Mr. Speaker, the answer is as follows: a) It is estimated that federal tax revenues in 2004 were $300 million lower than they would have been if FTEs flow-through entities, which include income trusts and limited partnerships, were structured as corporations. These estimates were based on financial statements of FTEs for 2004 and involved many other parameters that are outlined in the Department of Finance's consultation paper: “Tax and Other Issues Related to Publicly Listed Flow-Through Entities” released on September 8, 2005 (see http://www.fin.gc.ca/toce/2005/toirplf_e.html). Comparable estimates are not available for years prior to 2004 because of the significant data and estimation requirements including the need to review FTE financial statements for prior years. Data and methodology issues are outlined in detail in Section 5 of the consultation paper.
b) A reliable projection for future years is not available because such an estimate depends on a number of very important factors that are difficult to forecast. The challenges with making projections are outlined in Section 5d) of the consultation paper. These include, among other things, the potential growth of the FTE market and the proportion of FTEs owned by Canadian tax-exempt investors such as pension funds.
c) Budget 2006 estimates the cost of the enhanced gross up and dividend tax credit for dividends paid by large corporations to be $375 million for 2005-06 and $310 million for 2006-07.