Thank you, Mr. Chair, and I thank our witnesses.
We do have a very short time here, so I'll be very quick.
Mr. Firth, I accept your criticisms, and it was a misunderstanding. I just want to make sure we know that's your opinion, and I understand there are other opinions out there. This was simply a definition respecting financial services, and it was intended to address the uncertainty from certain court decisions and was never intended to be a policy change. No new taxes were imposed, and it is a continuation of a long-term policy. I'm just reaffirming that.
Certainly there were retractions from CRA, but I want to read into the record how this impacts the investment Industry. Ian Russell is on record, and I will quote:
And this is nothing that is unusual. What happens is the courts, there will be a tax case, they'll go to the courts and courts will rule. And in this case they made a ruling that using perhaps a loophole in the Tax Act that the fees paid on discretionary managed money were tax exempt. And the concern was sufficient at Finance that in the following December they put out a clarification. And they made it very clear that those fees were subject to GST. (...) You are absolutely right. And the cause of the confusion first of all in the CRA is they confirmed that discretionary management services and investment management services were taxable but then they had this phrase in which was services without discretionary authority. And that all of a sudden opened up everything to… what does that mean? Does it mean that things that had been tax exempt are taxable? But the reason we were reasonably confident which gets to your point, Michael, is that, that would be a fundamental change in tax policy. That is the responsibility of the Department of Finance not CRA. CRA simply implements tax policy. So what we were looking for from Finance was a confirmation that in fact tax policy had changed and there was no such confirmation except in that very, very narrow context of some promotional services that were carved out. Otherwise, it was simply reaffirming tax policy. (...) So the Minister just confirmed and removed the confusion on the street. I think it was very important for the Minister to do that as quickly as he did.
It's pretty clear, I think, to the industry that's impacted by it. What's the conflict?