Yes, sure.
Unlike other income trusts in Canada, REITs enjoy preferential tax treatment provided by the Income Tax Act that exempts them from paying any tax at the corporate level or at the entity level. Recognizing a loss in tax money due to the way that income trusts were taxed at the time, in 2006 the Minister of Finance announced specified investment flow-through trusts—SIFTs—and rules introducing those at the entity tax level on publicly traded income trusts and partnerships.
However, when these rules were introduced, they provided an exemption for REITs by mentioning that a specified investment flow-through trust—a SIFT—is one, other than real estate investment trusts for a tax year, that can be included. That's basically how real estate investment trusts are able to get around the tax loophole.
If you have any other questions and want more detail, ACORN is happy to provide the research we have done on REITs with the Canadians for Tax Fairness. We can submit that to you.