December 12, Re: Submission on Treaty Shopping. Dear Sir/Madam:

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1 McCarthy Tétrault LLP Suite De La Gauchetière Street West Montréal QC H3B 0A2 Canada Tel: Fax: McCarthy Tétrault LLP December 12, 2013 Via Treaty Shopping Tax Legislation Division Tax Policy Branch Department of Finance 140 O Connor Street Ottawa, Ontario K1A 0G5 Re: Submission on Treaty Shopping Dear Sir/Madam: This letter is sent in connection with the Department of Finance (the Department ) consultative process on treaty shopping. In August 2013, the Department released a consultation paper examining various approaches to combat treaty shopping, 1 and we wish to express our concerns with certain proposals formulated by the Department. It is our view that the Department has concluded prematurely on the Government s inability to counter abusive treaty shopping through the Courts. This overly negative analysis is causing the Department to rush the adoption of a new anti-treaty shopping rule. Furthermore, we respectively submit that the introduction of a domestic anti-treaty shopping rule would conflict with Canada s international law obligations. Part I: Canadian Judicial Experience The Department s position in the Consultation Paper is that the Canadian Courts do not afford the Government with a real forum to successfully challenge treaty shopping. However, an objective review of the cases does not support this conclusion at this stage of the debate. 1. Crown Forest Industries Ltd. 2 The Supreme Court clearly sided against treaty shopping where a corporation incorporated in the Bahamas and whose office and place of management were located in the United States claimed benefits of the Canada-US tax treaty to reduce the withholding tax rate on rent payments received from its Canadian subsidiary. The Supreme Court s unanimous position against treaty shopping is expressed in the course of examining the residency issue. First, the Court explains that [t]he goal of the Convention is not to permit companies incorporated in a third party country (the Bahamas) to benefit from a reduced tax liability on source income merely by virtue of dealing with a Canadian company through an office situated in the U.S. 3 Afterwards, the Court further explains that [i]t seems to [it] that both Norsk and [Crown Forest] are seeking to minimize their tax liability by picking and

2 page 2 choosing the international tax regimes most immediately beneficial to them. Although there is nothing improper with such behaviour, [the Court] certainly believe[s] that it is not to be encouraged or promoted by judicial interpretation of existing agreements. 4 Justice Iacobucci goes even further at paragraph 52 of the judgement, stating: I find this possibility to be highly undesirable. Treaty shopping might be encouraged in which enterprises could route their income through particular states in order to avail themselves of benefits that were designed to be given only to residents of the contracting states. This result would be patently contrary to the basis on which Canada ceded its jurisdiction to tax as the source country, namely that the U.S. as the resident country would tax the income MIL (Investments) S.A. 6 Even though the Department qualifies MIL as the leading Canadian treaty shopping case, one must recall that the Tax Court s decision was essentially facts driven 7 and, as such, that it does not stand for the proposition that GAAR cannot be used to successfully challenge treaty shopping strategies. In this case, the Tax Court rejected the application of the GAAR and determined that MIL was entitled to the benefits of the relevant tax treaty. The GAAR was held not to apply because there was no avoidance transaction. This determination was based on the specific facts of the case. Broadly, the Tax Court concluded that the migration of the Cayman company to Luxembourg was not part of the same series of transactions as the sale of its interest in Diamond Field Resources Ltd. It was only after arriving to the above conclusion that Justice Bell, in a two paragraph obiter dictum, evacuated the treaty shopping question, finding that there had been no abuse of the Canada-Luxembourg Tax Treaty. The Federal Court of Appeal (the FCA ) later agreed with him on this point, but did not provide much by way of substantive analysis in its brief judgment, delivered from the bench. 8 These short and general comments, on the complex and important topic of treaty shopping, cannot possibly have overturned those previously made in Crown Forest by the Supreme Court of Canada, which has not yet had the opportunity to consider the application of GAAR in a treaty shopping context. 