Retirement Abroad
Seeing the Sunsets

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Introduction

Canada is on the verge of a dramatic increase in the number of people reaching retirement. The first of the postwar baby boomers are now over 50. Over the next two decades, an unprecedented number of Canadians will reach the normal retirement age of 65. Many are already opting for early retirement.

The majority of retirees choose to spend the rest of their lives in Canada, often moving out of large urban areas to smaller regional centres; others opt for semi-retirement, staying active in their profession or trade on a part-time basis. However, a significant number decide to live in another country, either permanently or for part of each year.

Family or cultural ties are sometimes incentives to retirement abroad. Since Canadians come from all parts of the world, there are few nations that are not potential destinations for retirement. Some of the countries that are Canada’s major sources of immigrants are also the main retirement destinations. Lebanon, the United Kingdom, France and Germany are examples.

Those who retire abroad for other than family or cultural reasons tend to be clustered in countries that offer a combination of low after-tax living costs and a warm climate. In some cases, an existing Canadian expatriate community helps to mitigate the cultural isolation that can otherwise make life difficult. Countries in this category include Mexico, Costa Rica and some Caribbean island nations.

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Before You Go

Reasons for Retiring Abroad

Retiring abroad holds many potential pitfalls for those who choose a destination on the basis of a dream rather than sound planning. In general, those who consider only the financial benefits of moving overseas are more likely to experience disappointment than those who retire abroad for lifestyle or cultural reasons. Whatever your motives, careful research is essential, and the Internet makes it more practical than ever to carry out a detailed evaluation before you leave. If you are retiring as a couple, do this research together so that both of you fully understand what your choices involve. Recognizing and preparing for potential difficulties ahead of time is much easier than dealing with disappointment, or even a crisis, later.

Many Canadians who are living abroad for the first time are surprised at the cultural isolation they experience.

This can make the normal adjustments from a career to full-time leisure even more stressful. Before you go, make sure you understand the social environment where you will be living. Are you prepared to be in a minority and to be treated as a foreigner? Do you make new friends easily? Are you open to different ways of doing things? Can you handle a much slower pace of life? All these are questions you need to think about before deciding to retire abroad.

Coping with Culture Shock Get Involved Study some aspect of the local culture, such as art, music or sports. You will meet new people and get a stronger feeling of belonging. Fully understand what your choices involve. Recognizing and preparing for potential difficulties ahead of time is much easier than dealing with disappointment, or even a crisis, later.

Destination

There are various factors that you need to consider before making a final decision about where to retire. If possible, spend some time in the country where you are thinking of retiring before you make any major commitment. It is a good idea to go in the off-season to see if you are prepared to live there year-round.

If climate is one of your considerations, you can obtain reliable weather statistics on the Internet. Be sure to consider the situation throughout the year. Many countries with warm winters are hot and humid in the summer, and the cost of air-conditioning is often prohibitive.

Immigration regulations vary greatly from one country to another. Before you leave, make sure you understand all the regulations of the country you have chosen for retirement.

Immigration regulations vary greatly from one country to another. For example, although same-sex marriages are legal in Canada, they are not recognized in many countries. Homosexual activity is illegal some countries. Before you leave, make sure you understand all the regulations of the country you have chosen for retirement.

Finances

Taxation and the cost of living are related issues. Many developing countries lack the resources to collect taxes on foreign-source income, so they compensate by imposing high consumption taxes or import duties. Make sure you take into account all taxes, duties and fees, as well as the withholding taxes you will pay on income originating in Canada.

You also need to take into consideration how much it will cost you in terms of communications and travel for you to stay in touch with your family and friends in Canada.

Medical Advice

It is a good idea to have a medical checkup before you go. You also need to plan carefully for your health needs once you have left Canada. Many nations have health care systems that most Canadians would consider inadequate. The cost of medical care outside Canada can be extremely high. Arrange for adequate private health care coverage before you leave Canada. Take copies of your prescriptions and an initial supply of non-prescription medicines.

The Public Health Agency of Canada strongly recommends that you contact a travel medicine clinic or your physician six to eight weeks before departure. Based on an individual risk assessment, a health care provider can determine your need for immunizations and any special precautions that will help you avoid disease while abroad.

For more information or to obtain a list of travel clinics in your area, contact the Public Health Agency of Canada at (613) 957-8739 or consult www.travelhealth.gc.ca. A list of travel clinics may also be obtained from the Canadian Society for International Health at www.csih.org/csihindex.html or (613) 241-5785.

Find out well in advance of your departure date if you need any special vaccinations or preventive medications for such illnesses as yellow fever, typhoid, meningitis, Japanese encephalitis, hepatitis or malaria. An International Certificate of Vaccination may be a legal requirement to enter certain countries. You can obtain this information from your doctor, the Canadian Society for International Health, or the Public Health Agency of Canada’s Travel Medicine Program. You may need to start receiving your vaccination shots or taking medication six to eight weeks before you leave.

Infectious diseases that aren’t frequently seen in Canada occur and may even be widespread in other countries. Ensure that your immunizations—diphtheria, whooping cough (pertussis), tetanus, polio, measles, mumps and rubella—are up-to-date.

If you have a pre-existing medical condition that could present a problem while you are outside Canada, it is wise to wear a MedicAlert® bracelet. Through the MedicAlert® Foundation, your vital medical facts become part of a database that can be accessed 24 hours a day from anywhere in the world.

Documentation

Once you have decided to leave Canada and have chosen a destination, make sure your passport, any visas you require and other travel documents are in order, including those concerning your status in your new country.

