TEI comments on Canadian back-to-back loan proposals.

• Position: Tax Executives Institute

On September 26,2014, TEI President Mark C, Silbiger submitted a letter to the Canadian Department of Finance setting forth the Institute's recommended revisions to August 29, 2014, draft legislation that will restrict back-to-back loans made through intermediaries. The comments were prepared under the aegis of TEI's Canadian Income Tax Committee, whose chair is Grant L. Lee of HSBC Bank Canada. Contributing substantially to the development of TEI's comments was Jason Vincze of General Electric Canada. Also contributing to the comments were Giovanna Baragetti of Hydro-One Networks, Inc.; Kurtis L. Bond of ConocoPhillips Canada; Lynn Moen of Walton Global Investments, Ltd.; Caroline Morin of Spectra Energy Corporation; and Carolyn Mulder of Wal-Mart Canada, Corp. Jeffery P. Rasmussen of the Institute's legal staff coordinated the preparation of the comments.

On August 29, 2014, the Government released draft legislative proposals and explanatory notes in respect of numerous measures announced in the 2014 Budget Message. On behalf of Tax Executives Institute (TEI), I am writing to express our comments and concerns about the revised proposals relating to back-to-back loan arrangements through intermediaries (hereinafter "the Proposals").

Background on Tax Executives Institute

TEI is the preeminent international association of business tax executives. The Institute's more than 7,000 professionals manage the tax affairs of nearly 3,000 of the leading global companies. Canadians constitute approximately 15 percent of TEI's membership, with our Canadian members belonging to chapters in Calgary, Montreal, Toronto, and Vancouver. TEI members must contend daily with the planning and compliance aspects of Canada's business tax laws, including its treaties. Many of our non-Canadian members work for companies with substantial activities and investments in Canada. The comments set forth in this letter reflect the views of TEI as a whole, but more particularly those of our Canadian constituency.

TEI concerns itself with important issues of tax policy and administration and is dedicated to working with government agencies to reduce the costs and burdens of tax compliance and administration to our common benefit. In furtherance of this goal, TEI supports efforts to improve the tax laws and their administration at all levels of government. We believe that the diversity, professional training, and global viewpoint of our members enable us to bring a balanced and practical perspective to the issues raised by the Proposals.

Legislative Consultation Background

In our April 10,2014, comments on the 2014 Budget Message, we observed that...