Finance committee  In Canada, as a consequence of the changes being packed in around it, yes, we believe that's the case.

Finance committee  One that I would speak to we've already referenced, but it's an important one that bears repeating. That's in relation to exchange of information. We've had exchange of information provisions in our treaties for a very, very long time, but they were only on request and they were not covering some of the often-labelled offshore financial centres.

Finance committee  I'll say first of all that the privacy and security of tax information is paramount to us and to other countries. It would undercut the benefits or the utility of a self-assessment system, even domestically, if taxpayers couldn't be assured of the security of their information. It's perhaps doubly important, I suppose, when we're sharing information with other jurisdictions.

Finance committee  Let me start, but I may well want to defer to my colleague. The general answer is that Canada is a member of the OECD and seeks to follow the OECD model. That's essentially the template or text of the OECD model tax convention. It's not that we follow in every respect the tax rates that apply under the OECD model.

Finance committee  You've read my mind, Chair. The situation with a convention or an agreement is very straightforward. It's an agreement between sovereign states whereby both countries, as countries, are committed internationally to the agreement. Our infrastructure, if you will, and our tax laws are all built around that.

Finance committee  Well, without trying to quantify it, but speaking to it at a higher level, I think that, yes, it is the case that both Canada and Taiwan or Israel.... Let me simplify my response by just talking about Canada. Canada benefits from being able to invest in the other place with a lower withholding tax or other taxes applying, with greater certainty as to when taxes apply.

Finance committee  In point of fact, Canada doesn't tax on the basis of citizenship. Again, I seem to be picking on the United States, but it's the only country that actually taxes—with a possible footnote for Eritrea—on a citizenship basis. We tax on a residence basis. It's true that we try in our tax treaties to have a provision to make sure that in the case where two jurisdictions both claim a taxpayer as resident there are rules to resolve that, to figure out in which of the two countries or jurisdictions the person truly is resident.

Finance committee  We don't have an analysis of the trade impact. You can't assess, or at least I'm not aware of how one would be able to assess, the reaction of investors to putting in a lower tax regime. We think we can say with some confidence that it would be positive, but we aren't able to quantify it beyond that.

Finance committee  Thank you for the question. We do have a tax treaty with Barbados, as do many other countries. In fact, Barbados is one of the countries with which we have a long-standing relationship inasmuch as it was covered by the first treaty we had with the U.K. until Barbados acquired their own sovereignty.

Finance committee  Thank you for the question. To our knowledge, at least, there's no necessary connection between this and the trans-Pacific partnership. This stands on its own as an agreement in relation to taxation. Other trade agreements could have consequences, but as I say, there's no linkage between the two, one way or the other.

Finance committee  Again, if I could call it a legal matter, the scope of the arrangement with Taiwan is limited to Taiwan. In terms of whether or not there's any sort of indirect effect, such as a choice of investment in Canada over a choice of investment someplace else because of the existence of this arrangement, I hope that happens.

Finance committee  I confess to not knowing what, if any, other trade arrangements we have between Canada and Israel and whether they've been in place since before 1975 or since, or have been in place since before 1975 and changed since. This is really focused, again, as with Taiwan, on the tax arrangements or tax agreement between Canada and Israel.

Finance committee  In terms of the agreements, if we're speaking of the arrangement with Taiwan, that's with respect to Taiwan itself. It does not have application to Japan, China, or any other country, for that matter. The question would be measuring the effects in Canada and in Taiwan in terms of having the arrangement between the two jurisdictions.

Finance committee  Thank your for the question. I'll offer a couple of observations, and then I'll turn to my colleague to see if she wants to add any more. There are a number of different considerations, but most of them are economic-based—that is, the level of investment between Canada and another country is probably the primary driver of whether to have a treaty or not.

Finance committee  Yes, thank you, Chair. My name is Brian Ernewein. I am the General Director of the Tax Policy Branch at the Department of Finance. I am joined by Stephanie Smith, who is the Chief Tax Treaty Negotiator with the Department of Finance, and Trevor McGowan, who is the Chair of our Legislative Drafting Unit.