Passports

A valid passport is essential. It will expedite immigration procedures and is useful for other purposes, such as opening bank accounts and cashing traveller’s cheques. If your passport will expire while you are abroad, make plans to renew it on time. Check with your host country’s embassy or consulate accredited to Canada for its rules and restrictions regarding passport validity and expiration.

You should also prepare a passport emergency kit in case your passport is lost or stolen. This should include:

• a photocopy of the identification page in your passport;
• the original of your birth or citizenship certificate;
• a copy of at least one current supplementary document to support your identity and the name to appear in the passport;
• the address and telephone number of the Canadian government office abroad in the country in which you plan to retire; and
• two recent photos meeting Passport Canada specifications.

Keeping this information in a safe place separate from your passport will save you time and money should you lose the originals. For added security, you may also want to leave a kit with a friend or relative at home.

If your passport is lost or stolen while you are outside Canada, report the loss or theft to the local police, obtain a copy of the police report, and immediately contact the nearest Canadian government office for a replacement. Make sure you get a copy of the police report or the report number. Before a new passport can be issued, you must complete an application form, produce written evidence of your Canadian citizenship (a birth or citizenship certificate and at least one current supplementary document to support your identity), present two recent photos, pay the required fee, and complete a “Statutory Declaration Concerning a Lost, Stolen, Damaged, Destroyed or Inaccessible Canadian Passport or Travel Document” (Form PPT 203).

If you have any questions about passports, consult the Passport Canada web site or call 1 800 567-6868.

U.S. Entry Requirements

The United States does not require Canadian citizens to have a visa if they plan to stay no longer than six months in the United States for recreational purposes. Those who wish to stay longer may apply for an extension of their stay, before the six-month period expires, to the nearest office of the U.S. Department of Homeland Security’s Citizenship and Immigration Services. They must maintain a residence in Canada to justify their non-immigrant status when they cross the border. To retire permanently in the United States, Canadians have to qualify as immigrants.

While U.S. authorities currently do not have a legal requirement that Canadians carry a passport, Foreign Affairs Canada strongly urges Canadians to carry a valid Canadian passport for all visits to the United States. Your Canadian passport is the best document to prove that you are a citizen of Canada with the right to return to Canada.

To enter or transit the United States, you may also be asked for proof that the trip is for a legitimate purpose and is of reasonable length, and proof of financial support while in the United States. Some Canadians may also be subject to the U.S. National Security Entry Exit Registration System (NSEERS). For more information, refer to our Country Travel Report on the United States and our booklet U.S.A. Bound, or contact the Embassy of the United States of America in Ottawa.

Dual Nationality

Canadian law permits a Canadian to have more than one nationality. However, your Canadian citizenship may not be recognized in the country of your other citizenship, and the authorities of that country may not recognize Canada’s right to provide you with consular assistance. This is especially true if you did not use your Canadian passport when entering that country. Where permitted by laws of the country in question, the Government of Canada encourages Canadians to use their Canadian passport when travelling abroad and to present themselves as Canadians to foreign authorities.

For more information, refer to our booklet Dual Citizenship: What Travellers Should Know. For information on entry requirements, consult our Country Travel Reports or call 1 800 267-6788 or (613) 944-6788.

Travel Arrangements

Canadians are generally familiar with the relatively low cost of travel to popular vacation destinations. However, these rates usually involve charter flights that originate in Canada and are available only on a seasonal basis. In addition, direct flights to Canada are not available from many popular destinations on a year-round basis.

Research Alternative Destinations Are you making realistic assumptions about weather, immigration regulations and access to services?

Many countries require foreign visitors to have a valid return ticket. This means a paid ticket with a return date within the time limits allowed by immigration authorities. A full-fare return ticket with an open travel date is generally acceptable, but an unused return portion of a charter flight ticket is not. You may need to purchase expensive one-way open tickets connecting through other countries to satisfy immigration authorities, even if your application for residency is pending. If you have to make an unplanned trip home for family or personal reasons, be prepared to pay several times the charter rate you may be accustomed to.

People with a Disability

Many countries do not provide access for people in wheelchairs or make allowances for those with special hearing, sight or other physical requirements. You may have to make special arrangements to obtain amenities that you expect as a matter of course in Canada. For more information, refer to the Frequently Asked Questions section of our Web site and check the Canadian Transportation Agency Web site.

Canadians with disabilities who hold a valid parking permit in Canada may take their permit with them for use in any of the 48 member and associate member countries of the European Conference of Ministers of Transport (ECMT). Be sure to check with local authorities there to determine entitlement. For more information, consult the ECMT or Transport Canada Web site.

Valuable Items

Before going abroad with valuable items, you can take advantage of a free identification procedure at any Canadian customs office. This service is available for items that have serial numbers or other unique markings. Alternatively, in certain circumstances customs officers may apply a sticker to an item, giving it a special number.

Jewellery often has significant value and can be difficult to identify. To make it easier to re-enter the country with jewellery, contact your nearest customs office to find out the steps to take before your departure.

Regulations for Pets

If you are planning to take your pet overseas, call the host country’s embassy or consulate accredited to Canada well in advance of your departure to obtain information on all the requirements. At a minimum, your pet will need a detailed health certificate and may need an import permit. Your pet may also be required to undergo a period of quarantine before or upon entering the country. If you return to Canada, you will have to follow similar procedures and present a certificate stating that your dog or cat is currently vaccinated for rabies. For additional information on dogs and cats, or for information on other pets (which often require an import permit before they can return to Canada), contact the Canadian Food Inspection Agency.

