Finance committee  It was the second or latter aspect that I was speaking about in terms of what I understand to be the constitutional question that some have raised. It's suggested that there has been a charter issue. That's been examined by our Minister of Justice or the Department of Justice. But I'm not at liberty, and I'm certainly not qualified, to speak to the opinion.

Finance committee  Yes, thank you. I was participating in that parliamentary briefing and made the point that we didn't have it then, but we'd use it as notice to ask our CRA colleagues. I'm sorry, we have the number. I'm just having trouble locating it. I'll run from memory. I think I have it right.

Finance committee  Right. First of all, whether or not somebody is subject to U.S. tax, as a U.S. taxpayer, as a U.S. resident, or as a U.S. citizen, is a question of fact or law, or mixed fact and law. That stands separate from the intergovernmental agreement itself. The intergovernmental agreement is strictly about information reporting.

Finance committee  First of all with the earlier question, I had made reference to Canadian citizens, yes. I thought we were talking about U.S. citizens living here or American residents, so thank you for pointing that out.

Finance committee  The second point, although it wasn't your question, I will say that I think it should be emphasized that there's a difference here between what the U.S. does in terms of its tax base, including taxation of citizens, and what the intergovernmental agreement does. We don't tax citizens.

Finance committee  Yes, thank you. By virtue of the model or the intergovernmental agreement, and this was a very important point to Minister Flaherty, we would use the protections of the existing Canada-U.S. treaty on our own and our own protections. Under the Canada-U.S. treaty and indeed our other treaties, this information can only go to the revenue authorities, the IRS.

Finance committee  That's right. That's my understanding.

Finance committee  On the grants themselves, and the earnings thereon, my understanding of the answer we've received is that those are taxable on receipt by the beneficiary.

Finance committee  Yes. The specific question we've had a discussion with the U.S. about was in relation to the grants themselves. On that, they've said that because of the conditionality of it, it's not clear that these will go out to the beneficiary. They would be included in income for U.S. tax purposes only at the same time and to the same extent as they would be for Canadian tax purposes, that is, on payout.

Finance committee  You made reference to contributions. If you're talking about capital contributions by the parent or other subscriber—

Finance committee  Right. The question wasn't discussed with the U.S., by my recollection, but I don't believe there's a question that they're taxing it, because that's not income by any measure. The question we had before, and that we asked, was about the grants themselves, the government grants that go into these.

Finance committee  As we do in the grants themselves is what we understand.

Finance committee  Is this question in relation to the intergovernmental agreement, or more generally in terms of U.S. taxability?

Finance committee  Let's take the position—

Finance committee  First of all, the U.S. sought as much as possible to have identity in the agreements they negotiated with every country. Understandably, if they're trying to negotiate with the world, and I think they've signed as of today 30 of these agreements, they weren't much minded to be very novel.