S/C/N/ March ( ) Page: 1/7

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1 9 March 2015 ( ) Page: 1/7 Council for Trade in Services Original: English NOTIFICATION FROM CANADA WITH RESPECT TO THE MINISTERIAL DECISION CONCERNING PREFERENTIAL TREATMENT TO SERVICES AND SERVICE SUPPLIERS OF LEAST-DEVELOPED COUNTRIES The following notification from the delegation of Canada, dated 5 March 2015, is being circulated to the Members of the Council for Trade in Services. Recognizing the needs, interests and challenges of least-developed countries (LDCs), Canada supports the implementation of the decision by Ministers at the WTO s Eighth Ministerial Conference (WT/L/847) on the waiver from GATS Article II:1 to provide preferential treatment for services and services suppliers of LDCs, and the decision by Ministers at the WTO s Ninth Ministerial Conference (WT/L/918) to operationalize this waiver. Canada supports these efforts to further develop and integrate LDCs into the global trading system and encourages other WTO Members to do likewise. Canada also welcomes The Collective Request Pursuant to the Bali Decision on the Operationalization of the LDC Services Waiver Concerning Preferential Treatment to Services and Service Suppliers of Least Developed Countries (S/C/W/356) (the LDC Collective Request ), which identifies commercially meaningful interests relating to LDC services and service suppliers. In accordance with Ministers decisions, this notification sets out Canada s treatment for LDC services and service suppliers in areas identified in the LDC Collective Request, subject to future legislative or regulatory change. 1 TEMPORARY MOVEMENT OF NATURAL PERSONS (MODE 4) 1.1. Canada recognizes the importance of the temporary movement of natural persons (mode 4) in developing trade in services capacities of LDCs, in particular items A.2-5, A.11, A.26, A.28 and A of the LDC Collective Request. Canada provides temporary entry for certain categories of business persons that is free from economic needs test requirements and quantitative restrictions. This facilitates the movement of LDC business persons to Canada by supporting a streamlined and expedited process, as well as lower associated fees which benefit LDC service suppliers In addition, business persons qualifying in the business visitor category are eligible for temporary entry to Canada for up to 6 months without the need for a work permit. Qualifying business visitors may be engaged in a broad spectrum of activities, beyond those committed in Canada s GATS commitments (90 days), including key areas of interest to LDCs, such as after-sale and after-lease services, and installation activities Regarding the temporary entry of intra-company transferees, international companies may temporarily transfer qualified employees to Canada from LDCs. Eligible employees must be transferred to a position in an executive, senior management, or specialized knowledge capacity. While qualified intra-company transferees require a work permit, they are exempt from the requirement for an economic needs test Canada also facilitates the temporary entry of professionals, including both independent professionals and contract service suppliers, in various sectors and occupations, such as engineers, agrologists, architects, forestry professionals, geomatics professionals and land surveyors as well as foreign legal consultants, urban planners and senior computer specialists. Qualified

