If Canada genuinely wants closer economic ties with Bermuda, a tax policy that encourages real investment should be negotiated, a businessman has proposed.

Nick Faries, the chief executive of the East End Group, a holding company based in Bermuda and overseeing various subsidiaries, said such negotiations would be “a win-win for both sides”.

His comments came after Tom Clark, the Canadian Consul-General to Bermuda, told The Royal Gazettelast week that Canada was seeking closer ties with the island.

He said the island stood to benefit as the giant to Canada’s north diversified trade relationships across the globe.

Mr Clark was visiting the island from New York after a speech by Canadian prime minister Mark Carney at the World Economic Forum in Davos, Switzerland, two weeks ago.

The Canadian leader told attendees that his country was changing its approach to trade and diplomacy in an era of “great power rivalry”, requiring smaller countries to band together.

Mr Faries said the island holds “deep pools of patient, institutional capital” as well as insurance and reinsurance entities, asset managers and family offices.

He said: “This is capital that looks for stability, predictability and sensible tax treatment. When those conditions aren’t there, money doesn’t wait around.

“So, Bermuda should be looking for a Canada-Bermuda tax treaty policy at least, even a limited one.

“Lower withholding taxes, clearer rules and more certainty would immediately make Canada a more attractive place for Bermudian capital to invest directly into operating businesses.”

Mr Carney said last week: “To help solve global problems, we're pursuing variable geometry — in other words, different coalitions for different issues based on common values and interests.

“This is not naive multilateralism, nor is it relying on their institutions. It's building coalitions that work, issue by issue, with partners who share enough common ground to act together.

“What it's doing is creating a dense web of connections across trade, investment, culture, on which we can draw for future challenges and opportunities.”

Mr Clark, who was on a two-day visit to the island, said Canada was seeking to build on relations with Bermuda with “urgency”.

Mr Faries said the move is “encouraging and hopefully works out well for both countries”.

He asked: “What should Bermuda want?

“Right now, Bermudian investors putting capital into Canada face a 25 per cent withholding tax on dividends.

“This has a real impact on returns, and it meaningfully discourages long-term investment.”

Mr Clark, who is also the Canadian Consul-General in New York, met Andrew Murdoch, the Governor, David Burt, the Premier, and other officials last Monday.

He discussed supply-chain diversification with the Premier and said Mr Burt was “extremely positive” about the future of Canada-Bermuda relations.

Mr Clark told the Gazette: “We’ve got to find different supply chains.

“We are not replacing old supply chains — but adding new supply chains, simply because it’s a protection for Bermuda that if you’re dealing with many people, you’re much more independent than if you’re dealing with just one.

“With the pace of events in the world, I think everybody is seized with the idea that we should probably do this sooner as opposed to later.”

Mr Clark said as Canada “reinvents the new order”, it gravitated towards countries with similar values, history, predictability and stability.

He said Bermuda and Canada “are stable, predictable countries”, which he noted was good for business.

He added: “I think that where Bermuda and Canada are going is in the same direction and I think that it’s going to be much more intense than it has been in the past.”

Canadian visitors to the island increased by more than 30 per cent in the past year, Mr Clark said, in part because they are choosing not to travel to the United States, its largest trading partner.

He said: “There are reasons for it but I think it is very positive … Canadians are getting to know Bermuda again.

“I think that when you get to know a country, get to know a people, it is easier for how you envisage to do business with them, how you invest with them, co-operate with them.”

Canadian investors were fully engaged in the island’s economy, Mr Clark said, and he highlighted the close ties between the two countries, such as in education, as another positive in the relationship.

He said was optimistic about the direction of Canada-Bermuda relations.