Your questions are excellent. The unitary tax would require a complete rejigging of the international tax system in terms of how that's based. I think it's worthy of study. I think it would be very difficult to implement. I think you'd need to have an almost global tax-collecting entity to be able to make those allocations among countries, as opposed to leaving it up to each country. The State of California tried to implement something like that for their state tax, and there was a hue and cry, let me tell you.
On the transfer pricing in Glaxo, the Glaxo case represents two things. Number one, it was a huge loss for the Canada Revenue Agency. On the other hand, it did provide a certain amount of certainty to Canadian companies and multinationals with respect to the Canadian law. That is because the Supreme Court of Canada essentially decided that the Minister of National Revenue should not supplement or replace a business person's commercial reason for having a transfer price or entering into a commercial transaction with that of the Canada Revenue Agency.
In other words, the fundamental issue in Glaxo was that there was an additive to their Zantac stomach ache remedy, and it was possible to buy that additive from a generic drug company for, let's say, a tenth of the cost. The Canada Revenue Agency reassessed Glaxo and said that the fair market value must be what the generic company sells that additive for. Glaxo went all the way to the Supreme Court to have the Supreme Court say no, that's not true, in spite of the fact that the generic company could be selling an additive for 10ยข a pound. The fact is that the related entities of Glaxo provided additional value added with respect to that additive, which justified that fair market value price. As I said, it's a loss for the Canada Revenue Agency, but it did provide a certain amount of certainty within the transfer pricing area.
Transfer pricing in and of itself is really only transactions between related companies, such as, for example, a Canadian parent or a Canadian subsidiary, typically of a U.S. parent company. It's a decision on what the proper transfer price is. There are mechanisms between Canada and the U.S. as to what happens if Canada decides that the price should be higher and the U.S. says no, that they think the price should be higher on their side. There are mechanisms to take that into account.