The residents in Peterborough thank you for your understanding.
They then loan the $200 million to another tax haven, which subsequently loans the money at 10% to company B in the United States. What happened was they got back most of the proceeds of the $20 million that they had deducted from their income for loaning the money back to a second tax haven, claimed the expense, and brought the $20 million back to Canada tax-free. Inherently it is wrong. They never incurred an expense, but they were allowed to claim the expense against Canadian taxes, and despite the fact that the CRA could prove that they did this, it was ruled that it was perfectly legal and legitimate.
Isn't this exactly what the finance minister is talking about cracking down on? It's not legitimate investment expenses abroad that will assist Canadian companies to expand. Rather, it's abuse of the system.