3. Prévost Car 9 and Velcro Canada 10 These two cases share similar factual backgrounds. They involve the interposition of intermediary corporations to earn certain types of income (dividends/royalties). Both cases were decided in favor of the taxpayer further to the Court concluding that the taxpayers were the beneficial owners of the dividend or royalty payments received for purposes of the relevant tax treaty. However, it is very important to emphasize that the Minister did not invoke GAAR even though both cases were premised on the use of intermediary corporation to benefit from a reduction of the withholding tax rate. Once again, neither of these cases stands for the proposition that GAAR cannot be used to successfully challenge this particular type of treaty shopping strategy. 4. Garon Family Trust 11 After having determined that the Garon Family trust was resident of Canada, Justice Woods of the Tax Court of Canada stated, in an obiter dictum, that GAAR did not apply in this case as

3 page 3 there was no abuse of the Canada-Barbados tax treaty. Also in an obiter dictum, the Federal Court of Appeal comments on the Tax Court s observations relating to GAAR and agrees that there is no treaty abuse. While this statement is perhaps the broadest in support of treaty shopping in the jurisprudence, the Supreme Court was careful to specify that it should not be understood as endorsing the reasons of the Federal Court of Appeal 12 on the matter of the application of GAAR. Therefore, the Supreme Court left the door open to a GAAR challenge in treaty shopping cases. 5. Antle 13 The last noteworthy decision is the Antle case in which Justice Miller of the Tax Court of Canada held in obiter dictum that GAAR unambiguously applied to a situation where the facts showed that a tax treaty was unduly being taken advantage of. He went as far as to say that: The strategy [employed by the taxpayer] is so contrary to the object, spirit, purpose, policy, call it what you will, of Canada s taxation laws with respect to capital gains, specifically as they relate to the marital unit, as well as to the very essence of international conventions that it could become a classic law school model of what GAAR was intended to capture. 14 On appeal, the FCA did not comment on GAAR, but nevertheless found in favour of the Minister on the basis that the trust in issue in the case had not been validly constituted and that it amounted to a sham. 6. Conclusion The Department paints an overly pessimistic portrait of the state of Canadian jurisprudence on treaty shopping. The Department also fails to mention that the Supreme Court, after having expressed reservations on treaty shopping in Crown Forest, has yet to lay down the framework for the application of GAAR to abusive treaty shopping strategies and that it has clearly indicated its willingness to tackle this issue in Garron Family Trust. For Canada to adopt a domestic anti-treaty shopping rule based on its perceived inability to properly counter treaty shopping through the Courts appears to misread the views expressed by the Courts on treaty shopping and at least to be a highly premature reaction. Part II: Violation of International Law In its Consultation Paper, the Department examines different types of actions that could be taken in order to curb the perceived problem of treaty shopping. Among them is the enactment of a domestic anti-treaty shopping rule that would purport to prevail over Canada s tax treaties. 15 We submit this would conflict with Canada s obligations under international law. 1. Adoption of a Domestic Anti-Treaty Shopping Rule Constitutes Treaty Override Treaty override occurs where, after having entered into a treaty, a contracting state introduces provisions into its domestic law that apply notwithstanding the treaty and that overrule its treaty obligations. 16 In the tax context, overriding legislation permits the denial of treaty benefits to a taxpayer who would be entitled to them according to the tax treaty. The adoption of a domestic anti-treaty shopping rule by Canada would therefore constitute treaty override. Indeed, the Department expressly mentions in the Consultation Paper that any proposed domestic provision would take precedence over all of Canada s tax treaties. 17

