Finance Committee on March 19th, 2013

[The Chair, Conservative, James Rajotte]

I call this meeting to order.

This is the 110th meeting of the Standing Committee on Finance. Our orders of the day, pursuant to the order of reference of Friday, March 8, 2013, are to study Bill C-48, An Act to amend the Income Tax Act, the Excise Tax Act, the Federal-Provincial Fiscal Arrangements Act, the First Nations Goods and Services Tax Act and related legislation.

I want to thank all of our witnesses for being here. I think because of the weather some colleagues are still making their way to the committee.

We have with us six organizations, six individuals, who are here to present to the committee.

Our first guest, speaking as an individual, is Ms. Brigitte Alepin, who is a chartered accountant.

We have Mr. Kim Moody, with Moodys LLP tax advisers.

We also have with us Mr. Stéphane Laforest, president of the Coalition des travailleuses et des travailleurs autonomes du Québec.

From Ernst & Young, we welcome Mr. Greg Boehmer, partner.

From KPMG, we have Lorne Shillinger, also a partner.

By video conference

From Montreal, we have Mr. Gérald Tremblay of the Federation of Law Societies of Canada. Welcome to you all.

Each of you will have five minutes for an opening statement.

We will begin with Ms. Alepin.

[Brigitte Alepin, Chartered Accountant, Tax Expert, Tax Policy Specialist, Author, As an Individual]

Ladies and gentlemen, good morning. Thank you for the invitation.

In light of the length of Bill C-48 and of the short notice for its analysis, I was allowed to focus my opinion on a specific section of the bill.

I chose the upstream loans rules, because according to Department of Finance officials who appeared before this committee at a previous meeting, they are one of the main elements of the bill you are studying.

In order to understand these rules, we need to know that the Canadian multinational companies that do business in tax havens are taxed according to the following basic principles, which I will present in a very summary way. If the multinationals earn income, Canadian income tax is levied as soon as that income is made. If the multinationals earn business income, it is during the year wherein that income is brought back to Canada that Canadian income tax becomes applicable.

In order to get around this repatriation income, multinationals and their affiliates set up in tax havens used to put strategies in place involving loans, that is to say that rather than paying taxable dividends to bring the income back into Canada, the sums were simply lent to Canadian multinationals.

The purpose of the rules on upstream loans initially proposed in 2011 was to put a brake on these strategies by considering such loans as dividends, as explained several times before this committee during the previous weeks. On their own, these rules are very sensible, to such an extent that one wonders why tax authorities waited so long to propose them. However, when they are analyzed in light of the Income Tax Act as a whole and recent amendments made to it, these rules lose all relevancy, and even though they may appear to have teeth, their effect on public finances may well turn out to be quite minimal.

In fact, while these rules on upstream loans were being introduced in order to catch Canadian multinationals who attempt to bypass repatriation income tax, amendments to subsection 5907(11) of the Income Tax Regulations were implemented. May I remind you that it is by virtue of these amendments that Canadian multinationals no longer have to pay income tax on the business income they make through affiliates they have set up in countries with whom Canada has signed an agreement to exchange tax information, that is to say Anguilla, Aruba, the Netherlands Antilles, the Bahamas, Bermuda, Costa Rica, Dominica, the Isle of Man, the Cayman Islands, the Turks and Caicos Islands, Jersey Island, Saint Kitts and Nevis, Saint Martin, St. Vincent and the Grenadines, and Saint Lucia. The list may get even longer since negotiations are currently underway with other tax havens including Antigua and Barbuda, Bahrain, Belize, Brunei, Gibraltar, Grenada, the Cook Islands, the British Virgin Islands, Liberia, Liechtenstein, Panama, Uruguay, etc.

This total tax exemption on income earned by Canadian multinationals in these tax havens, which represent most of those with whom Canadian businesses do business, calls into question the purpose of putting in place tax regulations for the purpose of ensuring that taxes on repatriated income will be complied with, since that income tax is in the process of disappearing. In fact, since January 1, 2013, that form of taxation no longer exists on Canadian income exported to several tax havens.

