On September 13, 2012, the Joint Committee (of the CBA and CICA) submitted a host of technical concerns with the proposed new rules relating to “foreign affiliate dumping”. Broadly, these new rules target any investments in a foreign affiliate made by any Canadian company that is, itself, controlled by a foreign corporation (such structures are common among foreign multinational corporations). The Joint Committee further reiterated their larger concern (shared by many) that these new rules curtail both “debt dumping” and “surplus stripping” in one package. Instead, a separate set of focused rules – to implement legitimate policy concerns in each of these areas – would greatly reduce the inappropriate results currently seen in the proposals. Finally, the Joint Committee stressed that further study is warranted to examine whether legitimate policy concerns can be met without adversely (and inappropriately) impacting the broader Canadian economy.
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Joint Committee submits further report to finance on FA dumping proposals
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