4 page 4 One might argue that domestic anti-treaty shopping rules do not amount to treaty override because they are in harmony with the tax treaty s object and purpose which are often considered to include the prevention of fiscal evasion. 18 Such reasoning remains unconvincing, however, because domestic anti-treaty shopping rules have the effect of denying treaty benefits to which the taxpayer has a right under the treaty. Not surprisingly, treaty override is prohibited by international law and consequently, the introduction of overriding legislation places a state in a situation of conflict with its obligation under both positive international law and general international law principles. Positive international law clearly prohibits treaty override. International law governing treaties mainly originates from the Vienna Convention on the Law of Treaties. 19 This convention imposes upon treaty partners the fundamental obligation to respect their commitments 20 and provides that they may not invoke the provisions of [their] internal law as justification for [their] failure to perform a treaty 21. Since treaty override involves disregarding treaty obligations based on domestic legislation, treaty override is in conflict with such international law obligations. 22 Moreover, international law does not recognize any settled principle against treaty shopping that could potentially be relied on to balance the international law obligations established unequivocally by the Vienna Convention Adverse Consequences Related to Treaty Override It is reasonable to assume that negative consequences would flow from the adoption of a domestic anti-treaty shopping rule. It is unrealistic to expect that such an important change to Canadian law would be overlooked by treaty partners, as the practice of treaty override in treaty shopping area is abundantly documented in academic literature and strongly criticized by authors. 24 The result could include the termination of certain treaties 25 and a loss of efficacy of the Canadian tax treaty network. 26 Canada would also be exposed to retaliation from treaty partners, which in turn could jeopardise access to Canada s tax treaties network for Canadian taxpayers. It is well known that Canadian taxpayers use Canada s treaty network to organise their affairs outside of Canada. This often involves the use of foreign holding companies which amongst other things permit tax-efficient deployment and repatriation of capital. If treaty partners were to follow Canada s proposed approach, Canadians could lose access to these strategies. 3. OECD s Position Toward Tax Treaty Override A close reading of paragraphs 9.2 to 9.6 of the OECD Commentaries on the Articles of the Model Tax Convention 27 reveals that the OECD does not take any stand on the use of domestic legislation to prevent treaty shopping, but merely reports two different points of view supported by some states. At paragraph 9.1, the OECD Commentary states: 9.2 [ ] [Many] States take account of the fact that taxes are ultimately imposed through the provisions of domestic law, as restricted (and in some rare cases broadened) by the provisions of tax conventions. [ ] For these States, the issue then becomes whether the provisions of tax conventions may prevent the application of the anti-abuse provisions of domestic law, which is the second question above. [ ] 9.3 Other States prefer to view some abuses as being abuses of the convention itself, as opposed to abuses of domestic law. These States, however, then consider that a proper

5 page 5 construction of tax conventions allows them to disregard abusive transactions entered into with the view of obtaining unintended benefits under the provisions of these conventions. [emphasis added] The OECD is not only silent on the issue of whether it is appropriate to resort to internal law to counter treaty shopping, but goes on to review in great detail the various measures that can be introduced in tax treaties to curb abuses, 28 which may be interpreted as a preference for treaty negotiation over treaty override. Although the OECD commentaries are of significant importance, in order to properly assess the OECD position, it is necessary to consider all of the material released by this organisation. Previously, the OECD has published various reports in which it took a clear position against tax treaty override. In a previous report specifically dealing with treaty override, the OECD sets out that even with regard to the objective behind treaty override, which is often to thwart abuses and therefore is legitimate, the Committee on Fiscal Affairs remains strongly opposed to overriding legislation. It cannot share the view that breaches of freely entered obligations are an appropriate way to amend treaty obligations. 29 The OECD, rather, urges opting for negotiation in spite of the challenges. 30 Indeed, the OECD position goes beyond disapproval of treaty override since the OECD takes the view that absent anti-abuse clauses in a tax treaty, the treaty benefits must be granted even if this results in an improper use of the treaty. 