I believe the issue of interest deductibility has been examined on a number of occasions. The Auditor General had occasion to mention it specifically with some detail in 1992 and 2002. The technical committee on business taxation, the so-called Mintz committee, looked into it and made recommendations on it in 1997. Perhaps the report was released in early 1998.
From a tax policy perspective the issue is the balance one strikes between what some would describe as competitiveness and neutrality or fairness, and whether or not one should provide an interest deduction for foreign investments when the underlying income is not subject to tax. In the material put out by the minister yesterday, the balance is that interest will be allowed to be deducted in Canada for foreign investments, but it won't be allowed where that Canadian deduction essentially represents the second deduction supplementing one taken outside of the country.