To conclude, despite the limited practical scope of the rules on upstream loans, and despite the dangerous complexity of Bill C-48 as a whole, I recommend, in these circumstances, that the bill be adopted because the time has come, frankly, in this time of economic crisis or pre-crisis, for our public servants to do something different. They have to rethink tax laws and adapt them to the realities of the 21st century. In order to be able to do so, we have to avoid mobilizing them around this technical bill whose adoption or non-adoption will do little to arrest the force of the global movement toward legal tax exemptions on vast corporate and personal fortunes.

Thank you. I will be happy to reply to your questions.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

Next we'll have Mr. Moody's presentation, please.

[Kim Moody, Moodys LLP Tax Advisors, As an Individual]

Good morning, Mr. Chairman, honourable members. Thank you for the invitation to appear before your committee to speak to you about Bill C-48.

My name is Kim Moody. I'm a tax practitioner from Calgary, Alberta, and a partner in a unique tax advisory practice comprised of approximately 20 Canadian chartered accountants, U.S. certified professional accountants, Canadian lawyers, and U.S. lawyers.

We focus strictly on tax advisory matters for the private client, for the benefit of the two professions that dominate the practice of tax in Canada: accountants and lawyers. Most of our clients have direct or indirect interests with our southern neighbours, the U.S., and therefore we practise in U.S. tax law as well.

I've had the pleasure in my 20-plus years of practice in tax to serve for some of the distinguished organizations representing our profession. For example, I'm the immediate past chair of the board of the Canadian Tax Foundation. I'm also the immediate past chair of the Society of Trust and Estate Practitioners, STEP, and I've volunteered extensively for the Canadian Institute of Chartered Accountants in various tax capacities. I'm a current member of the CBA /CICA Joint Committee on Taxation.

However, my remarks today are not at all to be associated with these prestigious organizations. Instead, my remarks to you today represent the views of myself and our firm. At the outset, our firm supports the passage of Bill C-48. While some of its contents are not perfect, as I'll comment later, it is important to get it passed.

More than 200 years ago, Adam Smith, in his landmark book, The Wealth of Nations , laid out the basic principles of a good taxation system. Overly simplified, those principles are fairness, certainty, convenient to pay, and administratively simple. While we could debate those four principles for a long time, it is the certainty principle that would be compromised by not quickly passing Bill C-48. We believe that certainty in tax matters has been severely compromised by the inability to pass the collection of technical amendments that comprises Bill C-48. We expressed this view to the Auditor General when we were interviewed by her office prior to the release of her fall 2009 report.

As a private practitioner, do we advise clients to adhere to existing law or proposed law? Not an easy question to answer, given the recent history of how long it takes to get technical amendments passed. As you know, Mr. Chairman, some of the content of Bill C-48 originates from 1999.

As mentioned, Bill C-48 contains technical amendments that are by no means perfect. For example, there is proposed subsection 56.4, the restrictive covenant proposals, about which I wrote a paper for the Canadian Tax Foundation in 2008. They're very wide-sweeping and can have significant unintended consequences. If you're interested in good bedtime reading, I'd be glad to give you a copy of my 60-plus-page paper.

Second, there are the non-resident trust proposals in proposed section 94. Such proposals are extremely broad and nearly incomprehensible.

There are compelling arguments—which our firm agrees with and are consistent with Adam Smith's principles—that wide-sweeping, imperfect, and incomprehensible draft legislation should not be passed. In a perfect world, such draft legislation would be more targeted, have fewer unintended consequences, and be understandable. However, Bill C-48 contains measures that reflect good tax policy—reasons for its inclusion. To not pass such imperfect legislation would compromise Adam Smith's fairness principle, which at this point is critically important to consider. We only hope that such imperfections can be later fixed.

Our firm is sympathetic to some of the factors that have led us to where we are today. We commend the Department of Finance for the hard work they obviously do to ensure, to the best extent possible, that Canada's tax legislation is fair.

We would encourage the government to explore better ways to pass important tax proposals into law in a more timely, accurate, and comprehensible manner. For example, it would be ideal for the Department of Finance to engage the private and academic tax community on tax policy matters on a regular basis. Our firm's clients are usually successful private clients. Such businesses and individuals contribute greatly to the economic success of this country and deserve a certain tax system.

Thank you for your time. I'd be pleased to respond to your questions.

[The Chair, Conservative, James Rajotte]

Thank you for your opening presentation.

Mr. Laforest, you have the floor.

