Mr. Speaker, the question may be addressed on many levels. I will not be able to provide all the answers in the one I am giving now.
There are two specific aspects. The first is that all the resources invested by our businesses to comply with the Income Tax Act and all tax legislation are resources that cannot be spent or allocated elsewhere, on research and development or international marketing capability. There are many areas where those resources would probably be better spent. Unfortunately, they must be allocated to tax planning, which is necessary because of administrative complexity.
The second aspect concerns competition between nations. This is competition that I consider somewhat fictitious, but it nevertheless exists and must be taken into consideration. Some jurisdictions, countries wishing to lower their tax rates for large businesses—what we call tax havens—attract some businesses, or at least their parent companies, and make it much harder to ensure that those businesses will contribute to Canada's well-being through the tax system.
Industrialized countries have taken many measures, through the OECD, for example, but much work remains to be done to ensure that there is international co-operation and that businesses operating in all countries with tax systems similar to ours do not play countries against each other in a race to the bottom.