Bill S-2 · 39th Parliament · Stephen Harper
An Act to amend the Canada-United States Tax Convention Act, 1984
Government bill. Became law.
- IntroducedOct. 17, 2007
- Debated in principleNov. 12, 2007
- Studied by a committeeDone
- Passed its first chamberNov. 20, 2007
- Passed the second chamberDec. 13, 2007
- Became lawDec. 14, 2007
Leading supporters
Ranked by the part each played: who is responsible for the bill, who carried it, and who spoke for it most.
- Stephen HarperPrime Minister
- David AngusSenate · Sponsor in the Senate
- Ted Menziesbacks the bill to complete ratification of the updated treaty
- Massimo Pacettibacks updating tax conventions regularly
- W. David AngusSenate · SenatorThe bill implements a treaty that strengthens economic cooperation and facilitates cross-border trade after a decade of negotiations.
- Claude Bachandbacks provisions that avoid undue penalties and ensure fairness
- John McCallumStates the Liberal Party will support the bill due to its content.
Who carries this bill
Arrows run from the person responsible to those who answer to them on this bill. The critic leads the Senate’s scrutiny and answers to no one on it.
What it set out to do
On 18 October 2007, the Leader of the Government in the Senate introduced Bill S-2, An Act to amend the Canada-United States Tax Convention Act, 1984, in the Senate and it was given first reading. Bill S-2 amends the Canada-United States Tax Convention Act, 1984 to implement a Protocol that amends the Convention between Canada and the United States of America with Respect to Taxes on Income and on Capital and adds Annexes A and B to it. The major change contained in the Protocol is the elimination of all withholding tax on cross-border payments of interest. The elimination is immediate for arm’s length payments of interest and phased in over three years for non-arm’s length payments. Other changes to the Convention include new rules for the treatment of “limited liability companies” (LLCs), pensions, stock options, corporate continuances and taxpayers who change residence from one country to the other. Annex A to the Convention clarifies the interpretation of a number of provisions of the Convention. Annex B to the Convention provides for a binding arbitration procedure.
Summary by the Library of Parliament.
Where members stand
How it changed on the way
1% of the text as introduced was changed or removed by the time it became law (19,408 words introduced, 19,396 passed).
How precisely it is written
mostly preciseChallenging the law: HardDisputing a charge: Moderate
The bill uses many defined terms and numeric thresholds to set clear tax rules. Some phrases still leave room for officials to decide what counts as necessary or effective.
Open to argument
“as necessary to more effectively implement the intent of paragraph 6 of Article XXVI to eliminate double taxation”
Subjective test of what is necessary or effective invites argument over scope.“a distribution from a pension or retirement plan that is reasonably attributable to a contribution or benefit”
Relies on a reasonableness judgment rather than an objective formula.
Clear-cut
“In this Act, "Convention" means the Convention between the Government of Canada and the Government of the United States set out in Schedule I, as amended by the Protocols set out in Schedules II, III, IV, V and VI.”
Single defined term points directly to fixed schedules.“owning at least 10 percent of the voting stock”
Numeric threshold creates a bright-line test.“annuation, pension or other retirement arrangement, Armed Forces retirement pay, war veterans pensions and allowances and amounts paid under a sickness, accident or disability plan, but does not include payments under an income-averaging annuity contract”
Exhaustive list of inclusions and exclusions removes ambiguity.
Discretion. Competent authorities may modify or supplement rules and procedures, and arbitration boards may adopt any procedures not inconsistent with the Article, giving officials latitude to adjust details.
Challenging the law itself. The text contains no obvious vagueness or overbreadth that would engage section 7 Charter liberty interests or other rights.
Disputing a charge under it. Specific definitions and numeric tests make most breaches straightforward to prove, but phrases such as 'reasonably attributable' allow factual disputes.
Read by a language model from the royal assent text; every quoted phrase appears in the bill. A reading of the drafting, not legal advice.
Did it work?
no evaluation found
Who lobbied on it
No lobbying registration naming this bill is loaded.
Stages and dates from LEGISinfo.