Finance committee  I think the rule in the treaty is very broad and similar to our domestic GAAR. I think, as Stephanie and Trevor mentioned two days ago, in the government's view this is going to expand on our domestic anti-avoidance rule, and will therefore capture more circumstances like the one that Trevor mentioned in the MIL case.

Finance committee  There are two specific concerns. One is that because we're introducing this identical wording in so many treaties around the world, I think it subjects Canada to the uncertainty of following tax decisions of foreign countries around the world interpreting the identical provision in similar circumstances.

Finance committee  It would certainly take a lot longer than this process will take. The first benefit is the efficiencies. The second benefit is the focus on the other mandatory aspect of this, which is dispute resolution. Even though the binding arbitration is optional, I think anything that we can do to not clog the courts up more than they are now is a good step in the right direction.

Finance committee  It's hard for me to estimate what the amount would be.

Finance committee  Could I make one quick comment?

Finance committee  I think that's right. We could always renegotiate any of our tax treaties on a bilateral basis. As you said, if you wanted to negotiate bilateral treaties quickly, that could be done by just having more people within the Department of Finance involved in that function and meeting on an expedited basis with our counterparts.

Finance committee  I think article 17 is very important to have because it avoids the double taxation that could otherwise happen. If countries are in a dispute as to what the arm's-length price is and then finally agree on what it is, unless you have the corresponding adjustment, you're always going to have double taxation, which is what the treaties are trying to avoid.

Finance committee  That's quite clearly “no”.

Finance committee  That's really by its nature. The multilateral instrument is really just meant to be an effective way of making uniform changes to all tax treaties around the world. That's the goal of it. As a result, it's limited in terms of what you can put into it with regard to things that Canada as a country would agree, in all of our treaties or most of our treaties, to give up.

Finance committee  There are two main benefits, I think. The first is that this is a very efficient process for amending tax treaties. This is the first time that the OECD or other countries have done this. Traditionally, Canada does all our negotiations on a bilateral basis. To amend over 70 of our tax treaties would likely take a decade just as a practical matter because it's a very slow process to amend bilateral treaties.

Finance committee  I don't want to speak for the Department of Finance on how fast they could get it done, but—

Finance committee  Maybe it's the ambiguity in your question in the sense that I don't know what type of business you're talking about. If it's an active business, then Canada does not tax the profits. If it's passive income, Canada does tax the profits. That's the case whether it's in a treaty country or a non-treaty country.

Finance committee  I'll just be very quick. I think your question is largely addressing our broader domestic international tax system and not the tax treaty network, which is what this addresses. I think your question is more aimed at our FAPI regime and our domestic anti-deferral regime. I just don't think it touches on Bill C-82.

Finance committee  The changes in the MLI don't take effect unless both countries to that ratify it—

Finance committee  —but it's not relevant to....