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Permanent Retirement Abroad

Retiring permanently to another country is an option for Canadians who are seeking a lower tax jurisdiction, do not intend to return regularly to Canada and can obtain adequate health care protection. If you are thinking of leaving Canada and taking up permanent residence in another country, you should be aware that this involves establishing a legal status within the other country that goes well beyond that of an annual tourist. You may seek either permanent residency or citizenship status, or both. Either may impose a variety of conditions and requirements, and you should be very clear about their implications. Among other consequences, Canadian consular officials in your country of destination may not be able to help you if you run into difficulties.

Immigration and Citizenship Issues

Country of Destination Regulations for Immigrants

Immigration regulations vary greatly from country to country, and it is essential that you understand them before you go. Most countries base their immigration system on three fundamental principles:

• employment;
• investment; and
• family connections.

Some countries also recognize retirees or people with a guaranteed minimum income as potential immigrants, but this is far from universal. For example, Mexico has a special category for retirees called inmigrante rentista, but the United States does not recognize retirement as a valid reason for establishing permanent residency in the country.

Countries that do recognize retirement as an immigrant category generally require proof of sufficient guaranteed income to support the retiree and any dependants. For example, Mexico requires a monthly income of about 17,460 pesos (400 times the minimum daily salary in Mexico City), and half as much again for each dependant. Costa Rica requires at least US$600 per month.

Regardless of your country of destination, you will need proof of Canadian citizenship. A valid Canadian passport is the best form of proof, and is often required for entry. Many countries require prospective immigrants to apply before they leave Canada; others allow individuals to enter as tourists and then apply to immigrate. You should carefully research these aspects of any destination you are considering for retirement.

Canadian Citizenship

Assemble Documentation Are all your travel documents, including passports and visas, in order? Do you know how to contact the nearest Canadian government office?

Many countries do not recognize a person's right to have more than one nationality (citizenship). If you were born outside Canada or, in some instances, if your parents were born outside Canada, you may be regarded as a citizen of the other country. In some cases, the laws of your country of origin may provide for the revocation of your citizenship if you become a citizen of Canada, but this is not necessarily automatic. You may have to take overt action, such as living on a permanent basis in Canada, consistently using a Canadian passport, and obtaining a visa when you travel to your country of origin. In some countries, you can formally renounce citizenship.

Canadian citizenship can be relinquished only through a specific act of renunciation. An individual has to apply to Citizenship and Immigration Canada and complete a form designed specifically for this purpose to begin the process of terminating Canadian citizenship.

Taxation Issues

Severing Canadian Residency

You cannot terminate your Canadian citizenship or residency simply by living in another country. To terminate your residency, you have to leave Canada on a permanent basis, sever your residential ties with Canada and establish residential ties in the country you are moving to.

The Canada Revenue Agency (CRA) determines non-resident status on a case-by-case basis, so consult a tax advisor about the necessary steps you should take. Retaining Canadian residency does not necessarily put you at a disadvantage. Depending on your situation, your actual tax liability could be lower than the non-resident withholding taxes imposed on your Canadian pensions and investment income.

If you live outside Canada and have severed your residential ties with Canada, you will be considered a non-resident of Canada for taxation purposes. Residential ties are the connections that you may have with Canada while you are living abroad. Examples of these are:

• residence such as your principal residence or house rented on a short-term basis;
• spouse and/or dependent children who remain in Canada; and
• personal property such as furniture, automobiles, bank accounts, credit cards, driver's licences and health plan memberships, and social ties such as club or professional memberships.
  

A regular pattern of visits to Canada can be regarded as evidence of continued residency, especially if you have family connections in the country. If you retain ownership of your home, you should lease it on a non-revocable basis; if you have ongoing access to it, it may still be regarded as your residence.

Plan Your Finances Have you allowed for Canadian withholding taxes on your pension income? Will you be subject to double taxation in your country of destination? Have you arranged to file required tax returns in Canada? Have you made allowances for additional communications and travel costs, and import duties?

If you choose to, you can submit Form NR73, "Residency Determination for Leaving Canada," to the CRA for their opinion of your residency status. Further information is available from the Agency's Interpretation Bulletin IT-22, Determination of an Individual's Residence Status, and its special release.

Estate Tax

Canada does not levy an estate tax. But many other countries do, including the United States, where the maximum tax rate in 2003 was 49 percent. For more information, contact the Internal Revenue Service of the U.S. Department of the Treasury. If you are going to become a resident of a country with an estate tax and you have substantial assets, you should consult a tax advisor in that country. You may need to draw up a new will or make other arrangements.

Health Care Issues

Canadian Provincial Health Care Programs

Canadian provincial health care programs provide limited coverage during temporary periods of absence from Canada. Typically, the coverage extends for three months. The level of benefits, however, may be inadequate to cover costs in some locations, especially the United States. The reason for this is that the payments allowed for out-of-country treatment are comparable to the fees paid by the provincial plans to health care providers in Canada. These fees reflect the resources of Canada's public health care system. In some cases, a foreign hospital may charge several times more than your provincial program will allow. It is therefore essential that you arrange for private health care insurance for when you are residing abroad.

Provincial health care programs terminate eligibility after periods of prolonged absence from Canada, typically six months. In most cases, you must be physically present in your Canadian province of residence for 183 days of each calendar year to maintain your health care coverage. The rationale for this requirement is that, when you are out of the country, you are not paying provincial sales tax or the Goods and Services Tax, both of which help to pay for medical care.

