In broad outline, what should be done on the disadvantages whereby foreign companies move interest selections into their Canadian subsidiaries? We need effective, thin capitalization rules that would limit the amount of debt that a Canadian corporation, which is owned by foreigners, could borrow in Canada and deduct the interest. Many other countries have such rules. We have them ourselves, but they are not very effective, and we need to beef them up and say that you have to have a ratio of equity to debt of no more than x in order to avoid just having you dump debt into Canada.
On the double-dip, I think it's appropriate to consider disallowing the interest expense in Canada if, in effect, another deduction for that interest is being taken somewhere else--taken abroad. I think the net result would be that Canadian companies would tend to move just a little more of their borrowing offshore. If you're going to invest in the United States, you try to borrow in the United States. And provided we don't go overboard on this, that's a positive move, because it means there are fewer deductions against the Canadian tax base.