Yes.
I'll very quickly say why there are three reasons for the problems of this credit, and why it should be abolished.
First of all, there's been a separation of control and ownership in the LSV and poor governance, and MacIntosh's paper goes into some detailed discussion of that. But, effectively, there has been a divorcing of the ownership and control of the funds. Therefore, the incentives have not been particularly good for better returns.
Secondly, there's been a crowding out of private equity investments by labour-sponsored venture capital firms. This has been shown in several papers that have been published in the past. But there is good reason for that, because what happens when you have a generous tax system that encourages investment in certain types of firms is you end up distorting signals in the market and you end up getting too many poor firms coming in and displacing the investments of good firms. That undermines the market as a result, which is one of the reasons why our venture capital market has had such poor returns, as I noted earlier.
Then, finally, it's not surprising that investors get such low rates of return because of the various tax benefits, including their RRSP deductions, which are piled on top of it. Really, they're only worried about the tax returns that they might get and pay less attention to the economic returns from getting their investments. Depending on the province, it can be almost three-quarters of the cost being covered. Therefore, it is really not sensible for our government to have a policy that is turning capital investments into poor rates of return.
Thank you.