If you lose your provincial health care coverage, there may be a waiting period before it is reinstated when you return to Canada following an extended stay abroad. Certain insurance plans for Canadians travelling abroad automatically include coverage for this waiting period. If your "out of Canada" plan does not include this coverage, there are plans available for visitors to Canada that may be purchased to provide coverage during the waiting period. In general, these plans must be purchased immediately on your return to Canada. It is important to note that most "visitor" plans purchased following a return to Canada will exclude any pre-existing medical condition.

Arrange Health-Care Coverage What will you do if you have an accident or become ill? Are you prepared for emergency repatriation? Have you checked the provisions of your provincial health care plan?

In some provinces, you can avoid the requalification period by waiving your right to coverage while you are out of the country. This way, you will be covered immediately upon your return, even though you were out of the country for more than six months. Before leaving Canada, check with provincial health care authorities to make sure you fully understand how your health care coverage will be affected.

Health Care Programs in Your Country of Destination

Health care is a serious issue for Canadian expatriates because few countries have systems that are as comprehensive or as inexpensive for the user as Canada's. Some developed countries have comprehensive health care plans that will cover you, after a waiting period, if you immigrate. But the countries that are the most popular destinations for Canadian retirees generally do not offer comparable programs.

Private health care in the United States presents particular problems because the health management organization (HMO) system that covers the majority of Americans is generally restricted to U.S. residents with a social security number. Even then, unrestricted coverage usually ceases at age 65, when the Medicare system begins its coverage.

Many developing countries provide free universal medical care to citizens and permanent residents. But most Canadians living in these countries seek private medical care, which many consider to be of a higher quality and which involves shorter waiting periods. Private health care facilities are fairly advanced in most countries, and a private hospital or clinic will usually see you immediately, for a fee approaching the cost of similar services in the United States. Faced with these trade-offs, most Canadians choose the private alternative and make sure they are well covered by insurance.

Private Health Care Insurance

Coping with Culture Shock Learn the Language Take time to learn the local language. It will make your daily life easier and will signal to the local people that you want to be part of their community. Start with a few phrases and then systematically expand your vocabulary.

There are two types of private health care insurance. Supplementary insurance provides supplementary benefits for people who are covered by a Canadian provincial health care plan (see the Supplementary Insurance section). Replacement insurance provides coverage for those who are ineligible for provincial plans.

Replacement Insurance

If you will be living outside Canada for long enough to lose your provincial health care coverage, you will need full replacement coverage and not just supplementary benefits. When purchasing replacement coverage, make sure the provider understands that you will no longer be covered by your provincial plan.

Full replacement insurance is less readily available than supplementary insurance, but there are a number of companies that provide insurance specifically designed for expatriates. An Internet search will generally produce a number of options. Enter key words such as "expatriate health insurance," "worldwide insurance," or "medical insurance abroad." You should arrange for replacement insurance before you leave, but be aware that you may not be able to obtain appropriate coverage from a Canadian company.

Most policies place some limitations on pre-existing medical conditions and have age restrictions. Further, many insurers reserve the right to repatriate you to your home country in the event of a major ailment. If you are no longer covered by your provincial plan, ensure that the replacement plan you are considering either does not require repatriation back to Canada or will guarantee that if you are repatriated, full coverage will apply in Canada during the waiting period for reinstatement of provincial benefits.

Some plans do not require repatriation in the event of a major ailment, offer limited coverage for pre-existing conditions, are available to persons over 75, or offer a combination of these features. However, costs can be high—US$10,000 a year for each covered person is not unusual at the higher end of the age scale.

When considering replacement insurance, carefully assess your own situation, taking into account your age, any pre-existing medical conditions and your intentions in the event of a major or long-term illness.

Real Estate Issues

For many Canadians, owning their own home is part of their dream of an ideal retirement. This is also a practical issue since good rental accommodation is expensive in many popular destinations, especially as furnished homes are often the norm for expatriates. While it is prudent to rent for a time before you decide on a particular location, purchasing a condominium or a house is an option you may want to consider.

Property Ownership

Purchasing property in some countries can be risky because of the difficulty of obtaining clear title. Careful research and professional legal representation are essential to avoid falling victim to unscrupulous operators. In some countries, you can also buy title insurance.

The right of foreigners to purchase certain property is restricted in some countries. In Mexico, for example, Canadians and other foreigners require special permits to purchase land. They cannot own land within a 100-km zone along the national borders or a 50-km zone along the coasts. In addition, they cannot own mineral or water rights. They may, however, set up a bank trust called a fideicomiso, with certain restrictions, to hold property for them.

It is difficult for foreigners who are not locally employed to obtain conventional mortgage financing in most countries. If you still have Canadian residency status, your Canadian bank may extend a personal loan based on your Canadian assets and your credit rating at home, but in general the terms are not nearly as favourable as they are for mortgages.

Coping with Culture Shock Travel Visit other parts of the country in which you are living. This will raise your awareness of local history and culture and make you feel more at home.

Condominiums

In principle, condominiums offer many advantages to retirees. External maintenance is handled on a shared basis, and it is relatively safe to leave units unoccupied for fairly extended periods. On the other hand, condominiums can entail serious risks in countries that have little experience with administering the relevant laws. You cannot assume that condominium bylaws drafted by property developers will actually be enforceable. Indeed, some restrictions, such as those prohibiting occupancy by children, may contravene local laws.

Condominiums in developing countries tend to be occupied by foreigners from many parts of the world, who may have very different ideas from yours about the use of common property. Many condominiums have rental units available, and leasing one before buying is a good way to check out not only the property, but also the community.

