Finance committee  I think the summation of my answer is that I can't, that is true. There have been a lot of numbers thrown around on the effects of the budget proposal. It is not clear to us that those estimates are entirely accurate. Indeed, it's a difficult thing to measure. While the Canada Revenue Agency might determine, on audit of corporations' tax returns, what proportion of their debt relates to foreign investment and, as a subtotal, what proportion relates to double-dipping on foreign investments, that's not something we know with precision at this stage.

Finance committee  I think it was in 1980.

Finance committee  I think it does enter into the consideration that goes into determining whether to have tax treaty negotiations and seek to get a tax treaty, because in the absence of tax in the other jurisdiction, one of the objectives of a tax treaty--to eliminate the risk of double taxation, or to reduce, at least, the risk of double taxation--doesn't have that much traction.

Finance committee  As one of the factors, yes.

Finance committee  Probably you're referring to international business corporations, IBCs.

Finance committee  You'll be expecting I'm always saying I can't give you a straight answer. The international business corporations were in place when we negotiated the treaty with Barbados in 1980. A reference is explicitly made to them in that treaty.

Finance committee  Without wanting to convey an impression I'm an authority on all of the factors that went into this, I think there are at least two things that could have borne upon it. One is that there's just greater foreign investment by Canadian companies and other companies throughout the world.

Finance committee  I've forgotten.

Finance committee  I'm sorry, Brian, but we were diverted and I've forgotten the other point.

Finance committee  It has been some time since I checked, but I believe the rate was between 1.25% and 2.5%.

Finance committee  But, sir, just to be fair to our colleagues and friends from Barbados, I'm not sure if that rate has changed in the time since.

Finance committee  You've accurately described the difference between the two in result, in that we don't tax and the U.S. will tax with a credit. My hesitation to confirm all of what you have said is that you included an assumption that the income bore underlying foreign tax roughly equal to Canadian tax rates.

Finance committee  In certain cases--an example being our tax shelter reporting requirements--we have an obligation on taxpayers to identify aggressive tax planning structures, or structures they're marketing to the public as producing significant tax benefits. I don't know that disclosure or non-disclosure has been an issue with the sorts of double-dips we're talking about.

Finance committee  No, I can't. I don't believe that was the intention of the regulation. Prior to 1994, we did have a rule in our regulations that attempted to say that treaty countries, countries with which Canada had a tax treaty, qualified for exempt surplus treatment. That listing procedure was not very effective.

Finance committee  Subject to these proposals, the current law would in some instances allow a corporation to claim a deduction in Canada and a deduction in another country.