Thank you, Chair.
Thank you all for your very good presentations.
I was particularly struck by Mr. Raizenne's testimony, in which he said that we have 86 bilateral tax treaties. It was a 14-year process to work out the taxes that we currently have. It's a very complicated and layered set of rules. We have a general anti-avoidance rule, the rule of all rules, if you will.
So you have what is a very sophisticated, competitive system. Then you have the budget dropping a bomb into the system by saying “cracking down on corporations that have avoided paying their fair share of taxes by using tax havens”. Well, “cracking down” appears to be pejorative; use of “tax havens” appears to be pejorative; “have avoided paying their fair share of taxes”, again, is pejorative. Then further on, to expand it, it says “by eliminating the deductibility of interest incurred to invest in business operations abroad”.
This is a very peculiar way to go about addressing what I hear all the witnesses say may be something of a problem. I was therefore struck by Mr. Pantaleo's testimony that surely to goodness you would consult about this before you drop this bomb onto the tax system.
I would put it to all the panellists. If in fact we could wind this thing back, what would be your advice to the minister, in terms of how you would structure a panel and what the questions might be that the panel might look at, and would you include an economic analysis of the puts and takes, the benefits, and also the liabilities that flow from it, as Mr. Poschmann said, and increased trade flow and other economic opportunities that Dr. Hines referred to?
I'd be interested in asking you how you would see a proper analysis being done of this apparent issue.