2 - 2 - professionals, who meet the applicable education and licensing requirements, must obtain a work permit; however, they are exempt from the requirement for an economic needs test. Other professionals may also be eligible for temporary entry into Canada, pursuant to Canada s Temporary Foreign Worker Program requirements, which include an economic needs test In further recognition of the importance of trade in professional services and the particular role of the recognition of licenses and qualifications, Canada encourages its relevant bodies to consider professional services where Canada and one or more LDCs are mutually interested in establishing a dialogue on issues related to recognition of professional qualifications, licensing or registration Acknowledging the importance of processing times and fees for work authorizations to LDCs, Canada makes decisions within a reasonable period of time after receipt of a completed application and informs the applicant of the decision including, if approved, the applicable conditions such as the period of stay, or, if denied, the reasons for the refusal. In addition, Canada limits any fees for the processing of applications for work authorizations to ensure that they do not unduly impair trade. 2 FACILITATION OF STUDENTS 2.1. With regard to items A.27 and A.29 of the LDC Collective Request, Canada recognizes the importance of student work permits and scholarships, not only to trade in services, but also in facilitating overall capacity building within LDCs. Canada has a number of student work permit programs allowing international students, including from LDCs, as well as their spouses/common law partners to work in Canada possible while completing their studies. These programs cover employment both on- and off-campus. For example, LDC students may work on campus at the institution where they study without a work permit if they are a full-time student in a recognized Canadian institution and have a valid student permit Additionally, international study permit holders in Canada may qualify to work off campus without a work permit for up to 20 hours per week during regular academic sessions and full-time during scheduled breaks, such as the winter and summer holidays or spring break. To qualify the international student must have a valid study permit, be a full-time student, be enrolled at a designated learning institution at the post-secondary level or, in Quebec, a vocational program at the secondary level, and be studying in an academic, vocational or professional training program that leads to a degree, diploma or certificate that is at least six months in duration Furthermore, Canada has a Post-Graduation Work Permit Program (PGWPP) which provides the opportunity for international students, including from LDCs, to work in Canada after they graduate. The PGWPP allows students who have graduated from a participating Canadian postsecondary institution to gain valuable Canadian work experience and establish business contacts in the Canadian market In addition, Canada acknowledges the importance of financial assistance for international students as well as researchers and faculty and has created many scholarships, programs and funding opportunities for them For students and postdoctoral researchers, awards are available including for study and research in Canada; for faculty and researchers, awards are available to faculty from LDC countries to study/research in Canada. Canada also has awards available to academic institutions from LDCs to facilitate collaboration within the academic community Some Canadian academic institutions also have scholarships or awards for international students, including from LDCs, intended to recognize high academic achievement, leadership or financial need Some of Canada s provinces and territories also provide scholarships and programs benefiting students from LDCs. For example, the Ontario Trillium Scholarship provided by the Government of Ontario is available to students from LDCs wishing to study in universities in Ontario.

3 - 3-3 MARKET ACCESS 3.1. Canada provides market access and national treatment to LDC services and service suppliers in many of the sectors of interest identified under item A.40 of the LDC Collective Request. Annex A of this Notification lists sectors identified in the LDC Collective Request for which Canada provides full market access and national treatment under modes 1 and 3. These benefits are extensive and range from construction work to maritime agency services to translation and interpretation services. Annex B of this Notification lists sectors identified in the LDC Collective Request for which Canada provides market access and national treatment under modes 1 and 3 with some restrictions. These benefits are also extensive and cover sectors such as accounting, auditing and bookkeeping services, investigation and security services and veterinary services. 4 CULTURAL SECTOR 4.1. With regard to item A.38 of the LDC Collective Request, Canada recognizes co-production treaties as important tools, contributing to the vitality of the audiovisual industry globally, as well as to facilitating economic and cultural exchanges, which offer opportunities to share best practices and learn from each other's expertise. Canadian producers have been coproducing internationally for more than four decades and for Canada, these treaties have been an important vehicle to strengthen international ties in the audiovisual sector Any LDC wishing to enter into negotiations with Canada for an audiovisual coproduction treaty may submit an official written request to the Minister of Canadian Heritage and Official Languages In addition to co-production treaties, there are other opportunities to participate in audiovisual production with Canada. LDC producers can produce audiovisual projects with Canadian producers through co-ventures, which are co-productions done outside the conventions of a treaty 1. Furthermore, LDC producers can also receive support for foreign location shootings in Canada through the Film or Video Production Services Tax Credit (PSTC) which is a refundable corporate tax credit Moreover, training opportunities exist in film, television and new media through the various national institutes 2. Industry exchanges or networking opportunities with industry experts are also possible through national and provincial Canadian audiovisual industry stakeholders 3. 5 FINANCIAL SERVICES 5.1. Canada has an open and competitive financial sector based on sound prudential rules. With regard to items A and A.20 of the LDC Collective Request, foreign banks, including from LDCs, can establish subsidiaries, full-service branches or lending branches. The framework for foreign bank branches allows LDC service suppliers a choice of juridical forms that provide for specific business powers and regulatory requirements. This provides LDC service suppliers flexibility with respect to how they provide financial services in Canada Canada provides LDCs with more extensive liberalization commitments relative to the GATS Annex on Financial Services as a voluntary signatory to the Understanding on Commitments in Financial Services. The Understanding provides a standardized list of liberalization commitments which includes the right to establish commercial presence to foreign financial service suppliers and a commitment to endeavour to eliminate monopoly rights in financial services or reduce their scope. 1 Information on co-ventures for television productions is available on the Canadian Radio-television and Telecommunications Commission s website at For information on co-ventures for film productions, refer to Telefilm Canada s Web site at 2 Such institutions include the National Screen Institute located in Winnipeg, L Institut national de l image et du son in Montreal, and the Canadian Film Centre in Toronto. 3 Such stakeholders include the Canadian Media Production Association (CMPA) - ; the Association québécoise de la production médiatique (AQPM) - the Ontario Media Development Corporation (OMDC) - and, Creative BC -

