Banking industry applauds elimination of Canadian Withholding Tax in the Canada-U.S. Treaty

For Immediate Release
September 21, 2007

TORONTO – Nancy Hughes Anthony, President and CEO of the Canadian Bankers Association, today applauds the federal government for keeping its 2007 federal budget promise to eliminate the withholding tax as outlined in the updated Canada-U.S. Tax Treaty.

“This tax was a barrier to the free flow of capital between the two countries and impeded the efficient functioning of capital markets,” said Ms. Hughes Anthony. “The elimination of this tax will result in increased investment and a reduced cost of capital.”

Canadian Finance Minister Jim Flaherty and U.S. Treasury Secretary Henry M. Paulson, Jr. signed the update to the Canada-U.S. Tax Treaty this morning following a meeting in Chelsea, Quebec. The fifth update to the treaty eliminates withholding taxes on cross-border interest payments.

“The banking industry has been advocating for years for these changes,” said Ms. Hughes Anthony. “This is a very positive step in the government’s efforts to simplify the Canadian tax system and give Canada a more competitive tax environment.”

The Canadian Bankers Association works on behalf of 54 domestic chartered banks, foreign bank subsidiaries and foreign bank branches operating in Canada and their 249,000 employees to advocate for efficient and effective public policies governing banks and to promote an understanding of the banking industry and its importance to Canadians and the Canadian economy.

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For more information:
Maura Drew-Lytle, Canadian Bankers Association
Tel: (416) 362-6093, ext. 338
Cell: (416) 918-2777
E-mail: mdrewlytle@cba.ca