Thank you, Mr. Chairman.
Thank you, sir, for the question, which was about whether tax reform is more important to the Canada-U.S. relationship and Canadian competitiveness, I believe, than NAFTA. I think it's a very important question and a very smart question to ask.
To set a little bit of context, the President campaigned on repealing NAFTA and taking the United States out of TPP, the trans-Pacific partnership. The response of the congressional Republicans to that was that while they didn't like NAFTA, they thought a better way to deal with these issues would be through tax reform. As you quite rightly outlined in the question, you see a whole series of proposed measures coming from the House Republican leadership on tax reform that they intended to incentivize exports and disincentivize imports to try to get more companies to create things to manufacture here in the United States and then sell them abroad.
That was the policy reaction, because Congress really doesn't want a tough vote on NAFTA. They would rather deal with a multitude of things through tax reform, including trade policy. That's sort of the context—the border adjustment tax maybe being a way, instead of renegotiating NAFTA—that was the thinking of Chairman Brady, of Paul Ryan, the Speaker of the House, and of the House Republican leadership.
We haven't had comprehensive tax reform in the United States since 1985. Think about where you might have been in 1985. That's a long time ago. It looks like the President is intent on some kind of tax policy reform, but what form it takes and what it looks like will be the subject of massive internal discussion in the United States. On border adjustability, for example—you didn't point to it, but it's related—you have whole coalitions in the United States of companies and interest groups that are for a big border adjustment tax, because they're mostly exporters. Then you have people, companies and stakeholders, who are really connected to the global supply chain and the North American supply chain who think border adjustability would be a disaster.
The politics, then, are quite divided in the United States. I think you rightly point out that if the U.S. succeeds in lowering the corporate tax rate to a level that's closer to what Canada has, which is relatively lower.... Canada enjoys a very good economic competitive position for lots of reasons, and the tax rate is one of them. If the U.S. gets closer to that, it presents a challenge to Canada, for sure. I know that the Business Council of Canada and other groups here are looking at Canadian competitiveness in light of potential tax reform.
You talked about the one-time repatriation of foreign proceeds. That is definitely something that sticks in the craw, if you will, of many U.S. policy-makers. You've seen the phenomenon of inversions, whereby a company will leave the United States, move its corporate headquarters elsewhere—which is a legal thing to do, but not a patriotic thing to do—to benefit from the relative discrepancy in tax policy.
There is definitely an appetite to deal with all of those things. If the United States is successful in lowering the corporate tax rate, in incentivizing exports over imports, in putting in preferences on procurement for “buy and hire American”, that success presents a very, very important challenge to Canada, to Canadian businesses, and to those of us who are really interested in the integrated nature of the Canada-U.S. economy.