4 - 4-6 DOUBLE TAXATION & TAX REFUNDS 6.1. Canada recognizes items A.6, A.9 and A.13 of the LDC Collective Request and notes the following treatment for LDCs Canada s double taxation relief regime for income tax is available to any corporate taxpayer resident in Canada, irrespective of the percentage of LDC ownership in the corporate taxpayer. Authorized LDC banks may also benefit from Canada s double taxation relief regime for income tax in respect of their Canadian banking activities Every payer (including a foreign payer) who makes a payment of fees, commissions, or other amounts to an LDC service supplier in respect of services provided in Canada must withhold and remit an amount to the Canadian tax authority. However, this obligation can be waived if the LDC service supplier is resident in a country with which Canada has a tax treaty and the LDC service supplier does not have a fixed base or permanent establishment in Canada Expenses associated with conferences held in an LDC may be tax deductible under Canada s domestic income tax rules, provided among others that they are reasonable and do not correspond to personal expenditures. There are no restrictions on deductibility based on the location of the conference. 7 TRANSPORT AND LOGISTICS RELATED SERVICES 7.1. With regard to items A.23 and A.25 of the LDC Collective Request, Canada notes the following treatment extended to LDCs Canada has a liberal vessel registration regime that benefits corporations from LDCs. Canada s regime allows LDC corporations to register their vessels on the Canadian Registry of Vessels. If the LDC corporation registers a vessel not already registered in another country, a local presence is required in order to ensure effective flag state control. However, there are options as to how the vessel owner can fulfill the local presence requirement. The owner of the ship or the person from an LDC who has exclusive possession of the vessel must be: a) a subsidiary of the foreign corporation that is incorporated under the domestic laws of Canada or a province or territory; b) an employee or director in Canada of any branch office of the foreign corporation that is carrying on business in Canada; or c) a ship management company incorporated under the laws of Canada or a province or territory acting on behalf of the foreign company Canada s domestic income tax rules exempt from tax any income of an LDC resident earned in Canada from international shipping or from the operation of an aircraft in international traffic (including the transporting of passengers or goods) on the basis of reciprocity. The exemption includes income from logistical services when they are incidental to the operation of ships or aircraft in international traffic (e.g., accounting, marketing) Canada s Goods and Services Tax/Harmonized Sales Tax (GST/HST) generally does not apply to freight transportation services from LDCs that either begin or end outside Canada: i.e., to international movements of goods. While the GST/HST generally applies to freight transportation services that both begin and end in Canada, LDC businesses can usually recover any GST/HST levied on these services. 8 INTELLECTUAL PROPERTY 8.1. Canada recognizes the importance of item B.3 of the LDC Collective Request and notes the following treatment that benefits LDC services and service suppliers Canada s fees for registration and maintenance of patents, geographical indications (GIs), trade-marks and industrial design are set to ensure cost-recovery of the services being provided by the Canadian Intellectual Property Office. In addition, there a number of programs under which companies or individuals from LDCs many qualify for reduced fees. For example, under the small entity fee program, patent filling and maintenance fees are reduced by as much as 50% for

5 - 5 - enterprises with less than 50 employees. For trade-marks and GIs, if applications are made online, there is a reduction in fees of up to $ TEMPORARY ADMISSION OF EQUIPMENT 9.1. Canada recognizes item A.39 of the LDC Collective Request and broadly permits the duty-free temporary importation of a broad range of goods when used in certain commercial contexts. The goods, including equipment from LDC service suppliers, may not be sold, leased or further processed in Canada, and security may be required. Furthermore, as a signatory to the international Customs Convention on the A.T.A. Carnet for the Temporary Admission of Goods, Canada recognizes the ATA Carnet as security and permits the duty-free temporary importation of specified goods for exhibitions and certain professional equipment into over 70 countries, including equipment necessary for entertainers, theatre companies and orchestras. 5 4 For more information on the fees and processes for applying for patents, GIs, trade-marks and industrial design, please visit 5 Additional information is contained in the following explanatory memorandum: & 7-eng.html.

