If you keep the house, make sure you lease it out to a third party at the going market rate, or better yet, hire a property management company to keep it rented out.  If you can terminate the lease without significant notice to the lessor, this could be contested by CCRA.

The Spouse And The Kids

Very simple – bring them with you!  IT-221 says that CCRA will deem you to have acquired non-resident status on the latest of:

- the date you left Canada
- the date your dependents left Canada
- the date you acquire new residency

So if possible, bring your entire family with you to your new country.  Sending back money to Canada to support a family is most certainly a “Significant Tie”.

The Minor Ties

There are ten Minor Ties as defined by CCRA for determining your ties to the System. Taken individually, they won’t be a problem, but they can add up to residency if you’re not careful:

1. Personal Property
2. Social Ties
3. Economic Ties
4. Landed Immigrant Status or Work Permits
5. Hospitalization and Medical Insurance
6. Drivers License
7. A vehicle
8. a seasonal residence (cottage)
9. a Canadian Passport
10. Union or Professional memberships

Personal Property

When you’re leaving, have a garage sale!  Sell everything you won’t be taking with you, or give it away.  Don’t put things in a storage locker.  Remember – you aren’t coming back.

Social Ties

Out with the Golf Clubs memberships, and change that lodge affiliation to the local chapter. 

Economic Ties

This is a wide category.  Obviously you can’t keep your Canadian job, but CCRA also frowns upon keeping Canadian bank accounts and credit cards.  Even keeping an RRSP puts a little tick mark beside your name. 

But why would you want to keep your money in Canada?  Apart from the increasing value of the Loonie compared to the greenback, there isn’t much reason to keep cash in Canada.  You get a T5 if you get significant interest income which you have to claim, and the advantage of tax-free growth inside your RRSP is effectively the same as keeping your investments in a low- or no-tax jurisdiction. You will take a significant hit withdrawing your RRSP funds, but you would pay tax on withdrawals inside Canada anyway. Talking to a tax accountant is mandatory if you have all but the smallest RRSP. 

As regards the declining value of the US dollar, remember, there are other strong currencies out there. Mutual funds are available that are denominated in the Euro and in Pounds. Once you leave Canada, your options are wide open.

Landed Immigrant Status Or Canadian Work Permits

Not an issue for Canadians by birth, but could be an issue for others. I’m afraid I know little about this.

Hospitalization And Medial Insurance

Every province in Canada has it’s own medical insurance system, and being originally from Ontario, I know OHIP.  It’s important to know that once you leave Canada and lose OHIP coverage, there is a 6 month waiting period should you return to Canada.  This may be a significant issue for those with health issues.

Drivers License

I have mixed feelings on this one.  I chose to keep my Ontario Drivers License, because the Bermuda driver’s license is not a particularly advanced (and therefore secure) identity card. While visiting family last summer, I tried to use the Bermuda license as id for getting into the local casino. When the laughter died down, I was politely asked if I had any other ID. Luckily, I still had my Ontario Driver’s license.

If you move to a country with stronger ID, this may not be an issue for you.

A Car Or Truck

You’re leaving, so why would you keep your car?  Unless it’s a true collector’s item, sell it. Even if you do decide to move back to Canada, the car will be several years older by then.  Sell your car.

A Cottage

Cottages can have more sentimental value than even your home.  One of my closest friends back in Canada has a cottage that was passed down for several generations.  I can understand why you wouldn’t want to part with a cottage.  If this is your only minor tie to Canada, you should be fine.  But to be safe, consider renting it out. 

A Canadian Passport

I grumble about this one being on the list – I don’t plan on ever giving up my Canadian passport.  No offence to Americans, but I believe Canadians get a warmer welcome in most places around the world than just about any other country.  And in my case, I have a work permit here in Bermuda, upon which my residency depends.  I will cover this in a future article, but getting Bermudian citizenship and therefore a Bermudian passport is all but impossible.  So I’m keeping my passport.

Union Or Professional Memeberships

Another tricky one.  Many people will have pensions tied to memberships in Unions or professional organizations.  Again, this is a minor tie, so if you have to keep it for a good reason, you will not likely run into any problems.

There are also a few extras which CCRA throws into the IT221, such as maintaining a mailing address, a phone directory listing, even having Canadian magazine subscriptions.  Obviously, the government needs to feed itself, and so CCRA will do its absolute best to keep you resident in Canada.  The bulletin also specifies things that CCRA expects to see if you return – such as establishing residential ties in your new home.  For that reason, keep copies of bills, and assuming you’re renting, a copy of your lease. If you ever decide to return, having these documents will help to prove your residency in another country.

Escaping from Canada’s tax system can be quite painless as long as you follow the points outlined in this article.  If you are able to follow the golden rule: Sell everything, close all accounts, and act as if you’re never coming back, you should have no problems.  Talking to a tax accountant and/or lawyer is always recommended, as everybody’s situation is a little different.

The opportunities for living and working outside Canada are practically endless.  If you’re able to broaden your horizons by moving, by all means do so!

In my next articles I will be discussing expatriot life in Bermuda. This crazy little country has more than a few stories to tell, and there are excellent job opportunities for people in the insurance and IT fields. In the meantime, please visit the Association of Canadians in Bermuda website at http://www.canadiansinbermuda.bm