Finance committee  No, sir. What I am saying is that the corporations are applauding the measures because they suit them. That's what I'm saying. Do not try to distort what I said.

Finance committee  I think that the 38% rate is the average rate the Department of Finance uses as a general rule. It is highly likely that retirees would be subject to a lower tax rate, but it is also highly likely—and I know a lot of retirees for whom this is the case—who would be taxed at 38% or higher.

Finance committee  —it would still be a higher amount. Since RRSPs were created, people have piled away hundreds of billions of dollars. As the population gets older, this money is starting to be taken out. The aging population means that the pace at which people will withdraw their RRSP and RRIF money will speed up.

Finance committee  The point I have tried to make is that presently for the so-called fully taxable accounts, these people are paying more taxes than if they invested in corporations. That also includes the taxes paid by the corporations.

Finance committee  What I'm saying is that if all the trusts were to reconvert to corporations, the government would end up with much less revenue. That's what I am saying. This is the point I make in tables 1A, 1B, and 1C of my document entitled “A Recipe for Tax Revenue Loss”. It is documented there with the tax rights.

Finance committee  It is, Mr. Chairman, in terms of both the medium and longer term, but also in terms of the present situation, the annual budget. I think I have emphasized that point. In the longer term, the government will lose, only if the present value of the future taxes collected is less than the taxes forgone at the moment.

Finance committee  The $500 million amount is continuously changing. It is based on a terribly flawed methodology and a number of slightly far-fetched hypothesis. It is also based on the premise that cooperations pay the normal tax rate of 35%. Reference was also made to RRSPs, RRIFs, and pension funds.

Finance committee  I think that the underline reasons are quite different. The lost of tax revenue is not an issue here. The document I prepared, “or how to generate loss of tax revenue ”, gives you an idea of how tax rates will change under such legislation. Why is the government doing this? Perhaps we can ask the gentleman who represents the interests of business which feel threatened by the presence of trusts.

Finance committee  Yes, I think I do. The governor referred to inefficiency issues, however he also said that benefits could be derived from trusts. A series of criteria and regulations should of been developed, in my opinion, to prevent what I referred to as undesirable conversions. This would have averted the complete demise of the sector, and at the same time forestalled the damage and ramifications which result from such conversions.

Finance committee  Thank you, Mr. Chairman. I would ask the committee members to refer to the written statement and papers that I have tabled, to better understand the very telegraphic points I will make. My thesis is that it is the implementation of the legislative proposals, and not the existence of the trusts, that will lead to a loss of tax revenue.