31 In light of all this, it is hard to understand how the Department can rely on the OECD to support its plan to adopt a domestic anti-treaty shopping provision. Finally, the Department seems to be of the view that an anti-treaty shopping provision should be based essentially on an avoidance test (either in the form of a purpose test or objective criteria aimed at determining a taxpayer s intent). 32 It is important to note, however, that the OECD and United Nations, by contrast, both advocate a two-step approach. Paragraph 9.5 of the OECD Commentaries, for example, states that the guiding principle is that the benefits of a double taxation convention should not be available where a main purpose for entering into certain transactions or arrangements was to secure a more favorable tax position and obtaining that more favourable treatment in these circumstances would be contrary to the object and purpose of the relevant provision [emphasis added]. 33 The Consultation Paper does not explain why Canada believes it would be justified to abandon the second of these criteria. 4. Conclusion We submit that the introduction of a domestic anti-treaty shopping rule would amount to treaty override, which runs counter to the principles of international law and which, as such, could result in adverse consequences for Canadians doing business abroad. Also, we are of the view that such an addition to Canadian domestic legislation is not consistent with the principles promoted by the OECD. The proper approach to solve the treaty shopping issue is to renegotiate tax treaties. This is the most precise and efficient way to deal with abusive treaty shopping. Indeed, there seems to be a limited number of perceived high risk jurisdictions. Renegotiating tax treaties currently in force with those jurisdictions on a priority basis would clearly be feasible and would not amount to renegotiating all treaties currently in force. Also, by negotiating anti-treaty shopping clauses on an individual basis, allows each clause to be tailored to the perceived level of risk. 34 Although renegotiation requires more time and resources, abusive treaty shopping is recognized as an international issue and there is an international will to fight it. 35 Therefore, when bringing

6 page 6 this issue to the negotiating table, Canada is unlikely to face opposition from its treaty partners. 36 Besides, Canada has already been successful at negotiating provisions limiting benefits in situations of abuse in some of its tax treaties. 37 Finally, the adoption of a domestic anti-treaty shopping rule could prove to be a barrier to investment in Canada. A number of investment pools such as private equity or venture capital funds invest in Canada through an intermediate jurisdiction. This is often done to simplify the compliance and the resulting disclosure requirements in respect of distributions on the investment (such as dividends and interest) and divestiture of the investment. If Canada were to proceed with the adoption of a domestic anti-treaty shopping rule as is proposed in the Consultation Paper, these investors might decide not to proceed with a particular investment because of either uncertainty as to their ability to benefit from the treaty between the intermediate jurisdiction and Canada or the increased disclosure and increased compliance burden caused by having to forgo the usual investment structures. Please note that, according to your proposal to add transparency to this consultation process, we would like this submission to be published on the Department s website and that McCarthy Tétrault LLP s name be included. We look forward to continuing the dialogue with the Department on the issues surrounding abusive treaty shopping. In the meantime, should you have any questions about this submission, please do not hesitate to contact Frederic Harvey at Yours very truly, McCarthy Tétrault LLP Canada, Department of Finance, Consultation Paper on Treaty Shopping The Problem and Possible Solutions, 2013, online: < ( Consultation Paper ). Crown Forest Industries Ltd. v. Canada, [1995] 2 S.C.R. 802, [1995] 2 C.T.C. 64 (S.C.C.), rev g [1994] 1 C.T.C. 174, 94 D.T.C (F.C.A.), aff g [1992] 2 C.T.C. 1, 92 D.T.C (F.C.T.D.) ( Crown Forest ). Ibid. at para. 49. Ibid. at para. 49. Ibid. at para. 52. MIL (Investments) S.A. v. R., 2006 TCC 460, [2006] 5 C.T.C. 2552, aff d by 2007 FCA 236, [2007] 4 C.T.C. 235 ( MIL (TCC) ). In particular and as stated by justice Pelletier for the Federal Court of Appeal, the Tax Court s decision is largely based on the conclusion that the transactions did not form part of the same series. See MIL (Investments) S.A. v. R., 2007 FCA 236, [2007] 4 C.T.C. 235, paragraph 2 ( MIL (FCA) ). More specifically, the FCA stated that it could not find an object or purposes [of the tax treaty] whose abuse would justify [departing] from the plain words of the disposition (MIL (FCA), supra, note 7, at para. 6).

