Finance committee  When it was introduced in 2009, we said that the long-term impact of the TFSA would be about $3 billion in income.

Finance committee  We haven't done that analysis. The Department of Finance hasn't done that analysis.

Finance committee  The economic literature on savings rates is quite complex. If you look at the literature and you look at many, many studies that have tried to assess the determinant of saving and have even tried to determine the definition of a proper savings rate, doing that is extremely complex.

Finance committee  We've done a long-term analysis projection until 2035 that's with respect to long-term cost. In today's dollar, we assess that the enhancement would cost about $650 million. That is about—

Finance committee  Yes. That's about 0.03% of GDP and 0.3% of tax revenues. With respect to the overall program, we've assessed that the long-term cost over the same horizon would be about 0.22% of GDP. With respect to the short term, or the cost over the planning horizon, you have that in the budget on page 440.

Public Accounts committee  I think that there is a much broader question here, regarding how the Canadian tax system should be set up. In my opinion this goes somewhat beyond the framework of our discussion today.

Public Accounts committee  I would like to add a comment. Is the question to determine whether tax expenditures are systematically regressive? I do not know. In fact, we have tax expenditures which by definition are far from regressive. For instance, the Working Income Tax Benefit definitely targets low-income people.

Public Accounts committee  I think that Mr. Giguère has raised an important concern about the system, which is that everyone must pay their fair share of tax. As for people with high incomes, I would simply like to mention that those who are in the highest tax bracket, which is 29% at the federal level, represent 3% of the Canadian population, but they pay 35% of the income tax.

Public Accounts committee  Part of your question obviously referred to a positive decision that the government has made. I can't tell you much about the results of the study you are pointing to.

Human Resources committee  A registered charity would not be subject to tax, and the income generated within the charity, as long as, as we explained before, it's income related to a related business or direct income generated by the charitable activities, then it's tax-exempt.

Human Resources committee  I would just say that if it costs the business to hire these individuals...and the cost can be reflected, I guess, in lower productivity and lower returns and income. Then, when the income is taxed, it's the lower income that is taxed. Implicitly there's a deduction there that is taken into account when assessing the income.

Human Resources committee  The reason they were not able to invest in limited partnerships is that the general interpretation under the Income Tax Act is that investment in a partnership is by definition carrying on business. That's why they could not invest in limited partnerships. The way this will be brought in within the legislation is to say that the mere fact of investing in a partnership now, if you're a registered charity, doesn't necessarily mean that you are carrying on business.

Human Resources committee  As you can understand, it's a bit difficult for me to discuss the pros and cons of a policy that is not in place. What I can maybe explain to you is how it works, and how it could work now for a charity that wished to also develop some social enterprise and generate some commercial activities and income.

Human Resources committee  If I may, I would like to clarify something. I am here as an expert in tax legislation. I can speak to how social finance fits in that framework. However, I am unfortunately unable to answer broader questions on social finance and on the cost of using it as an instrument, if the questions go beyond the legislative and regulatory framework of taxes.

Human Resources committee  Thank you, Mr. Chair. My name is Miodrag Jovanovic. I am director of the personal income tax division with the Department of Finance. Thank you very much for your invitation to appear here today before the committee regarding your study of the potential for social finance in Canada.