Real Estate Agents and Lawyers

Few developing countries regulate real estate agents and lawyers as rigorously as Canada does. In most parts of Latin America and the Caribbean, for example, real estate agents require no formal qualifications or training and are not prevented from promoting sales in which they have an undisclosed personal interest. Similarly, regulations governing conflicts of interest by lawyers may be much less stringent than they are in Canada.

Moreover, the authorities may not take complaints from foreigners seriously, especially if the agent or lawyer is an established member of the local community. You should therefore be very careful about accepting claims regarding property that you have not checked out yourself. Such claims as "beach access" may turn out to be fictitious, and you could find yourself without any recourse.

Do not sign anything that has not been carefully examined by your own lawyer. If possible, try to retain a Canadian lawyer with expertise in the laws of your country of destination. If you have trouble locating an English-speaking local lawyer, the nearest Canadian government office can provide you with a list of reputable lawyers who speak English. You can also seek out other Canadians in the area and ask for a recommendation.

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Seasonal Retirement Abroad

Many Canadians for whom the principal motivation for retiring abroad is climate elect to maintain their Canadian residency and spend several months of each year in a warmer place. The southern United States is a popular destination for these so-called snowbirds because it offers the advantages of proximity and cultural affinity. Florida and Arizona, in particular, have substantial winter populations of Canadians, as do a number of other sunbelt states.

Bermuda and the Bahamas offer the advantage of proximity for Canadians who can afford the higher cost of living in those countries. Retirees seeking a lower cost of living often choose Mexico, Costa Rica or other places in Latin America and the Caribbean. Alternatively, you may decide to spend up to several months in a Mediterranean country such as Tunisia, Spain or Greece. Finally, destinations in the southern hemisphere, such as Australia, New Zealand and Chile, while farther away, offer snowbirds the possibility of an endless summer.

Immigration and Citizenship Issues

Country of Destination Regulations for Visitors

Retirees who live in another country for less than six months each year can simply visit that country as tourists. Most countries welcome Canadian visitors who come for recreational purposes, and a valid passport is usually the only requirement.

Mexico, for example, is open to seasonal Canadian visitors. Canadian tourists staying up to 180 days do not need to obtain a visa. However, you must complete an entry form, called a Forma Migratoria de Turista, or FM-T, available from airlines or at any port of entry. An immigration official will determine the number of days you will be allowed to remain in Mexico and will stamp the form accordingly. Do not assume that you will be granted the full 180 days. With the permission of local immigration authorities, you can get an extension to a maximum of 180 days. The authorities may demand this form at any time, so carry it (or a copy) with you at all times. You must surrender the original on departure.

Many countries have more stringent limitations on the length of time visitors may stay. For example, Costa Rica allows visitors to stay for up to 90 days. Some countries issue initial tourist visas for as little as 30 days. In some cases, you can lengthen your stay by applying for an extension from within the country, but this is not always possible. In Mexico, for example, extensions beyond the 180-day limit are not permitted, barring exceptional circumstances such as hospitalization and a physician certifying that you are too ill to travel.

Many Canadians are reluctant to settle in a country where they have the right of entry only as tourists, especially if they are planning to purchase a home. Some people deal with this issue by applying for residency status, even though they intend to maintain their Canadian residency. In Canada, residency is a matter of fact, not law, whereas in many other countries a resident is a person who has a resident visa or residency permit but does not actually reside in that country for a significant time. Taking out legal residency in another country does not interfere with your Canadian residency.

Holding resident status in the country where you maintain your winter home eliminates limitations on the length of your stays there. It also gives you reasonable assurance that you will be allowed entry, usually without a return ticket. In some cases, you may also be allowed annual duty-free exemptions.

Voting while away from Canada

Canadian citizens can, under certain conditions, vote in federal elections when they are temporarily living or travelling outside Canada. To vote by special mail-in ballot, you must first register by sending an Application for Registration and Special Ballot form to Elections Canada. Information on how to register and vote by special mail-in ballot is available on the Elections Canada Web site. During an election, all registered electors will receive a voting kit with instructions. For more information, contact Elections Canada.

Taxation Issues

Maintaining Canadian Residency

Provide for Return Travel Do you have prepaid return tickets with open return dates?

The concept of Canadian residency is a taxation issue and not an immigration matter. If you live outside Canada for part of the year and keep residential ties with Canada, you will be considered a factual resident of Canada. Once you have established a home and have been employed in Canada, you cannot lose this residency status simply by leaving the country. You must permanently and overtly sever your Canadian connections and declare your departure on your income tax return. Snowbirds, therefore, do not have to worry about accidentally forfeiting their Canadian residency, regardless of their immigration status.

Taxation

People who spend part of the year in another country but maintain their residence in Canada pay Canadian income taxes as if they had never left. Nonetheless, taxation issues arise if the other country imposes its own taxes. If you spend your winters in a country that has a tax treaty with Canada, such as the United States or Mexico, you are protected from double taxation, even though you may have to file tax returns in both countries. If you are spending part of each year in a non-treaty country, you should do your own research to find out what your tax situation is.

The principal question for you, as a retiree, is whether your Canadian-source pension and investment income will be taxed. Some countries impose taxes on income from the rental of your home in the off-season.

Canada has tax conventions with many countries. For more information, visit www.cra.gc.ca/tax/nonresidents/treaty-e.html . A helpful pamphlet for Canadian snowbirds in the United States, publication P151 entitled Canadian Residents Going Down South, is also available from the Canada Revenue Agency .

