The attention will be focused on the government's tax announcement for a while to come, but we shouldn't forget that there are other things to think about with regard to the income trust market. The tax changes have certainly shaken the euphoria out of the market, and valuations (relative to corporations) are coming down to earth. But what about the biggest risk trust holders always face - that the business fundamentals take a turn for the worse.

As I keep reminding people, we've been riding a wave in Canada. Everything is going well - really well. But trust holders have to remember that they are owners in the companies they hold and owners get paid out of profits after all the other bills are paid. Sometime in the future we have to expect that a weaker economy will reduce those profits and require an overall reduction in trust distributions.

There are lots of scenarios coming at us over the next few years. Some companies will skate right through and continue to provide their shareholders with a steady income. In other cases, however, a weaker economy will push mature businesses, of which there are many in trust land, into a more rapid decline. In those cases, distributions may be permanently cut. Cyclical businesses, by definition, will go through a period where profits disappear and perhaps even turn into losses. And a slower economy will undoubtedly expose some companies that have just plain stretched too far to maintain or increase distributions.

Just to be clear: the government's change has forever changed the income trust landscape. But the biggest risk shareholders have, and will always have, is profit shortfalls. The Canadian income trust has yet to be seriously tested on this front.