. This means that their shares trade on the Toronto Stock Exchange and on an American exchange like the New York Stock Exchange. As few examples of this are the shares of the Canadian banks, BCE, CN Rail, and Rogers. If you buy or hold these shares in the U.S. side of your Canadian investment account, you will be paid the dividend in U.S. dollars. You will still be taxed as if it was in Canadian dollars.
The benefit is that the dividends would still be eligible for the dividend tax credit and no foreign withholding tax. Finally, you can move existing shares from the Canadian side of an account into the U.S. side of an account providing that your brokerage firm offers such an option. When you move shares it is not treated as a disposition because you are still the owner. Therefore the Adjusted Cost Base or ACB of the shares does not change. When you sell the shares you will still have to declare the proceeds in Canadian dollars even if you received them in U.S. dollars.
Bottom line is, with some planning, you can save a little bit of the exchange rate and get U.S. dollar income from Canadian companies.Nancy Woods is Portfolio Manager and Senior Investment Adviser with RBC Dominion Securities Inc. Visit her blog, “Nancy’s Notes” at