Finance committee  Mr. Chair, for clarification, the escalator that's going to be used for the CHT is going to be exactly the same one that's used in the equalization program, so a three-year moving average of nominal GDP.

Finance committee  Thank you. My understanding is that the government took the decision to limit the escalator last year, but this year all we're doing is confirming the mechanism and how the escalator is going to be calculated.

Finance committee  Exactly.

Finance committee  There's no interaction at all with the changes that were made to the equalization program. If you are referring to the changes that were effective in 2009-10, there's no interaction.

Finance committee  There's no interaction between the equalization changes and the cash transfer of the CHT, no.

Finance committee  The answer to this question is a bit complex. You're getting into the nuts and bolts of how the CHT is actually calculated. Part of the CHT calculation, as you're rightly pointing out, deals with the tax point transfer. But the tax point transfer, the equalization system, also takes into account the ability of provinces to raise income taxes.

Finance committee  It was a one-time adjustment. It was only for 2009-10 and 2010-11 that an additional payment was set out under the act.

Finance committee  Any of the remitted profits from Hydro One will be part of the business income tax base.

Finance committee  The policy is, the entire amount of remitted profits of a crown corporation engaged in hydroelectricity generation is taken into account on the natural resource basis, and Hydro-Québec is a corporation engaged in hydroelectricity generation.

Finance committee  I said at the last meeting that if Hydro-Québec were split into separate companies, the policy says that the remitted profits, in their entirety, of a crown corporation, if it's engaged in hydroelectricity generation, is part of the natural resource basis. So if Hydro-Québec split itself in such a way that a new, separate company was engaged just in transmission and distribution, clearly, we'd have to revisit the equalization treatment.

Finance committee  Quebec's demand is that the transmission and distribution profits of Hydro-Québec should be moved to the business income tax base in the same way that the profits from Ontario's Hydro One are treated.

Finance committee  Let me first reiterate what I said about the $250 million. I said the $250 million was the estimate that was put forward by the Province of Quebec. I'm familiar with the $250 million that was put forward into the budget document. That $250 million has been calculated only on the basis of removing the transmission and distribution profits that have been reported by Hydro-Québec and redoing the equalization calculation.

Finance committee  I have just said that the policy is that we take the remitted profits of the full corporation, and Hydro-Québec is one corporation.

Finance committee  I do know they report their figures separately. I am aware of that. Other crown corporations that are engaged in both hydroelectric generation and in transmission and distribution do not have the same degree of detail as Hydro-Québec.

Finance committee  I can't confirm that with any certainty, but I would imagine they have, because they were provided with these amounts back at the meeting of finance ministers in Whitehorse, so any provincial budget that has happened since that time would have taken these payments into account.