ISSUES MANAGEMENT: BUSINESS COALITIONS

Case Study 1: Tax Policy

TAX POLICY

challenge

The existing withholding tax on cross-border interest payments between Canada and the United States has an adverse impact on cross-border acquisitions by Canadian companies. As a result, a number of Canadian-based multinational companies formed a coalition to advocate for the elimination of this withholding tax. Department of Finance officials were opposed on the grounds that the elimination of the withholding tax would result in a decrease in revenue for the Federal Government.

strategy

Working closely with the members of the Coalition, we developed a strategic communications and government relations program designed to convince Government decision-makers that the benefits of eliminating the withholding tax far outweigh a minimum revenue loss to the Government. As Coalition Secretariat, we undertook research to determine existing attitudes of key Departmental officials and political decision-makers towards eliminating the cross-border withholding tax and developed key messages to respond to the concerns of each audience. We developed and implemented a contact program with key Departmental officials, political decision-makers, influencers and key industry stakeholders. We organized independent third-party experts to research and prepare studies favourable to the coalition's position and, with assistance from our associates in Washington , DC , created support from a major US business association, who in turn, advocated for the elimination of the tax with the US Treasury Department. We also helped create a positive working environment between the Coalition and Department of Finance officials responsible for this matter.

results

Departmental officials have acknowledged the benefits of eliminating the withholding tax and appear open to recommending the requested change, at least in part, to the Minister of Finance.