Canada has registered reservations on all MLI provisions other than the minimum standards and binding mandatory arbitration

Canada and 67 other countries signed the Multilateral Convention (the ``MLI``) on June 7, 2017. 10 other countries have expressed their intention to sign the MLI.

Canada also provided the OECD with a provisional list of countries it wishes to connect with under the MLI, so that its bilateral income tax conventions with those countries will be modified accordingly. The list has 75 counties which are, according to the Backgrounder released by the Department of Finance on June 7, 2017, "almost all countries and jurisdictions that were members of the ad hoc group that developed the Multilateral Convention and that have a bilateral tax treaty with Canada."

However, the Backgrounder also notes that "for the modifications to apply to a tax treaty listed by Canada, Canada's treaty partner must also ratify the Multilateral Convention and list its tax treaty with Canada." Such intentions of all the countries who signed yesterday have been published by the OECD.

Art. 28(7) and 29(4) of the MLI contemplate that at the time of signing, the signatories are to provide a provisional list of reservations and notifications, which Canada has done. As noted in the Backgrounder, Canada is not adopting, at this time, any part of the MLI other than the minimum standard provisions and binding mandatory arbitration (although "Canada will continue to assess whether to adopt these [other] provisions at the time the Multilateral Convention is ratified.") Thus, it is adopting (with willing partners) at this time the treaty shopping rules (and is opting for a principal purpose test, not a limitations-on-benefits Article) as well as binding arbitration and beefed up mutual agreement procedures and a general statement of intent ‎to prevent treaty shopping. (The Backgrounder goes on to state that "Where appropriate, Canada will, over the longer term, seek to negotiate, on a bilateral basis, a detailed limitation of benefits provision that would also meet the minimum standard.")

Canada did not list the US, Germany and Switzerland. The US has not adopted the MLI and Canada, contemporaneously with the signing, announced bilateral negotiations with the latter two.

Nat Boidman and Neal Armstrong. Go to OECD BEPS - Canadian Adoption to see ``Department of Finance, Status of List of Reservations and Notifications at the Time of Signature,`` 30 May 2017 and Department of Finance, ``Backgrounder: Impact of Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting,`` 7 June 2017 .