U.S. Tax Returns

The U.S. tax situation is worthy of special mention because parts of the United States are so popular as destinations for Canadian snowbirds. Under certain circumstances, Canadian residents who spend part of the year in the United States may have to file U.S. tax returns. People who are not U.S. citizens are considered aliens. An alien may be classified as resident or non-resident. In general, non-resident aliens are required to pay tax only on certain U.S.-source income. Resident aliens are liable for tax on their worldwide income. The requirement to file a tax return is based on the person's income, age and marital status.

Regardless of the protection provided by the Canada-United States tax treaty, it is important for you to know whether you are considered resident or non-resident by the U.S. Internal Revenue Service (IRS). This is determined according to a calculation known as the "substantial presence test," which is based on a weighted average of the number of days you spend in the United States over a three-year period. You will be considered a U.S. resident for tax purposes if you meet the substantial presence test for the calendar year.

To meet this test, you must be present in the United States for at least:

1)	31 days during the current calendar year; and
2)	183 days during the three-year period that includes the current year and the two years immediately before that, counting:
	all the days you were present in the current year; one-third of the days you were present in the first year before the current year; and one-sixth of the days you were present in the second year before the current year.
Even if you meet the substantial presence test, you may be treated as a non-resident alien if you:
1)	are present in the United States for fewer than 183 days in a tax year;
2)	maintain a tax home in a foreign country during the tax year; or
3)	have a closer connection to a foreign country.

To demonstrate that you maintain a more substantial connection to another country, you have to file IRS Form 8840, "Closer Connection Exception Statement," before the end of June each year; otherwise, you may be treated as a U.S. resident. If you qualify, you may remain in the United States for up to 182 days without becoming a resident alien.

If you become a resident alien, you must file a U.S. tax return based on worldwide income. If you are a non-resident alien, you may have to file a tax return if you owe taxes on U.S. income or if you have engaged in a trade or business in the United States. However, you may be eligible for relief from U.S. taxes under the Canada-United States tax treaty, since you will also have to declare that income and pay appropriate taxes in Canada.

To file a U.S. tax return, you must have a U.S. social security number or apply for an IRS individual taxpayer identification number. Do not use your Canadian social insurance number on U.S. tax forms.

For further information, contact the Internal Revenue Service of the U.S. Department of the Treasury, consult their publications listed in the For More Information section, or check IRS Form 8833, "Treaty-Based Return Position Disclosure Under Section 6614 or 7701(b)."

Assess Your Reasons for Leaving Are you ready to live in a different culture?

Health Care Issues

Canadian health care is mainly a provincial matter, and each province's health care plan has its own residency requirements. A typical requirement is that you are physically present in the province for at least six months a year. These requirements are not related to residency for tax purposes. You can lose your entitlement to provincial health care and still be liable for both federal and provincial income taxes.

If you lose your provincial health care coverage, you may have to wait three months to requalify for coverage after your return. Check with provincial health care authorities to find out the specific conditions that will apply to you. Ask for information on the length of time you can be out of the country without losing your health care coverage.

Supplementary Insurance

Even if you plan to return to Canada soon enough to avoid losing your provincial health care coverage, it is still advisable to have private health care insurance, mainly to cover the extra cost of medical services received abroad.

Supplementary insurance offers benefits for people covered by a Canadian provincial health care plan. This type of insurance is relatively inexpensive since it covers only unexpected short-term health problems. You are expected to return to Canada for treatment of pre-existing medical conditions or long-term health problems. Most of these policies include coverage for emergency evacuation to Canada; in many cases, evacuation is mandatory for serious problems. You can claim the cost of foreign medical expenses, including insurance premiums, as an income tax deduction.

You should obtain supplementary insurance before you leave Canada. Check the following points when purchasing such health care insurance:

• Does the insurer require that your government health insurance plan remain in effect?
• Does the insurer have an in-house worldwide emergency hotline you can call if you are in trouble? Is this hotline open 24 hours a day, seven days a week? Is the operator multilingual? Does the insurer have nurses or physicians on staff?
• Are foreign hospital and related medical costs paid directly or are you required to pay up-front and seek reimbursement later?
• Will the insurer provide a cash deposit in advance if a hospital requires it?
• Does the insurance cover medical evacuation to the nearest place with proper medical care or to Canada, along with any required medical escorts?
• Does the plan offer fully insured evacuation and assistance services, or will you be required to absorb these costs?
• Are pre-existing medical conditions covered? If such conditions exist, notify the insurer and get an agreement in writing that you are covered for these conditions. Otherwise, you could find your claim "null and void." If pre-existing medical conditions are not covered, carefully consider the cost and availability of services related to your condition in the destination country.
• Does the insurance cover costs associated with a death abroad, including the return of remains to Canada?
• Does the policy cover return visits to Canada or other travel during your stay abroad? Would supplemental coverage be required?
• If you return to Canada, will the policy cover any necessary waiting period before your government plan is renewed, or will a separate plan be required?

Keep a supply of insurance claim forms handy. Always carry a copy of your insurance policy with you, along with the telephone numbers of the insurer's service centre. This information should also be left with a friend or relative at home and a friend or relative in the country where you will be retiring. If you pay for medical attention out of your own pocket, obtain a detailed invoice from the doctor or hospital. Most insurance companies will not accept copies or faxes. Keep a copy of the submitted documents for your files.

When you arrive in the destination country, make a point of locating the nearest reputable clinic or hospital. Don't wait for an emergency—it may be too late! The local Canadian government office will be able to provide information on clinics and hospitals (for a list of Canadian government offices abroad, consult www.voyage.gc.ca/alt/canoffices.asp or the publication Bon Voyage, But...).

