Canadian Tax Information

ARC Dividend Programs

ARC offers three dividend plans to its shareholders: cash dividends, Dividend Reinvestment Plan (“DRIP”), and Stock Dividend Program (“SDP”).  Absent any indication otherwise, ARC shareholders receive their dividends in cash.
Shareholders are advised to consult their tax advisors regarding questions relating to the tax treatment of ARC Resources dividends and the computation of the adjusted cost base of their investment.

Canadian Resident Individual Shareholders

The following outlines the general tax considerations that are expected to apply for a Canadian resident individual shareholder who holds their shares of ARC as capital property.

This summary is of a general nature only and is not intended to be nor should it be construed to be tax advice to any particular shareholder.  Shareholders are encouraged to consult their own tax advisors regarding the tax consequences to them of receiving cash or stock dividends.

Cash Dividends

  • The amount of any cash dividends will be included in computing income in the taxation year in which the cash dividend is received.
  • ARC Resources anticipates that its dividends will be “eligible dividends” and, as a result, subject to the enhanced dividend tax credit which is typically applied to dividends from most Canadian public companies.
  • The actual taxable amount of dividends will be communicated to shareholders on a T5 – Statement of Investment Income (“T5 slip”) on or before the last day of February following the year in which the dividends were paid.  Registered shareholders who receive the dividend from the transfer agent, Computershare Trust Company of Canada (“Computershare”) will receive a T5 slip directly from Computershare.  Beneficial owners will receive a T5 slip from their broker, investment dealer, financial institution, or other nominee as applicable.
  • Canadian resident individual shareholders who hold their ARC Resources common shares in a Registered Retirement Savings Plan (“RRSP”), Registered Pension Plan (“RPP”), Registered Retirement Income Fund (“RRIF”), Registered Education Savings Plan (“RESP”), Deferred Profit Sharing Plan (“DPSP”), Tax Free Savings Account (“TFSA”) or any other such registered plans need not report any income related to cash dividends on their income tax return.

Dividend Reinvestment Plan

  • All of the tax items noted under “Cash Dividends” also apply to Canadian resident individual shareholders who participate in the DRIP.  
  • The cash dividend is subsequently reinvested under the DRIP resulting in the shareholders acquiring new ARC Resources shares.  The cost of the new shares acquired under the DRIP is equal to the amount of the dividend.  The cost of the new shares acquired under the DRIP will generally be averaged with the adjusted cost base of all other ARC Resources shares held at that time (other than those held in a registered plan noted under “Cash Dividends”) for the purposes of determining the adjusted cost base of each share to the Canadian resident individual shareholder.

Stock Dividend Program

  • The amount of a stock dividend included in computing the income of a Canadian resident individual shareholder is equal to the amount that ARC Resources adds to its stated capital in respect of the shares that are issued in satisfaction of the dividend.  As ARC Resources intends to add only a nominal amount to its stated capital, the amount of the dividend included in computing the income of a Canadian resident individual shareholder is expected to be nominal.
  • The cost of the new shares acquired under the SDP is equal to the amount of the stock dividend.  The cost of the new shares acquired under the SDP will generally be averaged with the adjusted cost base of all other ARC Resources shares held at that time (other than those held in a registered plan noted under “Cash Dividends”) for the purposes of determining the adjusted cost base of each share to the Canadian resident individual shareholder.  Since the cost of the new shares acquired under the SDP is expected to be nominal, the receipt of shares as stock dividends may increase a capital gain (or decrease a capital loss) realized on a subsequent disposition of ARC Resources shares.
  • In general, the Canadian tax consequences associated with the SDP could be described as tax deferred, as a tax event occurs when the shares are sold rather than when the dividend is received.

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  • Historical Tax Data for ARC Energy Trust Cash Distributions

      Return of Capital (CDN$) Per Cent Income CDN$ (Taxable) Per Cent Total Cash Distributions (CDN$)
    2010 0.1800 15 1.0200 85 1.20
    2009 0.0384 3 1.2416 97 1.28
    2008 0.0534 2 2.6166 98 2.67
    2007 0.0720 3 2.3280 97 2.40
    2006 0.0520 2 2.5480 98 2.60
    2005 0.0388 2 1.9012 98 1.94
    2004 0.1080 6 1.6920 94 1.80
    2003 0.2670 15 1.5130 85 1.78
    2002 0.5056 32 1.0744 68 1.58
    2001 0.7712 32 1.6388 68 2.41
    2000 1.0230 55 0.8370 45 1.86
    1999 0.9900 79 0.2600 21 1.25
    1998 1.0800 90 0.1200 10 1.20
    1997 1.0890 78 0.3110 22 1.40
    1996 0.8100 100 0.81

     

  • Downloadable Tax Documentation

    [FILELISTING]

ARC Resources Ltd.

1200, 308 - 4th Avenue S.W. Calgary, Alberta, Canada T2P 0H7

Tel: 403-503-8600 Toll Free: 1-888-272-4900