will be grossed-up by 45%, meaning that the shareholder includes 145% of the dividend amount in income. The DTC in respect of eligible dividends will be 19%, based on the 2010 federal corporate tax rate as proposed in the 2005 federal budget. The existing gross-up and tax credit will continue to apply to other dividends." The markets rallied in the hours leading to the announcement (the government denied any leaks, see below) and on the following days as well, sending the S&P/TSX Composite Index to a new five-year high. The day's biggest gainers were income trusts, income-trust candidates, high dividend-paying companies, and the TSX Group itself. Former trust candidates such as Air Canada Jazz announced that they were considering a trust conversion or spinoff once again. The decision, while applauded by financial circles, was widely seen as confused and hurried (an earlier government statement on the same day had mistakenly suggested a slight tax on the trusts). The Liberal government had come under fire for the very strong stock market rally that immediately preceded the announcement, suggesting leaks from government insiders to financial circles. Opposition parties requested an official investigation on insider trading activity on that day. The Ontario Securities Commission has rejected the suggestion, saying it amounted to political interference; however, the Royal Canadian Mounted Police launched an inquiry on December 28, 2005. On February 15, 2007, the RCMP announced the conclusion of the income trust investigation and laid a charge of 'Breach of Trust' against Serge Nadeau, an official in the Department of Finance. Finance Minister Goodale was cleared of any wrongdoing. New rules Following announcements by telecommunications giants Telus and Bell Canada Enterprises of their intentions to convert to income trusts, on October 31, 2006, Finance Minister Jim Flaherty proposed new rules that would end the tax benefits of the income trust structure for most trusts. The new rules broke the Conservative Party's election promise to avoid taxing income trusts. Brent Fullard of the Canadian Association of Income Trust Investors pointed out that at the time of the announcement Telus and Bell Canada Enterprises did not pay any corporate taxes nor would they for several years. According to his analysis, had Bell Canada Enterprises converted to a trust it would have paid $2.6 to 3.17 billion in the next four years versus no taxes as a corporation. Subsequent to the October 31 announcement by Flaherty, the TSX