Other Insurance

Some travellers’ insurance packages also cover lost or stolen luggage and flight cancellations for medical or other reasons. Planning to drive while abroad? Keep in mind that most countries have laws that require drivers to have adequate insurance.

Real Estate Issues

Foreign Property Reporting Rules

Canadian residents who own property abroad are required to report their foreign assets to the Canada Revenue Agency. This provision was designed to ensure that residents declare capital gains and interest on foreign assets on their Canadian income tax returns. The regulations were originally introduced in 1996, but implementation was delayed, and the first reporting deadline was April 30, 1999. All Canadian taxpayers with foreign property valued at more than $100,000 are required to report their holdings, and there are substantial penalties for non-compliance.

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Staying in Touch

No matter how attractive a foreign destination may seem at first, most expatriates find that they are more dependent than ever on contact with family and friends. Others find that news from home is a stabilizing influence, at least while they are becoming accustomed to being foreigners in another country. However, you should not assume that telecommunications and mail systems will be as efficient as they are in Canada.

Telephone

Coping with Culture Shock Stay in Touch Maintain contact with family and friends back home. Sharing your experiences and problems can help you adapt to the local environment.

Canada has one of the best telecommunications systems in the world; the service available in many other countries is unreliable and expensive in comparison. You should not assume that you will be able to obtain a telephone line right away. Some countries require large cash deposits, especially from foreigners. The wait for a line can sometimes run into months, and second lines for faxes or Internet connections may be very difficult to obtain. You may wish to use the Canada Direct service if it is available.

Mail

Mail systems tend to be slow and unpredictable in most developing nations. Another fact to be borne in mind is that magazine subscriptions usually cost two or three times more outside Canada and the United States. In many cases, it is more practical to have your mail delivered to a forwarder in Canada or the United States and have it sent to you periodically by courier.

Internet

Access to the Internet is now widely available around the world but is limited by the quality of local telephone lines and by satellite bandwidth. Be prepared to make repeated calls to get a connection, and do not expect to be able to handle the large volume of information that you would in Canada. You can obtain a list of Internet providers at http://thelist.internet.com.

Television and Radio

Coping with Culture Shock Pursue Favourite Activities Spend time enjoying your favourite music or hobbies. Doing things that remind you of home can boost your spirits and help you adjust to living in a different culture.

Canadian news and public affairs programs are available on the DirectTV direct-to-home satellite system, which is based in the United States. These programs are also accessible via satellite in many parts of Latin America and the Caribbean, and in some other areas of the world. Canadian radio is available in many parts of the world via the CBC short-wave service, Radio Canada International. Where there is sufficient local bandwith, CBC programs can also be heard over the Internet.

Crime and Safety

Your Canadian citizenship does not exempt you from local laws and regulations. When you are staying in a foreign country, familiarize yourself with the way of life there. If you do find yourself in trouble, contact the nearest Canadian government office immediately. However, keep in mind that Canadian officials may not be able to help you at all if you have acquired local status, such as citizenship.

The following safety tips can maximize your chances of having a safe journey abroad:

• Watch your luggage and make sure it's locked.
• Never take anything, even an envelope, across a border for someone else.
• Choose your travelling companions wisely. Do not pick up hitchhikers. Though you may not be carrying anything illegal, your companions might be and you could be implicated.
• Know where you are and where you are going at all times. Carefully plan road trips in advance.
• Keep valuables out of sight, and never leave them in a parked vehicle or in your room. Use the safety deposit box at your hotel.
• Do not display large amounts of cash or wear expensive jewellery. Use a money belt or a case with hidden sections to conceal them.
• Do not carry your passport, tickets, identification documents, cash, credit cards and insurance papers together. Keep them separate so that in the event of theft or loss you do not lose everything.
• Make copies of your credit card and ATM numbers so they can be cancelled quickly.
• If you use an ATM, do so during business hours at a location inside a bank, supermarket or large commercial building.

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Consular Assistance

The Consular Affairs Bureau is committed to providing assistance while you are abroad. It has over 270 offices worldwide where consular officials are ready to help you if needed. In some instances, there may be a fee for services.

Consular staff can:

• notify your next of kin, with your authorization, regarding an accident, imprisonment or death, keep them informed, and let them know whether-and how-they can help;
• contact relatives or friends on your behalf and ask them to send you emergency funds, at your request;
• help you during emergencies such as natural disasters or civil and military uprisings;
• help locate missing persons;
• assist with medical emergencies and provide a list of local English-speaking doctors (if available);
• direct you to sources of information about local laws, regulations, cultural customs and visas;
• replace passports (fees apply). However, not all offices are authorized to issue regular passports;
• try to ensure equitable treatment under local laws if you are arrested. At your request, they can inform relatives and friends about your arrest and try to ensure that legal rights and processes are extended to you consistent with the standards of the host country;
• provide a list of local English-speaking lawyers and information about local legal aid;
• in the event of a crime or death, should there be evidence of suspicious circumstances, they may be able to request a local investigation;
• offer information on the cost of cremation and burial locally, as well as the cost of returning personal effects and remains to Canada; and
• supply a list of local funeral directors.

However, consular staff cannot:

• make travel arrangements;
• pay hotel, medical, travel or other bills or expenses;
• provide compensation or reimbursement for delayed or cancelled travel;
• transfer funds;
• store personal effects or search for lost items;
• help locate and rent apartments;
• obtain visas for other countries;
• acquire local permits or licences;
• investigate a crime or a death;
• get you out of jail;
• post bail, pay lawyer's fees or pay fines;
• give legal advice or choose, recommend or pay for a lawyer;
• accept mail;
• pay for burial, cremation or repatriation costs of a deceased individual;
• provide a tracing service for persons who have simply lost contact with family or friends; pay your pensions or arrange your social security payments;
• perform marriage ceremonies; or
• intervene in private legal matters.

