With all due respect, I would like to point out that, as a general rule, the rate in effect in these tax havens is 0%. We want to ensure the competitiveness of Canadian businesses, but, according to subsection 5907(1) of the Income Tax Regulations, the big Bay Street banks, for example, can artificially relocate the activities they carry out in Toronto or anywhere else in Canada to tax havens. Under the regulations you just explained, those banks pay about 0% on their most profitable activities, namely on those done here. Needless to say, I am not satisfied with the explanation given to us.
I should mention that, somewhat along the same lines, Barbados is one of the few, if not the only, tax havens with which Canada has a tax treaty. Article XV of that treaty specifies that a Canadian or other company cannot use the avoidance of double taxation as a reason for resorting to a tax haven, that is, to artificially relocate activities on paper only.
Subsection 5907(1) of the Income Tax Regulations struck down that article. It happened just when Paul Martin had registered his company Canada Steamship Lines there.
To your knowledge, what was the rationale for striking down article XV?