 12th biggest carrier in the country (and one of the last public income trust holdouts) officially changed from an income trust to a corporate entity.

The conversion comes three months after Transcom’s Chairman and CEO Stan Dunford surprised the industry with his announcement that he would be converting the company to corporate status.

Dunford was among trucking’s last adherents to the income-trust model and one of the most vociferous opponents to the legislation introduced three years ago that stripped income trusts of their unique tax status.

Starting next year, income trusts will be subject to standard taxation. In 2006, when the federal government announced the game-changing legislation the trusts were given a rollover period during which they could convert without penalty.

That get-out-of-jail-free period is drawing to a close.

Contrans hung on to its income-trust status longer than most other carriers. TransForce, Mullen and Andlauer made the switch before Contrans, and Dunford stuck to his word, right up until this past August, which is when he announced his decision.
 

"Operating under a corporate structure will provide us with additional financial flexibility regarding the growth and retention of capital and better position Contrans to facilitate its future growth plans," he says.

For the trucks, though, it’s business as usual.