Snowbirds targets under security and tax deal with US
Canadian snowbirds could be trading winter’s bite for a bite from the taxman starting this year.
Memos show the Canada Revenue Agency and Employment and Social Development Canada plan to use a planned border exit-tracking system to avoid paying hundreds of millions of dollars in social benefits now going to people who don’t qualify due to their long absences from Canada.
A new tax treaty between Canada and the United States will see the two tax departments sharing a lot more information–including teh number of days Canadians spend in sunnier climes. That could mean new taxes, double taxation and even penalties for Canadians who don’t report information accurately or who fail to file U.S. returns.
The system will allow the two countries to compare the number of days each year that snowbirds to double check the reports made by travellers. That could affect country of residence considerations which could lead to Canadian citizens being required to pay taxes in the States, payment of Canadian departure taxes and affect eligibility for Canadian health care benefits.
The federal government estimates it can avoid paying anywhere from $194-million to $319-million dollars in benefits over five years.
The tracking system was originally part of the 2011 perimeter security pact in which Canada and the U.S. agreed to track entry and exit information on travellers. Currently the system is only in place at land borders. The first two phases of the program focussed only on foreign nationals and permanent residents of the two countries. That will soon change to include all ports of entry and citizens of both nations.
