World Trade Organization Pension Plan Remission Order: SI/2024-6

Canada Gazette, Part II, Volume 158, Number 4

Registration
SI/2024-6 February 14, 2024

FINANCIAL ADMINISTRATION ACT

P.C. 2024-85 February 2, 2024

Her Excellency the Governor General in Council, considering that it is in the public interest to do so, on the recommendation of the Minister of Finance, pursuant to subsection 23(2)footnote a of the Financial Administration Act footnote b, makes the annexed World Trade Organization Pension Plan Remission Order.

World Trade Organization Pension Plan Remission Order

Definition

1 In this Order, WTO means the World Trade Organization.

Remission

2 Remission is granted to the WTO of the tax paid by the WTO to Canada under the Income Tax Act during the period beginning on January 1, 2000 and ending on December 31, 2011 in respect of investments made in connection with the WTO’s pension plan for its employees.

Interest and penalties

3 Remission is granted of interest and penalties paid in respect of any amount for which remission is granted under section 2.

Conditions

4 Remission of an amount under section 2 or 3 is granted only to the extent to which the amount has not otherwise been rebated, remitted, credited or refunded to any person under the Financial Administration Act or any other Act of Parliament and on condition that

Coming into force

5 This Order comes into force on the day on which it is made.

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

Pursuant to subsection 23(2) of the Financial Administration Act, the World Trade Organization Pension Plan Remission Order remits amounts paid under the Income Tax Act of Can$115,481.00, as well as the Canadian dollar equivalent of US$11,942.00, to the World Trade Organization (WTO).

Objective

The objective of this Order is to fulfill Canada’s international commitments by remitting all income tax withheld from the WTO by Canada, or paid by the WTO to Canada, on investments made by the WTO’s employee pension plan (the Pension Plan) for the period commencing on January 1, 2000, and ending on December 31, 2011.

Background

The WTO is located in Geneva, Switzerland. Signed by 124 nations in 1994, Canada is a party to the Marrakesh Agreement (the Agreement), which officially established the WTO in 1995. Article VIII:4 of the Agreement provides that Members are to accord the WTO privileges and immunities similar to those stipulated in the Convention on the Privileges and Immunities of the Specialized Agencies, approved by the General Assembly of the United Nations (UN) on November 21, 1947 (the 1947 Convention).

The UN’s Charter states that “representatives of the Members of the United Nations and officials of the Organization shall similarly enjoy such privileges and immunities as are necessary for the independent exercise of their functions in connection with the Organization.” One of the purposes of the 1947 Convention is to set out what privileges and immunities these Members and officials are to be granted. The 1947 Convention grants the UN’s Specialized Agenciesfootnote 1 legal personality (much like corporations) which enables them to enter into contracts and conduct legal disputes in their own name. The 1947 Convention also grants the Specialized Agencies immunity from every form of legal process.

The 1947 Convention requires, among other things, that the UN’s Specialized Agencies, and their assets, income and other property, be exempt from all direct taxes (such as income and property taxes) that would otherwise be imposed upon them.

Although Canada is not a party to the 1947 Convention, the privileges and immunities set out in it were incorporated by reference into the Marrakesh Agreement. Canada enacted the World Trade Organization Agreement Implementation Act in order to fulfill the commitments it made under the Marrakesh Agreement. For these reasons, the privileges and immunities similar to those set out in the 1947 Convention apply to the WTO and its officials, as well as to representatives of WTO Members.

Implications

Between 2000 and 2011, the Pension Plan held investments in certain equities in Canada and received dividend payments. The corporations that paid the dividends to the Pension Plan withheld amounts as required by Part XIII of the Income Tax Act and then remitted those amounts to the Canada Revenue Agency. The amounts involved are Can$115,481.00 and US$11,942.00 over this 11-year period.

The WTO has informed Global Affairs Canada and Finance Canada that the Pension Plan is not a separate legal entity from the WTO. Instead, the Pension Plan operates as an administrative subdivision of the WTO itself. Although the assets of the Pension Plan are managed separately from other WTO assets, they legally remain WTO assets. Most international organizations form and operate their pension plans through a separate corporation or legal entity. However, given that the Pension Plan does not conduct its affairs through a separate legal entity, it is entitled to be exempted from income tax and other direct taxes in the same way the WTO is.

In 2011, the Pension Plan sold its Canadian assets and it has not made any further investments in Canada.

Through this Order, Can$115,481.00, as well as the Canadian dollar equivalent of US$11,942.00, would be refunded to the WTO for taxes that were withheld between January 1, 2000, and December 31, 2011, plus any penalties and interest paid upon such taxes. These amounts would be paid out of the Consolidated Revenue Fund.

Consultation

The WTO has been consulted and this Order will not impact any other stakeholder. Therefore, external consultations were not undertaken.

Contact

Stephanie Smith
Senior Director
Tax Treaties
Tax Legislation Division
Tax Policy Branch
Department of Finance
90 Elgin Street
Ottawa, Ontario
K1A 0G5
Telephone: 613‑240‑2021