Emergency Consular Services

Canadian government offices abroad offer 24-hour emergency assistance. Outside of office hours, your telephone call will automatically be transferred to a consular officer in Ottawa or you will be asked to leave a message. In either case, there will be a prompt response. If you leave a recorded message, make sure that it is clear and that you leave a complete telephone number or contact address. In addition, you can contact Foreign Affairs Canada in Ottawa at (613) 996-8885. You may wish to use the Canada Direct service if it is available in the country you are calling from.

Registering at a Canadian Government Office Abroad

It is recommended that you register at the nearest Canadian government office abroad. This will help us contact you in case of an emergency. Registration is voluntary, and the information you provide is protected and used in accordance with the provisions of the Privacy Act. You can register on-line.

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Returning to Canada

If you have established any form of legal status in another country, you may be expected to obtain departure clearance before returning to Canada. Some countries, for example, require a statement from tax authorities that you have met all your obligations; others terminate residency permits if you leave the country for an extended period. These rules are typically enforced by inspection of your travel documents on departure.

You may have to pay an airport departure fee in local currency when you leave; you should also be prepared to pay departure fees in any countries that you pass through on your way back to Canada.

With regard to bringing goods into Canada, there are no special rules for Canadian residents who go south for the winter. Everything acquired abroad must be declared, including any repairs made to your vehicle while you were away. It is advisable to keep receipts for any goods acquired outside Canada.

Canadian residents who have been away from Canada for 24 hours or more can bring back goods worth up to C$50 without paying duties or taxes. However, you must have the goods with you upon arrival. If you bring back goods worth more than C$50, you will have to pay full duty on all of them. After 48 hours away the limit is C$200, and after seven days away it is C$750. If the value of goods exceeds the $200 or $750 limit, you will have to pay duties and taxes on the surplus.

If you have been away from Canada for 48 hours or more, these goods can include alcoholic beverages and tobacco products as follows: up to 1.14 litres (40 oz.) of liquor, or 1.5 litres (53 oz.) of wine, or a case of 24 bottles or cans of beer or ale, each containing 355 ml (12 oz.). As for tobacco, you may bring back up to 200 cigarettes, 50 cigars or cigarillos, 200 tobacco sticks and 200 grams (7 oz.) of manufactured tobacco. Tobacco products included in a personal exemption are still subject to a minimum duty, unless they are marked "CANADA-DUTY PAID—DROIT ACQUITTÉ." Provincial age restrictions apply to liquor and tobacco products. You must have the goods with you upon arrival.

Coping with Culture Shock Make Friends Make an effort to meet others. Interacting with local people will help you learn about their culture and will demonstrate your commitment to becoming part of the community.

Canada imposes special restrictions on a variety of imported goods. If you are considering importing meat or dairy products, weapons, plants, vehicles, exotic animals or products made from their skins or feathers, contact the Canada Border Services Agency (CBSA) beforehand for guidance. It is illegal to bring obscene materials, child pornography or hate propaganda of any kind into the country.

The Government of Canada has introduced the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Under this new legislation, there are no restrictions on the amount of money that you can bring into or take out of Canada. However, you now have to report to a customs officer amounts equal to or greater than C$10,000 that you are bringing into or taking out of Canada.

For more information, refer to the CBSA brochure entitled Crossing the Border With $10,000 or More?

Depending on how long you have resided outside Canada, on your return you may be subject to special import provisions for household items and personal belongings. Details of these provisions can be found in the CBSA brochure Moving Back to Canada.

If you have any questions about what you are allowed to bring back, contact the Canada Border Services Agency or call your local Border Services office.

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Other Useful Web Sites

Elections Canada
www.elections.ca
Tel.: 1 800 463-6868 (in Canada and the United States)
or (613) 993-2975

Canadian Snowbird Association
www.snowbirds.org

Quebec government portal on programs and services for Quebec seniors
(Site in French only, but includes link to publication entitled For People 55 and Over)
www.55ans.info.gouv.qc.ca

Seniors Canada On-line
www.seniors.gc.ca

U.S. Tax Information
www.irs.gov

Consular Services

Foreign Affairs Canada
www.fac-aec.gc.ca

Consular Affairs Bureau
www.voyage.gc.ca

General
Tel.: 1 800 267-6788 (in Canada and the U.S.) or (613) 944-6788
TTY: 1 800 394-3472 (in Canada and the U.S.) or (613) 944-1310
E-mail: voyage@international.gc.ca

Emergencies
Tel.: (613) 996-8885
(call collect from abroad where available)
E-mail: sos@international.gc.ca

The Consular Affairs Bureau publishes, in both official languages, a series of safe travel brochures.

Country Travel Reports provide information on safety and security conditions, health issues and entry requirements for over 200 travel destinations. This information is also available by telephone: 1 800 267-6788 (in Canada and the U.S.) or (613) 944-6788.

Canadian government offices abroad
www.voyage.gc.ca/alt/canoffices.asp

Foreign government offices accredited to Canada
www.voyage.gc.ca/alt/representatives.asp

Passport Canada
www.ppt.gc.ca
Tel.: 1 800 567-6868 (in Canada and the U.S.)
TTY: 1 866 255-7655

Visit our For More Information page.

 

 

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