The Canadian/U.S. cross border market could benefit substantially from the potential dissolution of a current withholding tax, where the Canadian government charges between 10% and 25% on interest and rent paid to non-residents, according to Martin Fingerhut, attorney at Blake, Cassels & Graydon.

This withholding tax currently applies to commonly securitized consumer assets, such as credit cards, auto loans, home-equity loans, personal lines of credit, which do not fit within the long-term debt exemption. Long-term mortgages and franchise loans fall into the commonly used exemption of transactions that do not require repayment of more than 25% of the principal within the first five years.

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