How a new U.S. tax bill could impact Canadian financial institutions

The U.S. government has proposed various legislative tax changes in a bill titled the One Big Beautiful Bill Act. One section of the bill—Section 899—is causing concern among investors, and questions remain as to how this bill will impact Canadian businesses, said New York partner Scott Semer in an interview with Bloomberg.

Section 899, which passed the House of Representatives on May 22, 2025, would respond to "unfair foreign taxes" by imposing increased U.S. tax rates on certain entities and individuals from "discriminatory foreign countries”, including Canada, the UK, France, and more.

Canadian businesses across sectors would be affected by the tax implications, but it’s unclear how Canadian companies with operations in the U.S.—particularly banks and other financial institutions—would be affected.

Scott says the impact would largely depend on the specific circumstances of the financial institution, including “how often they move their U.S. profits across the border to the Canadian parent company.”

“It’s definitely something that should be top of mind for the banks,” Scott said.

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