Let me give you a simple example. Supposing you have revenues of $100 US. After paying everything you have to pay, you have $20 left. You pay taxes on $10 of that and you receive investment credits of $10; that means you are left with $20 in cash. With the appreciation of the Canadian dollar, those $100 US represent only $110, as opposed to the $130 that was the case previously. If you do the math, you end up in the red.
We engaged in R & D on the assumption that we would receive funding in the form of investment tax credits, and yet we're in the red, so we don't pay any income tax. I imagine the government is putting that money aside in anticipation of our future profits. Given that the carry-forward period can be as much as 20 years, it is currently very difficult for companies to know when they will receive the money. People working for biopharmaceutical, information technology, aerospace, defence and forestry companies have all told us that for every one-cent increase in the value of the Canadian dollar, the effect is between $50,000 and $2 million. So that gives you an idea of the impact it can have.
At the present time, amounts of between $10 million and $1 billion are on companies' books, but they are unable to claim these amounts from the government. Of course, if companies are preparing to engage in research and development in Canada but have an opportunity to recover part of those tax credits in another country, they will immediately consider going to that country.
For our part, we are in favour of the idea of continuing to develop our R & D in Canada. We have an excellent reputation globally. However, when we are preparing our records, we have to be sure that we will receive the money promised by the government. In our opinion, that could apply to other monies that we are required to pay out -- for example, for employment insurance or another taxation system.