Category Archives: 877A

You Have Your Certificate Of Canadian Citizenship – What Next? Six Options For Newly Recognized Canadians

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John Richardson, J.D. – August 13, 2026

Introduction and purpose

This is the third of a series of posts to help you understand Canadian citizenship by descent. Canada’s Bill C-3 which took effect on December 15, 2025 made major changes to Canada’s citizenship laws. By changing it’s “citizenship by descent” rules, Canada has created an opportunity for many U.S. citizens to be formally recognized as Canadian citizens. This series of posts has been designed to understand Canada’s Bill C-3 (effective December 15, 2025) and understand how and why these changes are so valuable for many U.S. citizens.

A series of posts

The first post focused on Understanding The Citizenship By Descent Provisions Of Bill C-3 – The Canada Citizenship Act. Specifically what factual conditions would result in an indiviudal being a Canadian citizen and therefore entitled to a Certificate of Canadian citizenship? (Note that with the exception of naturalization or direct grant, one would, under Canadian law, be a Canadian citizen from birth. Those born in the United States are U.S. citizens from birth. Hence, many people, recognized as Canadian citizens from birth, would be Canada/U.S. dual citizens from birth.)

Understanding The Citizenship By Descent Provisions Of Bill C-3 – The Canada Citizenship Act

The second post is a discussion of “Canadian Citizenship By Descent – A Search For Proof (To Prove The Truth)”

Canadian Citizenship By Descent – A Search For Proof (To Prove The Truth) – 4 Perspectives

If citizenship cannot be proven, it has no functional or practical existence. Therefore, those seeking a Certificate of Canadian citizenship embark on “a search for proof”. Although the law does not establish a formal deadline to submit the application for a “Certificate of Canadian Citizenship”, I suggest applying as quickly as possible. Laws can and do change!

This third post is to explore why eligibility for a “Certificate of Canadian Citizenshp” matters. What good is it to be a Canadian citizen? What role could Canadian citizenship play in your life. So, you are a Canadian citizen? What do you do with it? How can it benefit you and your descendants? I suggest that (particularly as a U.S. citizen) that there are (at least) six ways that having a Canadian passport could enhance your life.

What does it mean to be a Canadian citizen? What does it mean to move to Canada as a Canadian citizen?

This post is organized in the following Parts.

Part A – Taxation is destiny – moving to another country always has tax implications

Part B – If you move to Canada and renounce U.S. citizenship you may be subject to the U.S. “Exit Tax” rules

Part C – A review of who IS a Canadian citizen and entitled to a Certificate of Canadian citizenship”

Part D – I have my certificate of Canadian citizenship – what do I do with it? How do I turn it into a family heirloom? How can I sponsor my spouse?

Part E – Six specific opportunities Canadian citizenship provides to U.S. citizens

Part F – Renouncing U.S. citizenship and having access to the United States as a Canadian citizen

Conclusion

Appendix A – The 877A U.S. Exit Tax Rules

Appendix B – The 877A “dual citizen from birth” exemption to the Exit Tax Rules

Appendix C – The legislative text of the “dual citizen from birth” exemption to “covered expatriate” status

Here we go …

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How Canada Pioneered Modern Departure Taxes And The US 877A Exit Tax – A Story Of Taxpionage And Intrigue

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Introduction

Exit/Departure taxes are imposed when an individual severs tax residency with a country. In a system of residency based taxation, the tax is imposed when the individual severs residency with the country. For example, if a Canadian were to move from Canada to the United States and ceases to be a resident of Canada, that person would be subject to Canada’s “Departure Tax”. U.S. citizenship is the world’s only “Taxation-based Citizenship”. When an individual relinquishes U.S. citizenship, that person may be subject to the U.S. 877A Exit Tax rules.

Canada and the United States are examples of the most brutal tax systems the world has ever known. This is largely because they both impose taxation on unrealized income. Examples are exit taxes and their CFC rules. Imagine paying tax on income that you have never received?

In the spirit of taxing income that an individual has never received, the United States Exit Tax imposes on certain Americans abroad, who renounce their U.S. citizenship a tax on “pretend” or “deemed” income. The U.S. 877A tax goes beyond – in its scope – any departure tax the world has ever known. Not only does it force a deemed distribution of pensions. But, 877A taxes the pensions of Americans abroad, accumulated while that American was not resident in the United States. Furthermore, 877A taxes that non-U.S. pension more punitively than it would tax a U.S. based pension.

The following post compares the U.S. 877A Exit Tax imposed on the relinquishment of U.S. citizenship with Canada’s Departure Tax imposed when tax residency is severed with Canada.

Canada’s “residence-based” departure tax vs. the US “citizenship-based” Expatriation Tax – Focus on Canada’s Tax

Both Canada’s Departure Tax and the U.S. Exit Tax were designed to target the super wealthy. They have had their heaviest impact on middle class people. They are examples of the mantra that:

“Sooner or later a class tax becomes a mass tax.”

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