Finance committee  Not necessarily; corporate taxes typically increase because of the increase in activities, but we can't really attribute all the increase in business activities to the reduction in corporate tax rates. As I said, all we have to compare it to is what would have been the case had there not been the reduction in corporate taxes.

Finance committee  It is certainly a factor, but it's definitely not the only factor that enters into the decision of a business to locate its business. Many different factors would affect that, but certainly taxes would be an important factor, absolutely.

Finance committee  —we are almost 25%.

Finance committee  Yes, 31% or 32% is right.

Finance committee  About thirty...

Finance committee  I think that by the end of the full projection period, in 2019-20—

Finance committee  That's a result of the very deep recession that created a huge excess capacity in the economy and that's why inflation has remained low and the Bank of Canada was able to maintain interest rates at a very low level, of 1% now.

Finance committee  Yes, we have our own projection, obviously, which is different from the private sector's, so our growth profile for the real GDP is somewhat different from the private sector forecast. Also, there are two elements to that, which are the real GDP and the prices. The combination of the two will give you the nominal GDP.

Finance committee  It's a methodology judgment. Projection is done through models and also through the judgment of those who are using those models. Obviously every forecaster has their own view of how things will develop and our view might be a little bit different from what the private sector has in terms of the profile for that.

Finance committee  That's a very good question, sir. In fact, typically six years after a recession we should be in a situation where the global growth has sort of stabilized and there is really no issue. There are a number of risks and issues that have caused this sort of instability in global growth, and we see the IMF has revised down its global growth projection in its most recent publication.

Finance committee  No, in fact it's a reality. In Europe the fiscal budget compression obviously was recommended by the European Commission.

Finance committee  Typically, sir, during any recession period, one of the major players in the economy, which would be government, can actually help by boosting spending or reducing taxes to kick-start the economy. Just in response to your question whether it's a theory or a reality, the International Monetary Fund actually in its annual publication of “Fiscal Monitor”, which looks at the fiscal situation in different countries, has a measure that shows how much fiscal drag exists for each country.

Finance committee  Well, typically because we have a progressive tax system, taxes tend to increase more than the growth in GDP over time because of that bracket creep over time. People move up to a higher bracket and pay higher taxes, so there is a small increase over time, an improvement in the balance over time.

Finance committee  We have not explicitly taken into account any of these trade deals. CETA is new. It hasn't really been implemented, so there's really no point in doing that. As I said, we have to do a study to have a better idea of its effect. The other trade deals that have already been done, relative to the overall picture, are very small, so they don't really require an explicit account in the way we do our projection.

Finance committee  If I could just add one point, I think you're right: there will be competition for skilled immigrants. That's one reason we have actually done some simulations in the past, in terms of whether raising immigration levels would actually help deal with the issue of long-term fiscal gap.