International Trade committee  I can only repeat my previous answer. I will undertake to see if that is something we can provide to the committee.

International Trade committee  First of all, I don't think we necessarily regard a tax cut as being a negative repercussion. Reducing the taxes by $180 million means there's $180 million more in incentives to invest in Canada, because there's less tax applying to the investment. You've raised a very perceptive question with respect to the foreign tax credits, and it points up that the answer I gave you before requires some elaboration.

International Trade committee  I would say so, yes.

International Trade committee  Those numbers have not been published, but I can undertake to see if we can provide them.

International Trade committee  That would be a fair assumption, except for one important fact, which is that the numbers are a combination of withholding tax for both arm's-length and non-arm's-length payments. The treaty proposed--and the budget contemplated that the treaty would propose--that the withholding tax on arm's-length interest would be eliminated immediately, as of January 1, 2008.

International Trade committee  That's right. Because of the exemptions already in place, less money is collected in respect of withholding tax on arm's-length payments than on non-arm's-length payments.

International Trade committee  I'm sorry; do you mean for an individual year, or in the total?

International Trade committee  Again, I don't have those numbers with me today. I believe estimates have been made; I don't believe they've been public. I can undertake to see if we can provide them.

International Trade committee  It has not been the subject of a revenue estimate, but I think I can confidently speak to it nonetheless. I would suggest that the revenue cost is not that significant, because in the main people were not using LLCs because of the problems that arose under the Canada-U.S. treaty with their use.

International Trade committee  Yes, I agree with that, but they would be used instead of something else. That is, if an American investor wanted to invest in Canada, knowing that the LLC was the ideal way to make that investment because of its flexibility for U.S. tax and commercial purposes, the problem they ran into under the current Canadian tax law meant that the LLC simply wasn't used.

International Trade committee  Forgive me, I thought you'd asked two questions and I'd answered the first. With respect to the costing, the fiscal impact, we don't generally cost the effects of our tax treaties, but in announcing a change to our income tax treaty policy in this year's budget, we included cost figures for that.

International Trade committee  I apologize. I'm not in full voice today. The estimates included in the 2007 budget for the elimination of a withholding tax were $10 million for 2007-08, and $180 million for 2008-09.

International Trade committee  I'm sorry; do you mean the collection of withholding tax in respect of interest, or withholding taxes generally?

International Trade committee  I don't have those figures with me. I believe we could obtain them. I could tell you in very rough terms that the withholding tax in respect of Canada-U.S. interest payments is approximately half of the world total, so very generally you'd take these numbers and double them and you would end up with the withholding tax associated with interest generally worldwide--or were you asking specifically about the figures for the U.S. in the last couple of years?

International Trade committee  Presuming adoption of the treaty, it deals mostly with the past. In the future, if there is no tax obligation because the withholding tax is eliminated, the payments will be taxable only in the country in which the lender carries on business and is resident. But today the situation you've described is correct.