Bermuda’s appeal to Canadian corporations as a base for their captive insurance companies has grown with the prospect of the tax information exchange agreement (TIEA) between the two countries coming into effect next month.That was the clear conclusion of members of the 25-strong Bermuda delegation in attendance at the Canadian Captives and Insurance Strategies Summit in Toronto yesterday.Under the terms of article 12 of the TIEA, dividends of foreign affiliates that are resident in Bermuda that are paid to their Canadian parent companies out of the active business income earned in Bermuda will be exempt from Canadian taxation.This will give Bermuda some of the advantages enjoyed by countries who have a “double taxation agreement” in force with Canada, such as Barbados.Premier Paula Cox announced last night that the TIEA will come into effect on July 1.“The Canadian delegation attending the Global Forum for Transparency and Exchange of Information for Tax Purposes here in Bermuda has delivered this very welcome news of the Canada-Bermuda TIEA entering into force on July 1,” Ms Cox said."The industry has been understandably looking forward to this news. Canadian companies are hugely involved in the captive, hedge fund and private equity areas of the international business sector and more recently in the banking arena.“Currently, there are 1,145 entities with Canadian interest, and this number is expected to grow exponentially.”Appleby partner Janita Burke spoke on a panel at the Toronto conference and said Bermuda was attracting a lot of interest from the Canadians.“This will put Bermuda on a level playing field with Barbados from a tax perspective," Ms Burke said.“It’s not quite the same as having a treaty, but it will allow surplus created by these captives to be exempt from Canadian taxes when they are returned to Canada.”The advantages of Bermuda became apparent when Ms Burke sat on a panel with representatives from rival jurisdictions British Columbia, St Lucia and Barbados, she said. The other jurisdictions each had certain restrictions on the business captives could write, while Bermuda did not.In addition, Bermuda was closer to Toronto in terms of being just over two hours’ flying time away, while reaching the others including Vancouver entailed a journey more than twice as long.One of the event’s sponsors was Bermuda’s Insurance Development Council (IDC), which had a booth on site at the conference venue, Toronto’s Metropolitan Hotel.IDC chairman Allison Towlson said: “The IDC is very pleased that the Canadian TIEA will soon be a reality. We congratulate the Bermuda Government for their vision and hard work in seeing this process through.“We believe the TIEA will channel more business opportunities with Canadian companies. It will also provide Canadian entities with a wider variety of advanced risk management tools from the Bermuda market.”Another attendee from the Island was Christopher Sposato, president of Integrity Resources, a business and management consultants which specialises in helping companies incorporate and get established in Bermuda.“When the TIEA comes into effect, Bermuda becomes a much more favourable jurisdiction, particularly given its proximity and resources,” Mr Sposato said.“Bermuda has access to reinsurers, something they don’t have in Barbados, and you can also fly there much quicker.”Grainne Sweeney, vice-president of Dyna Management Services, another Bermuda-based delegate, said there was strong interest in Bermuda from prospective captive owners.The TIEA was a factor, she added, but the Island also had a strong business infrastructure, with reinsurers, experienced captive managers, accounting and law firms, all of whom were represented at the conference.