7 page Prévost Car Inc. v. Canada, 2009 FCA 57, [2009] 3 C.T.C. 160, aff g 2008 TCC 231, [2008] 5 C.T.C Velcro Canada Inc. v. R., 2012 TCC 57, [2012] 4 C.T.C Fundy Settlement v. Canada, 2012 SCC 14, [2012] 1 S.C.R. 520, aff g 2010 FCA 309, [2011] 2 C.T.C. 7, aff g 2009 TCC 450, [2010] 2 C.T.C ( Garon Family Trust ). Ibid. at para. 19. Antle v. Canada, 2010 FCA 280, 2010 D.T.C. 5172, aff g 2009 TCC 465, [2010] 4 C.T.C Antle v. Canada (sub nom. Antle v. The Queen), 2009 TCC 465, [2010] 4 C.T.C at para Consultation Paper, supra note 1 at section 6.2. See Sung-Soo Han, The Harmonization of Tax Treaties and Domestic Law ( ) 7 Int l L. & Mgmt. Rev. 30 at ( Han ); Richard L. Doernberg, Overriding Tax Treaties: The U.S. Perspective (1995) 9 Emory Int l L. Rev. 71 at ) ( Doernberg, Overriding Tax Treaties ); Yves Bonnard, The "Triangular Case" in the New U.S.-Netherlands Tax Treaty: Mechanisms and Tax Planning ( ) 23 Denv. J. Int l L. & Pol y 161 at 175 ( Bonnard ); Mark J. Wolff, Congressional Unilateral Tax Treaty Overrides: The "Latter in Time Doctrine" is Out of Time! ( ) 9 Fla. Tax Rev. 699 at 709 ( Wolff ). Consultation Paper, supra note 1 at section 6.2. It is interesting to note that the OECD is in agreement with the fact that domestic anti-treaty shopping rules lead to treaty override as it sets aside the tax treaty provisions in case of treaty shopping. In a report dealing with tax treaty override, the OECD defines overriding legislation and states the following: Legislation may take the form of a provision that treaty provisions are to be disregarded in certain circumstances (e.g. in cases of treaty shopping or other forms of abuse) (emphasis added). OECD, Tax Treaty Override, adopted by the OECD Council on October 2, 1989, at para. 2 ( OECD Override Report ). See Anna A. Kornikova, Solving the Problem of Tax-Treaty Shopping Through the Use of Limitation on Benefits Provisions ( ) 8 Rich. J. Global L. & Bus. 249 at ( Kornikova ); Michael S. Kirsch, The Limits of Administrative Guidance in the Interpretation of Tax Treaties ( ) 87 Tex. L. Rev at 1070 ( Kirsch ); Wolff, supra note 16 at 701; OCDE Override Report, supra note 17 at para ; OCDE, Commentaries on the Articles of the Model Tax Convention, 2010, article 1, para. 7 ( OECD Commentaries ). Vienna Convention on the Law of Treaties, 23 May 1969, 1155 U.N.T.S. 331 (entered into force 27 January 1980) (the Vienna Convention ). Tax treaties are international agreements governed by international law of which the Vienna Convention is part. The Vienna Convention provides for rules applicable to treaties concluded between signatory states after it came into force. Canada adheres to the Vienna Convention. As for what is not covered by the Vienna Convention, it is governed by customary international law. However, this does necessarily lead to different results as most principles embodied in the Vienna Convention arise from customary international law. OECD, Override report, supra note 17 at para. 8. This obligation is found in article 26 which reads: Every treaty in force is binding upon the parties to it and must be performed by them in good faith. This obligation is also known as the principle of pacta sunt servanda. Vienna Convention, supra note 19 at article 27. Other obligations found in the Vienna Convention implicitly prohibit treaty override. Article 31 requires the contracting states to interpret treaties in good faith. It will hardly be possible to fulfil this obligation when giving precedence to domestic legislation over the treaty. Also, article 39 supplies for a rule in order to amend treaties and it necessitates agreement between the contracting states. Treaty override has the effect of unilaterally changing the terms of the treaty and therefore contravenes the established procedure. See Luiza Brindusa Cruceru, Treaty Shopping and the Abuse of Income Tax Conventions (LL.M. Thesis, McGill University Institute of Comparative Law, 2005) at p.46-50, 54; Richard Tremblay and Peter Macdonald, GAAR and Treaties (2004) 17 Can. Pet. Tax J. 1 at p. 7; see also Guglielmo Maisto, Domestic Anti-Abuse Rules and Bilateral Tax Conventions in the Light of Public International Law in Guglielmo Maisto, Angelo Nikolakakis and John M. Ulmer, ed., Essays on Tax Treaties, A Tribute to David A. Ward (Toronto and Amsterdam: Canadian Tax Foundation and IBFD, 2013) 325 at

