Today, despite a massive effort by Alberta to actually cut taxes on drilling, by some estimates drilling activity is 70 percent off last year’s levels in Canada and more than 50 percent in the US.

With less than 18 months to go until Jan. 1, 2011, the prospective trust tax is less of a risk than ever to investor returns. In fact, it’s shaping up as a bullish event, even a potential windfall.

What September’s High Yield of the Month picks have in common: high yields well protected by strong cash flows, solid balance sheets and skilled management teams.

No matter what happens in Canadian politics, however, investor returns will still depend mainly on the health of underlying businesses. The good news: The future still looks bright for well-run Canadian trusts and high-yielding corporations.

Four Canadian trusts cut distributions last month. Each owed its fate to lower demand from North American consumers, which has constricted cash flow at its business.

Canadian Edge Portfolio picks are up an average of 34.3 percent thus far in 2009. That’s against a 17 percent gain for the broad-based S&P/Toronto Stock Exchange Income Trust Index.

The ability to maintain distributions after converting to a corporation is the ultimate test of strength for a trust’s underlying business. Only the exceptional have thus far been able to accomplish the feat.

Over the past several months I’ve focused the High Yield of the Month column almost exclusively on trusts and corporations operating in recession-resistant industries. One of this month’s picks takes us a little further out on the risk spectrum for the first time in a while.

Three Canadian trusts cut distributions last month. Unlike last month’s cutters, however, their moves did have a hugely negative impact on share prices, as they indicated much greater business weakness than investors had expected.