Finance committee  Exactly.

Finance committee  I can't answer very definitively regarding BDC, because we have not had a long history of collaborative arrangements with BDC, unlike EDC. EDC is a very close partner of ours; in fact, of all the banks, TD does the most business with EDC. It's been a wonderful partnership, and I really have a sense of confidence that if a loan proposition is made to us with which we're uncomfortable, we will be able to involve EDC and make an arrangement that will allow them to go forward.

Finance committee  That's a question I have a great deal of difficulty answering because it was so simple for me. At that moment in Canada, other entities were buying a lot of asset-backed commercial paper. There was a premium of approximately 17 basis points, but there was a lot of risk, some of which, I thought, was unknown.

Finance committee  Yes, that's true. Actually, if you had invited both Glen and I to appear, you wouldn't have gone anywhere, because he's at the top of forecast pile and I'm at the bottom. So we would have just cancelled each other out, and you would have been right back where the parliamentary budgetary officer was.

Finance committee  I was trying to get back to—

Finance committee  I thank you very much. Good morning to everybody. I submitted beforehand a set of charts and tables on credit. I think I see it in front of everybody. I won't go through those one by one but just make some overview remarks about them. One of the reasons I did them was to try to put the discussion of credit in a broader context.

Finance committee  Yes.

Finance committee  Cutting the GST is a wonderful way of giving back tax money to people because this is a wonderful income distribution, but it has no other redeeming qualities, in my mind. Vis-à-vis the economic challenges we talked about, particularly in the manufacturing sector, the forestry industry, or particularly the more general implications for productivity in Canada, it does absolutely nothing on that front.

Finance committee  Well, if you're saying how do we respond to that by limiting it, my answer would be no.

Finance committee  How we would respond to the competitive pressure, absolutely, I think that is the be-all and end-all of the Canadian economy. As I said, they've basically knocked out the lower value-added chains. Actually, the fastest growing imports in Canada, and even in Ontario, our industrial heartland, and Quebec, are capital-intensive machinery and equipment.

Finance committee  No, but if I can add another word, I'm just worried about the context. Even if they did, there's not a big impact from interest rate to the exchange rate.

Finance committee  Yes, because there's one common factor that's been going around the world, in that the emerging economies—China, Vietnam, and South Korea—have basically made an extraordinarily serious run at the lower value-added chains in manufacturing right around the world. You've seen that response.

Finance committee  On the credit crunch, I didn't want to leave the impression from the way you've phrased your question that we are seeing a great deal of difficulty in financing Canadian businesses. We do have weekly statistics on bank loans to the corporate sector, and we've been following those very closely since the credit difficulties began in July.

Finance committee  I think what he's talking about, particularly the payments coming from the United States, is quite a bit different. I thought where you were starting is at what we're typically thinking of as the credit crunch as it's falling through Canada and the United States, and asset-backed commercial paper is....

Finance committee  We have not seen the banks—actually either in the United States or in Canada—restrict the availability of credit. The Bank of Canada has estimated that the overall change in credit, particularly the sharp run-up on selected instruments of very short terms is equivalent to about 25 basis points of interest rate tightening.