Canada is considering more permanent residency for foreigners residing in the country.
Immigration Minister Marco Mendocino told Bloomberg that the federal government will announce this soon after Canada announces that it will receive more than 400,000 immigrants annually for the next three years.
Why this change is necessary?
“It is important to recognize how Canada can accelerate the permanent residency of international students, temporary foreign workers and asylum seekers who have already been in the country,” he said. This is essential to alleviate Canada’s current economic challenges, in part due to declining migration rates due to COVID-19.
Declining levels of immigration in Canada have slowed population, workforce, and economic growth.
What you need to know before entering Canada?
International students with COVID-19 symptoms or their families cannot board a plane. If symptoms appear upon arrival in Canada, Canadian health workers will perform an assessment and the person may not be admitted or taken to a hospital for a medical examination.
Immigration Trust. A five-year tax holiday for newcomers to Canada
Under Canada’s Income Tax Act, new immigrants to Canada receive a five-year “tax exemption period” upon arrival in Canada. This is especially beneficial for wealthy individuals settling in Canada or owning assets abroad.
Upon arrival in Canada, immigrants are generally subject to Canadian income tax on their global income. However, there are legal provisions that allow the creation of what is known as an “immigrant trust.” This trust has foreign investment assets of new immigrants. If properly structured, foreign income and capital gains from assets held in the trust are exempt from tax.
Immigrants can establish an immigration trust and transfer foreign assets to Canada before arriving in Canada. For example, if you live in Canada, own real estate in your home country, and plan to earn rental income, you can establish an immigration trust abroad. The person can then establish an immigration trust abroad and transfer the property to that trust. For 60 months, or 5 years, from the date a person becomes a resident of Canada, Canadian authorities do not tax real estate rental income.
With this five-year tax break, immigrants can become Canadian citizens in just three years and then choose to become Canadian tax non-residents. As a result, foreign income and capital gains may not be tax deductible in Canada at any time.
