Finance committee  I would be happy to do so. I will try to make it as clear as possible. As I said, it attempts to transform ordinary income into half-tax capital gains. Let's say I want to invest in a bond portfolio and I'm going to earn so much interest income. That interest income is fully taxable to me as ordinary income.

Finance committee  I suppose I should add that this was a description of the first generation planning. This third generation planning exploited an exclusion in the character conversion rules that was intended to apply in the case of a mergers and acquisitions style of transaction, where you're buying shares at some point in the future because you're buying a company.

Finance committee  For each of the measures announced in the budget.... This transfer pricing measure was in the 2019 federal budget. A number of other integrity measures were announced in the 2021 federal budget. Each of the supplementary annexes that accompany the budget provides a table of the expected revenue increases or decreases associated with each measure.

Finance committee  For this transfer pricing measure, no revenue was booked because it was a clarifying amendment. However, in terms of the integrity measure, the international integrity measures announced as part of budget 2021.... I don't have that information at my fingertips as they're not included in this bill, but those amounts would be reflected in the budget's supplementary information tables.

Finance committee  When the character conversion transaction measure was announced in budget 2019, there were no specific numbers booked. It was largely a preventive measure based upon a new market development. The character conversion transaction rules were introduced back in budget 2013 to prevent the conversion of ordinary income into capital gains.

Finance committee  Under the transfer pricing measure, I could speak to that first. Then, if there's a question on the fiscal impact of the cross-border securities lending arrangement rules, hopefully one of my colleagues could mention that. It's from budget 2019, and it would be in the table for that.

Finance committee  It's a question of tax avoidance. This isn't a case of tax evasion. It is the misuse of a system that had developed in order to help prevent double taxation, in order to achieve unintended tax benefits. These are legal tax avoidance techniques and not criminal tax evasion.

Finance committee  That's correct.

Finance committee  Agricultural co-operatives can pay patronage dividends to their members. This would extend an income tax deferral on the amount of any patronage dividends received until the time that the shares are exercised. The specific issue is that when these agricultural co-operatives pay patronage dividends to their members, that can carry with it certain immediate tax consequences, absent this deferral in the act.

Finance committee  As you noted, the change that can require repayment of the Canada emergency wage subsidy in respect of active employees applies prospectively, starting in June, for those periods of the subsidy, and it operates by looking at the increase in top executive compensation between 2019 and 2021 for certain public companies.

Finance committee  Thank you, Chair. It compares the remuneration paid to top executives, generally the top five executives, in a publicly listed company between 2019 and 2021, and to the extent there's any increase in that additional remuneration, it can require a repayment of the wage subsidy for active employees paid during those periods.

Finance committee  I don't know. I apologize if I misspoke in saying there was a consultation in the sense of a formal consultation. Certainly, it is something that was reported in the media and that we heard about: that the wage subsidy had been going to companies that had paid dividends or had increased top executive compensation, or what have you.

Finance committee  I can provide some information on that. Just for broad context, for many decades there has been a set of health and welfare trust rules that were largely based upon Canada Revenue Agency administrative policy and not a legislative set of rules. In 2010, the employee life and health trust rules were introduced into the act, which provided a specific regime set out in the legislation to provide these kinds of benefits to employees.

Finance committee  I would defer to my colleague, Pierre, on the impacts to the fiscal framework. As I mentioned, the specific types of benefits that could now be provided were the death benefit up to $10,000, paid leave such as for bereavement or jury duty, and counselling benefits for mental health purposes.

Finance committee  You're absolutely correct. It cannot extend past the end of November without a legislative change, based upon this bill.