I'll go first.
On the first question, with respect to the stimulus or reducing interest rates, what certainly happens is that an interest rate reduction will have impacts throughout the economy. It's not just wages that would be affected. Wages are an indirect result of other things happening with respect to things like business investment. Really, the idea is that the interest rate cut would encourage investment in equipment, fixed plant, and therefore, the productive capacity of the economy increases, and therefore, wages are able to increase because of productivity.
On balance, certainly the idea that an interest rate cut would be stimulative would not necessarily harm the economy. We think it would be of benefit, on average. The difficulty is that we have a red-hot economy in some parts of the country, and a very cold economy in some other parts, but we have only one interest rate. The idea that we can deal only with one segmented issue is very difficult, and it's a challenge for the Bank of Canada governor to get that measure just right. So there certainly is pressure, or certainly with the latest news of price reductions or easing of inflationary concerns in Canada, there now is some more room for interest rate cuts.
Getting to the GST issue, whether you reduce GST by a percentage point or you apply that to, say, a personal income tax rate cut, it will be more or less the same thing. Personal income tax is just as effective as the GST, in our view, because largely, home ownership is exempt, or capital gains are exempt, as well as RSPs are tax exempt.
So the impact of GST versus personal income taxes is roughly equivalent in terms of how they would work in the economy. They were needed because we have a large fiscal surplus at the federal level, and it's important to bring that back to the government.