Q: The impending big ugly Republican bill is supposed to increase the witholding taxes for Canadians, on certain companies.
According to the Globe ("Trump’s new bill threatens major tax increases for Canadian companies", by Clare O’Hara and Rudy Mezzetta, May 22, 2025), this would include, "Canadian corporations that receive dividends from U.S. subsidiaries" and "Canadian individuals who own U.S. securities directly". This tax would rise to 50 percent from 5% and 15% respectively.
Though I do not depend on dividend income, I do own a couple of securities which I am wondering about:
Brookfield Corp: A company based in Canada but which is trying to become based in the US. Though this has a small USD yield, would it be affected?
Purpose US Cash High Interest ETF: This pays interest in USD on USD but is a Canadian company. Would this interest be affected by this bill?
Can you name some companies in particular that would be hit hard by this?
Lastly, I wonder if our pension plans, like CPP, HOOPP, etc would be affected significantly and how would they respond? Any insight on that?
Thanks as always.
According to the Globe ("Trump’s new bill threatens major tax increases for Canadian companies", by Clare O’Hara and Rudy Mezzetta, May 22, 2025), this would include, "Canadian corporations that receive dividends from U.S. subsidiaries" and "Canadian individuals who own U.S. securities directly". This tax would rise to 50 percent from 5% and 15% respectively.
Though I do not depend on dividend income, I do own a couple of securities which I am wondering about:
Brookfield Corp: A company based in Canada but which is trying to become based in the US. Though this has a small USD yield, would it be affected?
Purpose US Cash High Interest ETF: This pays interest in USD on USD but is a Canadian company. Would this interest be affected by this bill?
Can you name some companies in particular that would be hit hard by this?
Lastly, I wonder if our pension plans, like CPP, HOOPP, etc would be affected significantly and how would they respond? Any insight on that?
Thanks as always.
5i Research Answer:
BN could be impacted in terms of wire transfers and dividends flowing up to it from its...