Historically, Canadian investors in U.S. partnerships benefitted from an extremely efficient income tax structure – i.e., a single level of tax, credit against Canadian taxes for taxes paid in the U.S., and an ability to qualify for Treaty benefits. Unfortunately, as a result of a recent development, Canadian investors will no longer benefit from these efficiencies with respect to their investments in U.S. LLPs and LLLPs. Instead, those investors will be treated, for Canadian tax purposes, as investing in a U.S. corporation – resulting in multiple levels of tax, the possibility that Canada will not grant foreign tax credits (“FTCs”) for taxes paid in the U.S., and the further possibility that Canadian investors will not be able to avail themselves of the benefits under the Treaty. Fortunately, as discussed below, many Canadian investors may restructure their U.S. investments so that they are not adversely affected by this recent development.