[Stéphane Laforest, President, Coalition des travailleuses et des travailleurs autonomes du Québec]

Good morning to all of the members of the committee.

First of all, on behalf of the Coalition des travailleuses et des travailleurs autonomes du Québec, I want to thank the committee for having us. To my knowledge, this is the first time representatives from our organization have appeared before you. Generally speaking, we are very rarely consulted, even though many legislative provisions, in particular tax provisions, concern us, and even though associations representing management and labour are called upon for opinions.

I would first like to make a comment regarding the situation of self-employed workers. In Canada, self-employed workers represent a shade more than 10% of the workforce. The number of self-employed workers increases yearly, that is to say at least two and a half times more quickly than the number of salaried workers.

The distinction between a self-employed worker and a salaried one hinges on a single factor. The employee has an employer, which means the employee is subordinate. For his part, the self-employed worker is someone who has created his own business. He did not wait for a job to be offered to him. He took some financial risks and made commitments to those who provide him with work, who are for him not bosses, but clients. The relationship he has there is the relationship between an entrepreneur and a client.

For the Canadian economy, the surge in the number of self-employed workers is primarily due to the advent of new communication technologies, but also to the need Canadian businesses have to have access to specialized workers on an ad hoc or sporadic basis, and thus have a certain flexibility in the management of their human resource requirements.

The result of that is that being able to call on self-employed workers is very beneficial for the business, but this type of lifestyle is also advantageous for the self-employed worker. It is a lifestyle he or she has chosen. He has chosen to be an entrepreneur and we want him to be treated as such. That is why the Coalition des travailleuses et des travailleurs autonomes du Québec has always objected to any type of measure which would give certain self-employed workers benefits of the same type as the benefits salaried workers have, such as those conferred by their seniority, which would skew and alter the relationship self-employed workers have with their clients.

Regarding Bill C-48, I have heard the people who are before you today, but I would in any case have some comments to make. However, what I have to say is perhaps not as weighty.

The Quebec Parental Insurance Plan provides income support to Quebec workers following the birth or adoption of a child, both self-employed workers and salaried workers.

We commended this measure when it was put in place, because for a self-employed worker to be able to benefit from this type of additional income during a certain period of time allowed his or her business to survive. Premiums paid into this system by self-employed workers are 78% higher than those paid by salaried workers. You have the exact rates in the brief. Self-employed workers pay approximately 178% more in premiums than do employees. However, they do not pay them as employees, but as entrepreneurs. The amount is not divided up. It is the amount that they would have contributed had they been salaried workers, in addition to an additional premium because they are self-employed workers. The amount is taken as a whole and is presented as such in the accounting in government reports.

In clauses 196 and 253, Bill C-48 amends the Income Tax Act in a way that will create an artificial division of this amount. In fact, the yearly premium that would have been paid by a self-employed worker will be divided up. First they will assess what he could have deducted had he been a salaried worker. Afterwards, any surplus will be subject to a distinct tax treatment. For this part, the person will be considered an entrepreneur. He will be allowed to deduct that expense from his income, which is consistent with business income tax rules under the Canadian tax system.

The Coalition des travailleuses et des travailleurs autonomes du Québec is asking that this artificial division—which is totally fictitious and adds needless complexity to the task of the self-employed worker who is going to have more paperwork to do when filing his income tax return—be grouped in a single measure which would be, in this case, the new subsection 60(g) of the Income Tax Act. This allows for a simple deduction, just like for any other expenditure incurred in the course of operating the business using business income. We are asking that the self-employed worker be allowed to deduct all of the amounts he or she will have paid and not only the part that is considered surplus. We are also asking that the self-employed worker be taxed in a manner comparable to salaried workers, which has never been the case.

And so we believe that this amendment is consistent with one of the primary objectives of Bill C-48, which is to ensure a certain consistency and harmony in the Canadian tax system as it applies to these deductions. We also propose that the process whereby taxpayers prepare tax returns be simplified and that it not be needlessly complicated.

I thank the committee.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

Next, Mr. Boehmer, please.

[Greg Boehmer, Partner, Canadian Tax Practice, Ernst & Young]

Thank you, and good morning.

My name is Greg Boehmer. I'm a tax partner with Ernst & Young, and on behalf of the firm, I'd like to thank you for the opportunity to appear before this committee in connection with Bill C-48.

