U.S. AND CANADA NEED TO AGREE ON ESTATE TAX CREDIT, CANADIAN FIRM WRITES.

I feel that the Free Trade Agreement with the United States is one of the most important accomplishments of this Government. It will undoubtedly promote Canada's growth and enhance the Canadian standard of living.

Many times, the trade process between the two countries requires the reciprocal creation of an infrastructure, the opening of branches and the acquisition of assets in either country.

Unfortunately, there is a situation that is having a negative effect on this process. As a result of the United States' enacted Technical and Miscellaneous Revenue Act of 1988 (TAMRA), the U.S. situs assets pars of the estate of a Canadian resident are subject to a USA estate tax that, combined with the current Canadian "deemed disposition" tax at the death of a person, may tax away 80% of those assets. The prospect of this "gigantic confiscation" is preventing many entrepreneurs from starting or further developing trade activities that otherwise would have been promoted by the FTA.

There is an urgent need to reach an agreement between Canada and the USA allowing a credit in one country for the taxes paid at the death of a person in the other country. It is also necessary to establish a marital deduction to residents of both countries for property passing to the decedents spouse.

I am sure that the above suggestions will contribute to freer trade between both countries.

Sincerely,