News release

Revenue Minister meets film industry representatives

Ottawa, January 22, 1999...The Honourable Herb Dhaliwal today met with representatives of the Canadian film industry. The purpose of this meeting was to review the current status of non-resident actor tax issues.

Following the meeting, Mr. Dhaliwal said "We have had an excellent exchange of ideas and opinions today regarding a number of industry-related concerns. I am convinced that everyone is interested in sitting down to work out a long-term solution to the issues. We have agreed that there are several avenues to explore, including an increase of withholding rates to more closely approximate tax obligations. As a result, I will ask my department to undertake a new round of consultations with the industry and the Department of Finance. While we are working toward a solution, Revenue Canada will continue with the approach taken in past years."

Mr. Dhaliwal also indicated that, as part of the consultations, he would be willing to raise issues of mutual concern with the appropriate officials in the United States. "We should not forget that the State of California does not follow the spirit of the Canada-U.S. tax treaty and this causes considerable problems for the Canadian film industry, particularly in British Columbia," he said.

Mr. Dhaliwal concluded by stating "Compliance issues are always difficult to resolve, but I am confident that the process we have put in motion today will allow us to address these matters, and help our ever-growing film industry to continue to expand in all regions of Canada."

- 30 -

For more information, contact:

Press Secretary
Minister of National Revenue
(613) 995-2960

05T/99