It's important in our role as tax advisers with clients that we be able to provide our advice to our clients based on legislation that is both clear and certain. Clarity and certainty are critical elements in supporting the integrity of the Canadian tax system. Taxpayers must comply with the laws in Canada and the Canada Revenue Agency must administer them. We would observe that this process is made all the more difficult for both taxpayers and tax administrators when there are long delays between the initial introduction of a tax proposal and its ultimate passage into law.

Bill C-48, as you know, contains a number of years' worth of proposals, some of which were introduced in previous tax bills that have never been passed into law. That has left many taxpayers with a great deal of uncertainty in managing their tax affairs. Clearly, the passage of this legislation will restore a substantial amount of that certainty and clear a big part of the backlog.

As noted by Minister Flaherty, the last comprehensive package of technical income tax amendments was passed in 2001, clearly a very long time ago. So, Mr. Chairman, it is fair to say that we greet Bill C-48 with a sense of relief and hope to see its speedy passage.

As the committee is aware, many of the technical amendments included in the bill have been in a state of flux for many years, including changes intended to enhance the integrity of the system and to preclude certain types of planning that the government considers inappropriate. Mr. Moody has commented on some of those, including the NRT rules, and there are other rules, such as the upstream loan rules, the surplus manipulation rules, etc. Clearly, these are a set of complicated rules, but we nevertheless agree with their implementation and passage.

Taxpayers have an obligation to abide by current tax laws, but they must also plan their financial and commercial affairs based on proposed taxation measures, including any legislation introduced by the government. Often proposed tax changes are effective as of the date of their initial introduction. Also, sometimes they're effective on a retroactive basis. These outstanding proposed tax changes, of course, result in a compliance conundrum for taxpayers.

Taxpayers and their advisers also place a significant reliance on comfort letters, which tend to deal with technical anomalies in a complex statute. With such a preponderance of outstanding legislative changes and the prolonged period of time that many of these changes have been outstanding, there will clearly be relief felt by those who regularly deal with the Income Tax Act and have the job of interpreting the statute.

As I've implied, we support Bill C-48 and, for that matter, the timely enactment of tax legislation in general. We recognize that a goal of achieving more timely enactment needs to be balanced with providing an adequate amount of time to study the relevant measures and to seek input from interested parties. In this regard, we commend the Department of Finance for its ongoing efforts to constructively consult with taxpayers and other professional and business organizations regarding these matters.

In the time left to me, I'd like to provide three examples of the types of problems that arise where proposed legislation is outstanding for an extended length of time.

First, in our experience, taxpayers may be reluctant to complete particular commercial transactions where the tax legislation on which the taxpayer must rely has not been enacted. This may be because of possible changes to draft legislation, particularly where the legislation has remained in draft form for an extended period of time.

Second, where draft proposals or legislation are outstanding over a prolonged period, this may have adverse cash implications on a taxpayer, either because refunds have been held pending confirmation of enactment of proposed new tax rules or because taxpayers are effectively prohibited from objecting to adverse assessments.

Finally, there are important financial statement implications relating to outstanding tax legislation, as, generally speaking, the accounting rules prohibit accounting for income tax proposals until they are either enacted or substantially enacted. The accounting rules are based on certainty of knowing what is as compared to what may be.

In conclusion, we see the ongoing need to address the issue of tax certainty and the timely introduction and passage of tax legislation, including regular technical amendments.

Thank you, and I'll be pleased to respond to your questions.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Boehmer.

We'll now go to Mr. Shillinger, please, for your presentation.

[Lorne Shillinger, Chartered Accountant, Partner, KPMG]

Thank you.

Good morning. My name is Lorne Shillinger. I am a partner and national leader of the KPMG Canada Real Estate Tax Practice. I greatly appreciate the opportunity to speak with the committee this morning on the importance of the technical tax amendments act and its significance to the real estate industry.

Bill C-48 represents a Herculean effort by the Department of Finance to catch up on a decade of outstanding tax measures. Long limbo periods are difficult. Taxpayers and their advisers need certainty of tax policy and legislation to prepare and file tax returns. Accordingly, the enactment of this legislation will be a welcome relief to the tax community. For the real estate industry, the key amendments in Bill C-48 are the changes to the tax rules governing real estate investment trusts, or REITs.

