Every day, it seems, Finance Minister Bill Morneau fields
questions about Canada's international competitiveness
considering the recently enacted US tax reforms, which became
effective January 1, 2018, by the Tax Cuts and Jobs Act
("TCJA"). Indeed, the TCJA lowered US tax rates and
handed out tax breaks to all kinds of entrepreneurs, businesses,
and individuals. All of which tend to make Canada (and other OECD
members) internationally less competitive. However, some US
citizens residing in Canada were handed the opposite of a tax
break: a one-time tax hike. As with Canada's overall tax
competitiveness, Ottawa could provide tax relief to these
individuals.
Generally, under the TCJA every US citizen individual who
controls "a non-US corporation (or who owns an interest in a
non-US corporation controlled by US persons) has to pay a one-time
tax on the retained earnings of those corporations either as a
lump-sum or in installments spread out over eight years.
