Flaherty was a central figure in the debate surrounding the new proposed rules for taxation of Canadian income trusts. His announcement on October 31, 2006 of a rule change to tax income trusts levelled the playing field between forms of business such that businesses operating as income trusts no longer enjoyed a tax advantage over businesses operating as corporations. The announcement was accompanied by a further planned reduction in the corporate rate so that the two moves together were not expected to generate additional revenue for the government.