A REIT is an entity that uses the pooled capital of many investors to invest in and manage real estate rental properties. Unlike direct ownership of real estate, an investment in a publicly traded REIT is highly liquid and available to investors with limited investment capital. REITs are managed and structured to pay out regular, tax-efficient distributions to their investors. For these reasons, investments in REITs have been favoured for retirement savings. These legislative changes represent the successful culmination of six years of back-and-forth discussions.

A brief review is in order. On October 31, 2006, new rules, the SIFT rules, were announced to shut down the public income trust sector. After a reasonable transitional period, a publicly traded SIFT would be subject to tax at rates similar to corporate tax rates. REITs, however, would be exempt from the SIFT tax. This was the first time the definition of a REIT was introduced into Canadian tax legislation. Each subsequent iteration of the legislation was an improvement.

In early 2007, amendments clarified a REIT's rental revenue and property and allowed internal property management subsidiaries. In late 2007, amendments accommodated existing ownership structures and allowed foreign property ownership. In late 2010, amendments further clarified a REIT's qualifying revenue and provided a welcome, safe harbour for a limited amount of non-qualifying revenues and properties to be held by a REIT. The changes in Bill C-48 represent the fourth set of revisions to the REIT rules and complete the cycle. These further changes finally create a workable system for REITs to invest in, develop, and manage real property and to expand globally. Actually, the real estate industry would like a fifth series of amendments, especially to accommodate seniors housing and hotels to qualify as REITs.

In conclusion, we greatly appreciate this legislative process. The Department of Finance did listen. The amendments in Bill C-48 provide the necessary legislative framework for Canadian REITs to invest in and operate in Canada and abroad. Both the industry and government objectives are met. REITs can function in a commercially reasonable manner but must do so within the limitations imposed by policy. For all constituents of the REIT community, we greatly look forward to the enactment of this legislation.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Shillinger.

Mr. Tremblay, you may now begin your presentation.

[Gérald Tremblay, President, Federation of Law Societies of Canada]

Merci. I wish first to thank you for allowing me to do this from a distance. You can see that the weather would not allow me to be physically present, although I would love to be there.

I would also like to say that I'm assuming that our formal brief of February 21, 2013, forms part of your record. My notes are in addition to that brief.

The federation is a national organization which coordinates professional bodies of jurists from the provinces and territories of Canada. It regulates 100,000 of the country's lawyers, and 4,000 notaries in Quebec.

I want to say this very clearly: the federation supports the basic objectives of the bill, but it is concerned by the proposed bill as it relates to the legal profession.

The requirement that lawyers and Quebec notaries report to the government on the affairs of their clients and on tax transactions on which the legal counsel has provided advice is antithetical to the independence of the legal profession. That is a core principle of Canada's legal system. It is also contrary to the duty of loyalty all legal counsel owe to their clients.

These principles are essential to the effective functioning of our legal system. The Supreme Court of Canada has pointed out in several of its decisions that clients must absolutely be able to speak freely and openly to their legal counsel without fear that he or she will divulge the content of these discussions to the state. This free and open relationship is only possible if the clients can depend on the unconditional loyalty of their legal counsel.

I'm going to quote a very short passage of a judgment by the Supreme Court in Canada v. Law Society of British Columbia 1982. At page 335, it states:

The independence of the Bar from the State in all its pervasive manifestations is one of the hallmarks of a free society.

Later on, it states:

The public interest in a free society knows no area more sensitive than the independence, impartiality and availability to the general public of the members of the Bar and through those members, legal advice and services generally.

If we were to require that the lawyers and notaries of Quebec use the confidential information they have on their clients' affairs to help the government detect tax operations that could be abusive, these lawyers and notaries would become agents of the state.

These very issues are currently before the courts in British Columbia in a case involving the regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The B.C. Superior Court found the government's attempt to extend those regulations, which includes reporting requirements similar to those contained in the bill before you, unconstitutional. This case is now before the British Columbia Court of Appeal awaiting decision. The case has been pleaded.

There is a simple and direct way of settling the concerns of these organizations which regulate the legal profession, with regard to the bill: amend the bill so as to expressly exempt lawyers and notaries of Quebec from the reporting requirements that apply to them in their capacity as legal counsellors, contained in subsection 237(3) of the Income Tax Act . That is very easy to do. You simply have to amend the definition of the word “counsellor”.

