Just to clarify, it was a drafting error made at the Department of Finance. What it related to is not the rate of tax that would apply to credit unions after the phase-out.
During the phase-out period, 80% of the income would be eligible for the additional deduction.
That extra 20% during the phase-out period—20%, and then 40%, and then 60%—wasn't properly accounted for in a cross-reference in the act. As a result, that income would not have been eligible for the general rate reduction. It would not have been included in full rate taxable income, with the result that this income would have been subject to tax at 28% as opposed to 15%.
Now, once the phase-out period was over, our view is that the system would have returned to the state it should be. Credit unions weren't looking at 28% tax going forward. The economic effect would have been to shorten the phase-out period to somewhere between two or three years as opposed to the five years that was indicated.
In terms of how it happens, when we're drafting we try to make our best evaluation of whether we have things nailed down.
As you probably know, all the measures that are included in this bill were released for consultation in September. The measures that are more complex or would benefit from consultation tend to be put in the second bill and are released for consultation, and this gives practitioners a chance to review the legislation.
I would note that we didn't get any comments on our proposed fix with respect to credit unions. Everyone seems to accept that it works.
We thought that we had it dialed in and ready for BIA 1, but we did not.