Back to this baby. This incredible desire not to throw the baby out with the bathwater is interesting to me.
The AG's reports, and there are Stats Canada data in the last one, right back to Denis Desautels, have talked about the use of offshore tax havens, and it's growing. In the last couple of reports it has been growing exponentially, and this is in part because there's a perceived advantage, obviously, of paying less tax offshore. Clearly that's the motivation, and that's okay.
What we're talking about, apparently, with this budget proposal is addressing the issue of interest deductibility to remove one incentive to move money offshore. Correct? Okay.
If the Barbados and the Bahamas and Cyprus were such wonderful places to develop businesses on their own, that would be one thing. But to talk about flowing billions of dollars out of Canada, investing it there, and then writing off your interest here obviously creates a smack of unfairness in the minds of people who are not able to do that, who are out working and paying their taxes. I think this is really at the heart of the motivation around dealing with this issue.
Rather than let the baby soak in the dirty bathwater, I think there's a need to try to determine how we can address this issue. You've spoken rather clearly and well about the difficulty in determining what is a legitimate offshore investment and what's simply an attempt to defray your own costs here in Canada. That, we understand, is challenging.
I understand we're talking about hundreds of thousands of these types of entities that have been established offshore that are now being used by Canadian companies, and that Canada is one of the fastest growing countries in terms of making use of these types of structures. Is that true?
Secondly, in terms of the repatriation of profits earned offshore--Mr. McCallum spoke about levelling the playing field--do other countries allow you to borrow money corporately or individually, say corporately in their own jurisdictions, write off the interest, take the money, put it offshore, pay little or no tax on it, and then repatriate it tax free?
Are we in a playing field with a bunch of countries around the world who do that, or are we one of the only jurisdictions that allows that particular tax incentive to exist?