8 page See Kornikova, supra note 18 at ; Svetozara Petkova, Treaty Shopping The Perspective of National Regulators (2004) 32 Intertax 543 at 546; Anthony C. Infanti, Curtailing Tax Treaty Overrides: A Call to Action ( ) 62 U. Pitt. L. Rev. 677 at p ( Infanti ); David Sachs, Is the 19th Century Doctrine of Treaty Override Good Law for Modern Day Tax Treaties? ( ) 47 Tax Law. 867 at ; Richard L. Doernberg, Treaty Override by Administrative Regulation: The Multiparty Financing Regulations ( ) 2 Fla. Tax Rev. 521; Han, supra note 16 at 42, 49; Timothy S. Guenther, Tax Treaties and Overrides: The Multiple-Party Financing Dilemma ( ) 16 Va. Tax Rev. 645 at ; Irwin Halpern, United States Treaty Obligations, Revenue Laws, and New Section 7852(d) of the Internal Revenue Code ( ) 5 Fla. Int l L.J. 1 at p.19-21; Doernberg, Overriding Tax Treaties, supra note 16; Kirsch, supra note 18 at 1098; Richard L. Doernberg, Legislative Override of Income Tax Treaties: The Branch Profits Tax and Congressional Arrogation of Authority ( ) 42 Tax Law. 173 at ( Doernberg, Legislative Override ); Wolff, supra note 16 at 753; David L. Raish and N. Susan Stone (Subcommittee Co- Chairs; American Bar Association Section of Taxation, Committee on U.S. Activities of Foreigners and Tax Treaties), Issues Paper on the Tax Treaty Making Process ( ) 46 Tax Law. 477; H. Arnold Sherman and Denise J.W. Dunn, Unilateral Treaty Overrides Canada jumps on the Bandwagon (1992) 20 Intertax 590 at 594; Charles W. Cope, U.S. Income Tax Treaties: Notes and Comments on Some Present and Future Policies (1993) 71 Taxes 955 at 960; Carl F. Steiss, Issues Relating to Tax Treaties in 1993 Conference Report, Toronto, Canadian Tax Foundation, 1994 ( Steiss ); Emmanuel de Margerie (France s Ambassador to the United States), EEC Group of Six Addresses 1986 Act s Treaty Override Provisions (1987) 36 Tax Notes 437 ( de Margerie ). Vienna Convention, supra note 19 at article 60(1). For example, the United States, after having adopted overriding legislation in the past, were warned by its discontent tax treaty partners that treaty termination was being considered (see John Turro, OECD Ambassadors Protest Rostenkowski Foreign Tax Bill (1992) 5 Tax Notes Int'l 289; Bonnard, supra note 16 at 175; Steiss, supra note 24; Infanti, supra note 24). For example, partners opposing to integration of a domestic legislation overriding the treaty could, in return, deliberately fail to fulfill their obligations under the treaty which could result, among other consequences, in depriving Canada of tax information held by such treaty partners that would be helpful to fight international tax evasion. (See Leonardo F.M. Castro, U.S. Policy Against Treaty Shopping From Aiken Industries to Anti-Conduit Regs: Critical View of Current Double-Step Approach in Light of Tax Treaties Objectives and Purposes ( ) 31 Va. Tax Rev. 297 at 323, 325; unknown author, International Journal (1990) 68 Taxes 1136 at This is especially important given Canada s concern for international tax evasion, a concern evidenced by the various measures announced in the 2013 Budget to address international tax evasion and aggressive tax avoidance. For further detail, see Canada, Department of Finance, Budget Plan: Jobs, Growth and Long-term Prosperity - Economic Action Plan 2013, 2013, at chapter 3.2.) OECD Commentaries, supra note 18. Ibid., article 1, at para , OECD Override Report, supra note 17 at para It is true that the OECD foresees situations where treaty override may be acceptable