Finance committee  I'm not aware of any Canadian studies on how much income of Canadian multinational corporations is put in tax havens and lost through tax evasion or avoidance. But there are some American studies, and the numbers are absolutely huge. There isn't any reason to believe that the numbers wouldn't be comparable in Canada.

Finance committee  I certainly agree with that. There's a long list of problems that you create when you try to deliver these subsidies through the tax system. They're hidden subsidies; they're not transparent. Government's not accountable for them--

Finance committee  Exactly. I can't think of hardly one I would retain, frankly.

Finance committee  I agree with Chris. It is a dilemma. Consumption taxes are important revenue-raising taxes and they tend to be quite efficient. On the other hand, the income taxes are more progressive, so there is a kind of conflict between these two objectives that I talked about. But it does seem to me it was a terrible mistake to reduce the GST in Canada, because it collects a substantial amount of revenue in a relatively efficient way, and if the government wanted to have tax cuts, it seems to me the place to cut taxes would be at the low end of the income scale, on the income tax.

Finance committee  Thank you very much. It's a great pleasure to be here, and I thank the committee for inviting me. I wish you good luck in the important task you've undertaken of examining the federal tax system. Let me begin by speaking very briefly about the purposes of the tax system. The tax system is, of course, simply a policy instrument that the government has at its disposal in achieving its broad social and economic objectives.