Canadian Heritage committee  It's kind of a—

Canadian Heritage committee  It would very much depend on the circumstances and whether ultimately the provider is the registrant for GST purposes. Perhaps I could speculate—

Canadian Heritage committee  —but I wouldn't be speaking with knowledge.

Canadian Heritage committee  As I said, there are rules that have been in place for quite some time in respect of the ability for businesses.... In general, businesses can claim a deduction for expenses that they incur to earn income. That's generally, but not in all cases. There are certainly special considerations, but generally that's the principle: that businesses incur expenses and they can claim those.

Canadian Heritage committee  In the case of newspapers, in respect of advertising in a newspaper, a full deduction can only be claimed in respect of advertising in newspapers that are owned by Canadians. There are certain other rules in respect of magazines and broadcast media as well. Those are there to promote certain cultural goals and were put in at a time when those were the primary sources of media that Canadians used.

Canadian Heritage committee  Well, I guess the question that comes to mind is that those rules in respect of newspapers and magazines are more of a cultural policy, but the tax system promotes that policy. The question for the government, I guess, and for the committee that's looking at this becomes, is that a cultural policy that should be promoted with the tax system—

Canadian Heritage committee  That is my understanding: that there are no limitations on the deductions that can be claimed on advertising taken out in—

Canadian Heritage committee  Yes.

Canadian Heritage committee  I would say what I was saying in respect to the previous question. When we look at how to determine the revenue loss in coming up with an estimate, there are instances where an individual's experience with purchasing things online.... If I wanted to buy something and there was a store where I could buy it, but I bought it online, then that company may be registered, and the online purchases are subject to tax.

Canadian Heritage committee  Ultimately, the retailer might know more. I think we're a bit of a ways away from whether the financial institution could—

Canadian Heritage committee  I would say in regard to the experience of other countries in terms of imposing a requirement on a foreign-based vendor to collect and remit the sales tax—the value-added tax in such cases—on sales to residents in those countries, that it is something that other countries have done.

Canadian Heritage committee  I'm certainly not aware of specific supports that other countries have through the tax system that are devoted to that type of local media and small newspapers. The limits on deductibility of advertising expenses set up to apply with respect to Canadian newspapers are unique to Canada.

Canadian Heritage committee  I guess it's certainly not for me to say to the committee what can and can't be done. What I would reiterate is that from a tax policy point of view, when we look at a tax policy proposal, we're looking to see if it's the most efficient and effective way. Is that the best use of the tax dollars?

Canadian Heritage committee  As Madam Laflèche mentioned, for confidentiality reasons, whether an individual company pays or doesn't pay tax, that's their business with the CRA. I will say, though, that when we look at the size of the retailing that goes on in the e-commerce world, and when we think about how much money is out there, it's complicated to estimate, because a lot of transactions that occur are business to business.

Canadian Heritage committee  As to the work on the base erosion and profit shifting that the OECD was doing, if I remember the origins correctly, there was a proposal that the member states of the OECD took up just to say, is there work that we can do? Then the G20 countries worked in coordination with the OECD to ensure this work was done.