but their scope is very limited and the treaty override contemplated by the Department does not fell within any of them. Indeed, the OECD states that in situations of jurisprudential turnarounds deviating from common interpretation or in situations of treaty abuses, a fast action shall be taken to restore the proper result and this could be achieved through domestic legislation after the country has ensured that there is a broad consensus that the proposed measure will not harm international tax relations. Where no such consensus exists, there must be renegotiation. OECD Override Report, supra note 17 at para. 38. The Department considers the possibility of adopting a domestic anti-treaty rule that has an overriding effect. The US experience has shown without a doubt that the enactment of overriding legislation leads treaty partners to protest. See supra note 25 and corresponding text. Therefore, it cannot be said that there is a consensus that international tax relations are unscathed by domestic anti-treaty shopping rules. OECD Override Report, supra note 17 at para Also, as the Department itself states in its Consultation Paper, although the OECD contemplates the possibility that countries may implement domestic anti-abuse rules, it has traditionally limited its suggested approaches to those which countries might consider in bilateral treaty negotiations.

9 page OECD, Double Taxation Conventions and the Use of Conduit Companies, adopted by the OECD Council on November 27, 1986, at para. 43. Consultation Paper, at section 7.1. OECD Commentaries, supra note 18, at para See also, Commentaries on The Article of The United Nations Model Double Taxation Convention Between Developed and Developing Countries, 2011, article 1, para. 23 and 25. See Marshall J. Langer and Rosemarie N. Sanderson, Treaty Developments (1986) 12 Int l Tax J. 237 at 238; Kenneth W. Gideon (Assistant Secretary of Treasury (Tax Policy)), Dinner Speech (1991) 9 Am. J. Tax Pol y 71 at 74. See Doernberg, Legislative Override, supra note 24 at ; de Margerie, supra note 24, at 437. In this regard, the US experience is noteworthy as the Unites States could amend a tax treaty to add an anti-treaty shopping clause after only a few months of negotiation. See Doernberg, Legislative Override, supra note 24 at Paragraph 29(6) of the Germany-Canada treaty reads as follows: Nothing in the Agreement shall be construed as preventing a Contracting State from denying benefits under the Agreement where it can reasonably be concluded that to do otherwise would result in an abuse of the provisions of the Agreement or of the domestic laws of that State. Agreement Between Canada and the Federal Republic of Germany for the Avoidance of Double Taxation with Respect to Taxes on Income and Certain Other Taxes, the Prevention of Fiscal Evasion and the Assistance in Tax Matters, Canada and Germany, 17 July See also Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, United States and Canada, United States and Canada, at article XXIX-A(7). Moreover, as the Department itself notes in the Consultation Paper, Canada included in 16 of its latest tax treaties a main purpose test which denies treaty benefits in certain circumstances where one of the main purposes is to obtain the benefits (Consultation Paper, supra note 1 at sections 6.3 and 7.1). See, for example, paragraph 10(7) of the Convention Between the Government of Canada and the Government of the United Kingdom of Great Britain and Northern Ireland For the Avoidance of Double Taxation and the Prevention of Fiscal Evasion With Respect to Taxes on Income and Capital Gains which reads as follows: "7. The provisions of this Article shall not apply if it was the main purpose or one of the main purposes of any person concerned with the creation or assignment of the shares or other rights in respect of which the dividend is paid to take advantage of this Article by means of that creation or assignment."