Banking Industry Applauds Elimination of Canadian Withholding Tax in the Canada-U.S. Tax Treaty



    TORONTO, Sept. 21 /CNW/ - 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.





For further information:

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


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