Thank you.
First of all, I would dissent from my co-presenter about the relative merits around productivity of cuts in various taxes. Most of these are based on theoretical propositions around how different taxes affect the economy. The way the modelling works is that because income tax, which is progressive, moves away more from a so-called natural equilibrium, they are by definition more distortionary. When numbers have been attempted to be put on those, they are usually done as a sort of quasi-empirical framework. The evidence in terms of tax cuts, different types of taxes, and tax mix actually leading to improvements in productivity is quite thin if you actually look at the empirical evidence.
Coming back to your original question, I believe you might be interested in our section on the full alternative federal budget, starting on page 94, where we outline a sectoral development strategy. In a nutshell, we recommend an increase in the corporate income tax rate on the oil and gas sector back to 28% from its current level, which would raise approximately $1.7 billion per year. We would use that to fund the creation of a new value-added sectoral development agency. This would look at projects in the auto sector, the forestry sector, and in other up and coming areas, whether that's high tech or biotech or what have you, in order to get Canada back in the game in terms of more active industrial policies.
We think this would be a much better use of funds. If the program were well designed, targeted assistance of that order would have a much better benefit over the long term than across-the-board tax cuts, which have had huge benefit in areas like banking and oil and gas, for example, with very little return in terms of productivity benefits for the Canadian economy.