Provide Fair Tax Treatment for Canadian International Business

The tax treatment of Canadian international business—and, specifically, interest payments on monies used by firms for foreign investments and acquisitions—is an important business issue that deserves public attention. This briefing argues that Canadian businesses need at least a level playing field for investment abroad if they are to take full advantage of global value chains and foreign affiliates and grow their business revenues based on outward foreign investment activity. At a time when Canada’s share of the global foreign direct investment market is slipping, warns The Conference Board of Canada, the elimination of interest deductibility on offshore investment would add a new barrier to international business growth and risk placing specific Canadian firms at a competitive disadvantage.