Canadian royalty trusts (CanRoys), which typically own oil and natural gas wells, have provided investors with high yields for years.

You see, these trusts avoid taxation at the corporate level provided they pay the bulk of their income to unitholders. The Canadian government created this incentive to encourage investment in the country’s energy infrastructure.

For much of the last decade energy prices soared and so did earnings and dividends from the royalty trusts. Then came October 31, 2006… known among trust investors as “The Halloween Massacre.”

On that date, the Canadian government announced plans to end favorable taxation of these trusts as of December 31, 2010. When these tax changes take hold, much of what was paid to investors as dividends will instead go to the Canadian government.

But here’s the million dollar question. If money seeking high income in Canada leaves these trusts, where will it go? I’ve got one strong possibility: Canadian real estate investment trusts (currency has many Canadian REITs looking to take advantage of the opportunity. As one CEO said, “We intend […] to take advantage of what we believe is a once-in-a-decade opportunity to buy quality properties.”

So how can you get in on the action? Canadian REITs trade primarily on Canadian exchanges. But buying Canadian securities isn’t as exotic as it sounds. Just about any brokerage offers access to these exchanges. And if you’re looking for Canadian REITs to investigate, I uncovered this list a little bit ago that is a useful place for retail investors to start their hunt.

P.S. — How big is the opportunity in Canadian REITs? Well, my colleague Carla Pasternak just uncovered one promising REIT in her November issue of High-Yield International. This gem yields 7.5% and just made its first foray into the U.S. market. To read Carla’s full profile of this company, you’ll need to be a subscriber. Follow this link to learn more.