The Big Story Experts say there are implications for Canadians from Trump's "Big Beautiful Bill"
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Jun 12, 2025 Stephen Johnston, a private equity manager and director of Omnigence Asset Management, dives into the potential effects of Trump's 'Big Beautiful Bill' on Canada's investment landscape. He discusses critical U.S. legislation regarding withholding taxes that could impact Canadian investors and pension funds. The conversation also explores how rising inflation and geopolitical tensions may force Canadian strategies to adapt. Johnston highlights the need for Canada to remain appealing to foreign investors amidst shifting economic dynamics.
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US Withholding Tax Hike Explained
- The US proposes a big withholding tax hike on dividends from US investments by Canadian investors, potentially hitting up to 50%.
- This move is a retaliation against Canada's digital services tax on big US tech companies and aims to pressure Canada for concessions.
US Strategy Behind Tax Hike
- The US aims to attract capital and re-industrialize by using harsh tax measures as bargaining chips.
- The strategy pressures trading partners to remove taxes like the digital services tax implemented by Canada.
US vs Canada Capital Strategy
- The US has a holistic plan: re-industrialize through lower taxes, deregulation, and lower energy prices.
- Canada risks losing capital and growth if it only focuses on tariffs and neglects attracting investment.