6 - 6 - ANNEX A SECTORS WITH FULL MARKET ACCESS AND NATIONAL TREATMENT IN CANADA FOR MODES 1 AND 3 1. Building cleaning services 2. Building completion and finishing work services (including glazing work and window glass installation work, plastering and painting work, floor and wall tilling work, floor laying, wall covering and wall papering work, demolition, scaffolding, foundation work including pile drilling, water well drilling, and ornamental and interior fitting work) 3. Commission agent services with the exception of alcoholic beverages 4. Construction work for commercial buildings 5. Construction work for multi-dwelling buildings 6. Construction work for warehouses and industrial buildings 7. Convention services 8. Data processing and tabulation services 9. Electrical wiring and other fitting work 10. Franchising services 11. Guidance and counselling services not elsewhere classified related to children 12. Hairdressing and other beauty services 13. Interior design services 14. Input preparation services 15. Installation and assembly work 16. Landscape services and landscape architectural services 17. Mailing lists compilation services 18. Maintenance and repair of office machinery, computers, fixtures, etc. 19. Maritime agency services 20. Market research services 21. Packaging services 22. Photographic services 23. Placement and supply services of personnel 24. Printing and packaging of materials services 25. Rental and Leasing Services without Operators 26. The following services auxiliary to maritime transport: cargo handling, storage and warehousing, freight forwarding and container station depot services 27. Specialty design services 28. Sporting and other recreational services except for gambling and betting 29. Technical testing and analysis services of motor vehicles 30. Telephone answering services 31. Time sharing services 32. Translation and Interpretation Services 33. Washing, and cleaning and dyeing services 34. Wood and metal joinery and carpentry work Sectors where treatment exceeds Canada s specific commitments under the WTO General Agreement on Trade in Services.

7 - 7 - ANNEX B SECTORS WITH MARKET ACCESS AND NATIONAL TREATMENT IN CANADA FOR MODES 1 AND 3 SUBJECT TO LIMITED RESTRICTIONS 1. Accounting, auditing and bookkeeping services except for residency requirements or commercial presence requirements for the practice of these professions in certain provinces and territories. 2. Architectural Services except in certain provinces and territories 3. Bank branches of subsidiaries 4. Construction and related engineering services except for construction of waterways, for road construction or for energy (power plants) construction in certain provinces and territories 5. Engineering design services except for R&D services or for residency requirements for land/surface surveyors in certain provinces and territories 6. Engineering Services except for R&D services or for residency requirements for land/surface surveyors in certain provinces and territories. 7. General Construction Work for Buildings except for construction of waterways, for road construction or for energy (power plants) construction in certain provinces and territories 8. General Construction Work for Civil Engineering except for construction of waterways, for road construction or for energy (power plants) construction in certain provinces and territories 9. Hotel and restaurant services except for some mode 3 restrictions including on liquor licences in certain provinces and territories 10. Integrated Engineering Services except for R&D services or for residency requirements for land/surface surveyors in certain provinces and territories 11. Investigation and security services except residency requirements in certain provinces and territories 12. Maintenance and repair of vessels 13. Other engineering services during the construction and installation phase except for construction of waterways, for road construction or for energy (power plants) construction in certain provinces and territories 14. Other lodging services except under mode 3 for alcoholic beverages 15. Rental of commercial vehicles with an operator services for international travel only 16. Services auxiliary to all modes of transport except for nationality requirements for customs brokers 17. Services incidental to agriculture, hunting and forestry except for residency requirement for designations, permits or licences in certain provinces and territories and other discretionary measures. 18. Services incidental to animal husbandry residency requirement in certain provinces and territories 19. Services auxiliary to insurance except for commercial presence requirements in most provinces and territories and residency requirements in certain provinces and territories. 20. Tour guide services except for residency requirements in certain provinces and territories 21. Travel agency and tour operator services except for residency requirements in certain provinces and territories 22. Veterinary services except for residency requirements in certain provinces and territories Sectors where treatment exceeds Canada s specific commitments under the WTO General Agreement on Trade in Services.