[The Chair, Conservative, James Rajotte]

Mr. Tremblay—

[Gérald Tremblay]

In this regard, we are going to send the committee a draft amendment for this subsection which would exclude lawyers and notaries specifically from the definition of the word “counsellor” with regard to the reporting requirement.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you.

We will begin members' questions with Ms. Nash, please. They are rounds of five minutes each.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you, Mr. Chair.

I thank all of the witnesses for being here and for sharing their expertise with us.

I will begin with Ms. Alepin.

You stated that a tax regime had to respect three principles: it has to be fair, effective and simple. In light of that, I would like to clarify something I may not have understood very well. I am going to put my question to you in English.

Did you say the changes we are making to tighten up our laws for upstream loans by companies—in other words, loans they make, in essence, to limit their tax liabilities...? When we negotiate trade agreements with some of these countries that have a reputation for being low-tax jurisdictions, potentially tax havens, they could be exempt from the laws we are tightening here in Canada. Could you explain that? Perhaps I've not understood correctly.

You may reply in French.

[Brigitte Alepin]

That was a good summary, but that's not quite it. I will explain things again.

Since the recent amendments made to section 5907 of the Income Tax Regulations, we know that if Canada signs an agreement to exchange tax information with a tax haven, this will affect the Canadian multinationals that earn business income in that specific tax haven. Indeed, the act was amended in such a way that business income earned in that tax haven could be repatriated to Canada tax free. That was the effect of the recent changes to section 5907 of the Income Tax Regulations. Thus, if a Canadian multinational makes profits that are considered business income in any of the tax havens I referred to in my presentation, that business income will not be taxed in any way, neither in Canada, nor in the tax haven if that country does not collect any income tax.

The rules on the upstream loans intend to catch the multinationals that are attempting to avoid the repatriation income tax. However, at the same time, the legislator is adopting other regulations that allow for the legal cancellation of the repatriation income tax. One can be forgiven for wondering: why bother introducing rules on upstream loans, since there will no longer be any repatriation income tax on the income earned in most tax havens? Clearly, the multinationals are not going to try to put in place strategies to avoid this income tax which no longer exists.

Was that clearer?

[Peggy Nash, NDP, Parkdale—High Park, ON]

I think that I understood things better. I may have other questions for you later.

I want to ask a question to all of the witnesses in my very little time left. We appreciate that you've come here to express the need to get this bill passed. I think all of us agree with that. We're also searching for mechanisms to avoid having another 10-year gap like this, where technical amendments are not brought forward.

In the brief time I have left, would any of you like to comment on a specific recommendation, what you think we should do so that we don't have this lag? Is there any kind of legislative change you would recommend?

[The Chair, Conservative, James Rajotte]

We have about 30 seconds.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Oh dear.

[The Chair, Conservative, James Rajotte]

Is there someone who wishes to take that on?

Mr. Boehmer, please.

[Greg Boehmer]

I would just say try to get on with it and push the process through Parliament. It seems that most of the bills have died on the order paper and could have been pushed through. We wouldn't be sitting here today with quite so much. This is quite a bit.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Ms. Nash.

Ms. McLeod, please.

[Cathy McLeod, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Mr. Chair.

And thank you to all the witnesses again in terms of bringing your expertise in this very complex bill to the table.

I'm going to start by picking up on Ms. Nash's point. We've had some debate. I'd really be curious to get a few of your perspectives. Some people are saying a sunset clause would be a good thing. Others are saying that would actually increase havoc for their clients, that we really just need to ensure regular updates. I would be pleased if perhaps Mr. Shillinger, Mr. Boehmer, Mr. Moody, and Ms. Alepin could speak to whether that would actually create some havoc—if for some reason we had minority governments and issues with legislation where you were heading forward in one way with comfort letters. Could you comment, please?

[Lorne Shillinger]

Personally I think it creates havoc, just because taxpayers are encouraged by the tax authorities to actually file on the basis of proposed legislation. If you don't have the law actually introduced in the ordinary course and it dies, there's a concern that taxpayers have already filed their returns and planned their affairs based on the proposals and they need to rely upon them.