Canadian Conservatives? -- Not Hardly
After 12 years of a Liberal Party government, Canadian voters got tired of government corruption scandals and voted the Liberals out in 2006.
But when Stephen Harper, the leader of the Conservative Party was sworn in as Canada's Prime Minister, he knew that Canadians didn't really vote for his Conservatives, but against the Liberals.
The Conservatives didn't win even a single seat in the country's three major urban centers, Montreal, Toronto or Vancouver. In fact, the Conservatives only won 36% of the overall vote. The Liberals and the National Democratic Party (also a left-leaning party) actually won a combined 47.9% of the vote. But instead of facing another immediate election, the Conservatives formed a minority government.
Now this "conservative" government has pushed a radical tax proposal through the government. It's known as "Bill C-10." This new proposal would impose new tax rules for investments in "non-resident trusts." The bill has passed the House of Commons and is currently before the Senate. Usually, the Senate rubber stamps tax bills, but the senators are hesitant about this particular tax bill.
Pierre Lemieux, economist, author and professor at the Université du Québec en Outaouais (Canada), and a member of the Sovereign Society Council of Experts, says the legislation "...doesn't surprise me. What the Conservative government has been generally doing over the past two years is, first, to keep all the laws and regulations adopted by the former [Liberal] government on the books and, second, to add its own layer of new regulations and controls."
But this proposal would go a long way towards radicalizing Canada's tax system. The government has argued they need to pass this bill to curb offshore tax evasion.
Canadian taxes, up until now, are largely "territorial." That means Canada only taxes individuals on earnings they make from within the country, not on offshore income.
Although residents get hit with stiff taxes, Canada does not tax individuals who live outside the country on their worldwide income like the U.S. does. Canada taxes only the worldwide income of its resident citizens and resident aliens who live in Canada at any time during the calendar year. "Residents," by law, include individuals, corporations and trusts located in Canada.
One of the basic concepts in Bill C-10 is virtually unseen in any other country. The bill states that Canada will tax all of a foreign trust's income if a Canadian person has transferred any amount of money to that trust. That trust doesn't have to have any other connection to Canada. This potentially could turn any U.S. trust (including a U.S. business trust) into a Canadian taxpayer.
Separately, there has been a concerted outcry, that this rule can tax a Canadian who has a mere remote possibility of benefiting from a trust established and entirely funded by a foreign-based family. In other words, someone else set up a trust for a Canadian, but the Canadian will still be taxed.
After 12 years of a Liberal Party government, Canadian voters got tired of government corruption scandals and voted the Liberals out in 2006.
But when Stephen Harper, the leader of the Conservative Party was sworn in as Canada's Prime Minister, he knew that Canadians didn't really vote for his Conservatives, but against the Liberals.
The Conservatives didn't win even a single seat in the country's three major urban centers, Montreal, Toronto or Vancouver. In fact, the Conservatives only won 36% of the overall vote. The Liberals and the National Democratic Party (also a left-leaning party) actually won a combined 47.9% of the vote. But instead of facing another immediate election, the Conservatives formed a minority government.
Now this "conservative" government has pushed a radical tax proposal through the government. It's known as "Bill C-10." This new proposal would impose new tax rules for investments in "non-resident trusts." The bill has passed the House of Commons and is currently before the Senate. Usually, the Senate rubber stamps tax bills, but the senators are hesitant about this particular tax bill.
Pierre Lemieux, economist, author and professor at the Université du Québec en Outaouais (Canada), and a member of the Sovereign Society Council of Experts, says the legislation "...doesn't surprise me. What the Conservative government has been generally doing over the past two years is, first, to keep all the laws and regulations adopted by the former [Liberal] government on the books and, second, to add its own layer of new regulations and controls."
But this proposal would go a long way towards radicalizing Canada's tax system. The government has argued they need to pass this bill to curb offshore tax evasion.
Canadian taxes, up until now, are largely "territorial." That means Canada only taxes individuals on earnings they make from within the country, not on offshore income.
Although residents get hit with stiff taxes, Canada does not tax individuals who live outside the country on their worldwide income like the U.S. does. Canada taxes only the worldwide income of its resident citizens and resident aliens who live in Canada at any time during the calendar year. "Residents," by law, include individuals, corporations and trusts located in Canada.
One of the basic concepts in Bill C-10 is virtually unseen in any other country. The bill states that Canada will tax all of a foreign trust's income if a Canadian person has transferred any amount of money to that trust. That trust doesn't have to have any other connection to Canada. This potentially could turn any U.S. trust (including a U.S. business trust) into a Canadian taxpayer.
Separately, there has been a concerted outcry, that this rule can tax a Canadian who has a mere remote possibility of benefiting from a trust established and entirely funded by a foreign-based family. In other words, someone else set up a trust for a Canadian, but the Canadian will still be taxed.
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