Trump’s Tax Tantrum: Why Canada Could Lose Billions in U.S. Income
A new U.S. tax bill just passed the House and it’s got Canada in the crosshairs. The U.S. is retaliating against countries like Canada that have introduced a digital tax on tech giants like Meta and Google. In response, the bill proposes sharply higher U.S. taxes on any income earned in the U.S. by investors from these countries.
What Does This Mean In Practice?
That means Canadian investors could pay a lot more tax on money they earn from the U.S.—like dividends from American shares, interest from U.S. bonds, or royalties from U.S. businesses.
Who’s affected? Just about everyone:
Pension funds managing Canadians’ retirement money
Individual retirement accounts and savings plans
Canadian companies with U.S. income
Even government bodies like the Bank of Canada.
In short: whether it’s a giant institution or your everyday investor, anyone earning passive income from the U.S. could be hit hard.
The increase? Up to 20% more tax—on top of what’s already paid. That could cost Canadian investors up to C$81 billion over the next 7 years.
Why this matters to you as an accountant
Clients with U.S. investments could owe more tax than expected
Retirement and cross-border planning is suddenly riskier
Longstanding tax treaties may no longer offer protection
Experts are calling it a “revenge tax” as it is a political move with real financial fallout.
What should accountants do now?
Go through your clients’ U.S.-sourced income—dividends, interest, royalties, everything.
Don’t rely on old tax treaty protections—they may no longer apply.
Stay alert. This bill could escalate into a full-blown international tax war, with serious consequences for cross-border business.
Source: Accounting Today Article
