Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
2001-006524
M2001-00070
February 7, 2001
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable Martin Cauchon, Minister of National Revenue, has asked me to reply to your correspondence addressed to the Honourable Paul Martin, Minister of Finance, concerning the taxation of foreign investment entities. Mr. Martin sent Mr. Cauchon a copy of your correspondence on December 21, 2000.
A review of the legislative proposals on the taxation of foreign investment entities, released by the Department of Finance on June 22, 2000, indicates that those proposals may apply to Canadian investors who hold interests in the foreign exchange traded funds referred to in your letter. However, as you are aware, the Department of Finance announced on September 7, 2000, that there would be certain changes to the proposals, and invited further public comments. It is my understanding that the Department of Finance is considering the appropriateness of applying the proposals to investments in certain foreign-based funds, particularly those in the United States. It would be premature for me to comment further until the Department of Finance has completed its reconsideration of the scope of the proposals.
I trust I have addressed your concerns on this matter.
Yours sincerely,
Bill McCloskey Assistant Commissioner Policy and Legislation Branch