U.S. Treasury Secretary Henry Paulson will meet with Canadian Finance Minister Jim Flaherty near Ottawa on Friday, when they will announce changes to the Canada-U.S. Tax Treaty, Ottawa said on Wednesday.

The two will make a joint statement at a historic estate at Meech Lake, Quebec, located in park just outside of Ottawa.

Ottawa has said the two governments plan to eliminate a 10 percent withholding tax on interest payments made by borrowers in one country to lenders in the other.

The long-awaited measure would mainly benefit Canadian companies that borrow from U.S. banks. It is estimated the change will cost the Canadian government C$250 million ($246 million) in the two fiscal years to 2009.

($1=$1.01 Canadian)

U.S. Canada