Finance committee  Thank you, Mr. Chairman. I think it's a fair question. It certainly was recognized in the international negotiations that led to this common reporting standard that this imposes a burden on institutions and that it has a cost. An attempt was made to try to develop principles and rules that could be applied to minimize those costs to the extent possible.

Finance committee  In 2017-18, the two measures in the act are expected to raise about $70 million a year of revenue, and on an ongoing basis it's a little bit lower than that.

Finance committee  It's a type of planning that had not become infrequent. The government has provided an estimate of the revenue gain from restricting the availability of the small business deduction. It has always been the long-standing policy that a business, whether it's owned by one individual or by several individuals operating together in a partnership, should be entitled to one small business deduction, so they're entitled to the low small business rate on $500,000 a year of taxable income.

Finance committee  If I may, Mr. Chair, I think the issue is essentially the same. What the Income Tax Act is trying to do in these cases is recognize that in a regulated system that involves creating allowances to emit or control a substance and then requiring firms to provide the permits in order to make the emissions, those permits have value that fluctuates up and down, so there's a potential for profit and loss in those situations.

Finance committee  Yes, I think it's fair to say that we're codifying a set of specific rules, as distinct from relying upon very general rules.

Finance committee  Mr. Chairman, I think the government recognizes that for smaller institutions, regulatory requirements of all kinds have, relative to their size, become more significant, and I think that is a real issue, as you indicate. As I say, the intent with this standard has been to try to have it operate in as streamlined a way as possible and, with respect to accounts that are less than $1 million, to allow institutions to do a relatively straightforward paper-based search through their records.

Finance committee  Certainly it's understood, in that case, that the requirement with respect to existing accounts in place on July 1, 2017, when it's proposed the system will come into place, is that institutions can rely on the address they have on file for a person. The requirement is essentially that they identify any non-residents they have on file.

Finance committee  The standard is extremely detailed. It's not a set of broad principles; it's a set of quite detailed rules, which are reflected in the provisions of the bill.

Finance committee  That's correct. The view of the Canadian government has been that the common reporting standard is an important tool to ensure reporting of assets and income that individuals have abroad; it's considered to be an important tool in the fight against international tax evasion.

Finance committee  Thank you, Mr. Chairman. The agreement with the United States with respect to FATCA, of course, was a bilateral agreement. The common reporting standard is a similar system in the sense that it involves a requirement on financial institutions to identify accounts that are held by non-residents and to share that information with the CRA, which will then provide it to the tax authority of the person's residence.

Finance committee  Thank you, Mr. Chair. Yes, I confirm that the honourable member, the parliamentary secretary, is pointing to the impacts that are set out in the budget plan in the annex that we have just been discussing on page 256 of the plan, which again are for the ensemble of measures in the budget.

Finance committee  I think in this case, the department did, in order to support the budget, put forward studies or look at the impact of the budget as a whole, and it grouped the measures together. I can point you to the budget plan for 2016. Annex 2 of the budget sets out the economic impact of budget measures.

Finance committee  The parliamentary budget officer pointed out that yes, it is a negative impact, but the figures in the budget go out to the second year of implementation, 2017-18. The parliamentary budget officer finds a negative impact on GDP of $30 million. That would have been a rounding error in the figures that are presented here.

Finance committee  Yes, Mr. Chair, I can confirm that we have seen the report.

Finance committee  The Department of Finance has not done an analysis of the broader economic impacts of this individual measure, but I can say that the approach taken by the parliamentary budget office here is similar to the kind of analysis that is done by the department. I'd just say that these kinds of studies rely on what we call fiscal multiplier effects to look at the broader economic impacts of a particular policy change.