Business Leaders Urge Quick Adoption of International Tax Panel Recommendations

December 10, 2008

Today’s recommendations by the Advisory Panel on Canada’s System of International Taxation would simplify Canadian tax rules and make the country a more attractive base for global enterprises, says the Canadian Council of Chief Executives (CCCE).

“The Panel has offered a thoughtful package of pragmatic and balanced recommendations that would help Canadian enterprises to grow globally without any net cost to taxpayers,” said CCCE Chief Executive and President Thomas d’Aquino.  “Improving our international tax system is essential to move Canada successfully through the current economic crisis, and should be addressed in the next federal budget.”

Mr. d’Aquino welcomed in particular the recommendations to broaden the current exemption approach to cover all foreign active business income and to repeal the provision introduced in 2007 that eliminated the deductibility of interest on money borrowed in Canada for investment in foreign affiliates.

“The global crisis in financial markets has made it harder for companies everywhere to raise money,” Mr. d’Aquino said.  “As the Panel points out, this is the wrong time for rules that restrict the ability of Canadian companies to raise capital, especially when the tax rules in competing countries support the deductibility of interest for investments abroad.”

The CCCE is an association of chief executive officers and entrepreneurs committed to the shaping of sound public policy in Canada, North America and the world. CCCE members lead companies that collectively administer $3.5 trillion in assets, have annual revenues of more than $800 billion, and are responsible for the vast majority of Canada’s exports, investment, research and development, and training.

In addition to Mr. d’Aquino, the members of the CCCE’s Executive Committee are: Chair, Gordon M. Nixon, President and Chief Executive Officer, Royal Bank of Canada; Honorary Chair Richard L. George, President and Chief Executive Officer of Suncor Energy Inc.; and Vice Chairs Dominic D’Alessandro, Paul Desmarais, Jr., Jacques Lamarre, Hartley T. Richardson and Annette Verschuren, the chief executives respectively of Manulife Financial, Power Corporation of Canada, SNC-Lavalin Group Inc., James Richardson & Sons, Limited and The Home Depot Canada and Asia.