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LEGAL REPORT: TAX LAW the people I've talked to — tax lawyers — are quite happy about it. There will be a little bit of a loss of business, because people will be able to do cross-border without having to consult tax lawyers, but very few lawyers I speak to who work in that area are very upset about that, be- cause it wasn't the best work. "As for increased competition for the securitization markets: initially, when the announcement was made that the withholding taxes were to be eliminated, the financial community felt that the Canadian banks were going to be very unhappy about the additional compe- tition and increased foreign bank pres- ence in Canada." Lorito adds that he feels Canadian banks may actually welcome the compe- tition as it might broaden and improve the market while increasing the free flow of capital across borders. While it's too early to predict what the effects will be on Canadian lawyers who specialize in securitization, Penny says, "For a U.S. bank the question is would they use their U.S. counsel mainly in or- der to help them with negotiation and documentation of that loan, and only use Canadian counsel for the limited things that have to be done in Canada, registering security and so on? Or would they use Canadian counsel for the whole transaction? I suspect it'll be a combina- tion of the two." As far as whether many securitization specialists will see a decreased caseload, Penny adds: "I think it's fair to say that people who work in traditional bank fi- nancing, particularly on the lender side, might. I don't think it's many people, but there are some financial institution lawyers that had a significant practice in structuring loans that qualified for the limited withholding tax exception that we had, and that work is no longer nec- essary. The question would be can they take advantage of the opportunity to work for foreign lenders on a wider va- riety of loans. I think it's a combination of new opportunities and possible op- portunities for foreign law firms to take some of the work that previously had to be done by Canadian lawyers." Lorito muses that, even when elimi- nating the withholding tax regime, there's still a lot of tax work to go around. "It wasn't a major part, I don't think, of anyone's practice any more — maybe 10 to 20 per cent. It's something they could probably fill up quite easily and be happy about it. It's a chance to do more interesting things. We'll notice a little bit of a loss of work, but it won't make a significant dent." One of his colleagues at a rival firm DD CL HRHLFC Print 01 ad 1/9/08 2:28 PM Page 1 summed it up best when she exclaimed that they'll be so happy when they've completed their last 212(1)(b)(vii) loan: "We've got the champagne on ice here and we'll open it up when we've done our last one!" Dye & Durham's Printing & Graphic Services We are a full service FSC certified printing company offering production facilities capable of full colour printing, digital printing, embossing, laser compatible thermography, creative design and typesetting. Responsible Forest Management Cert no. SW-COC-002302 Save 20% on Full Colour Digital Printing when you place your first order with Dye & Durham's U C C Printing & Graphics Services and choose an FSC certified stock. Conditions apply. Please quote RXFLD when placing your order. yourONE source supplier for • Office & Furniture Products • Corporate Promotional Products • Printing & Graphic Services • Law Office Essentials • Corporate Supplies • Search & Registration Services U PREFERRED SUPPLIER PREFERRED SUPPLIER E E OFFICE & FURNITURE PRODUCTS dyedurham.ca • 1-888-393-3874 • Fax: 1-800-263-2772 www. C ANADIAN Law ye rmag.com FEBRU AR Y 2008 43 a a D D Y Y I I n n E E 9 9 N N p p d d & & 9 9 C C n n D D R R m m a a 1 1 H H a a A A n n M M S S a a 8 8 W W e e ' ' r r e e y y C C i i o o a a