Finance committee  The corporation could fund the purchase. Here, it actually costs the corporation $2.75 million now to pay $2.75 million.

Finance committee  Right, so we end up with a net tax of under 10% in Ontario today in that same scenario, but in the last column there, as I was showing, what would have happened—

Finance committee  We would like to just caution, again, that if we take away the capital gain rate and have it all at dividend rates, the consequence would be 101%.

Finance committee  We'd have to pull $5.2 million out of a company worth $2.75 million. The math doesn't work.

Finance committee  They absolutely are.

Finance committee  It depends on whether it's an individual lending it or a corporation lending it.

Finance committee  If it's an individual lending it, they're taxed at the T4 income rate.

Finance committee  They would be. In any situation where the interest is limited, there's going to be a double-tax component. The recipient of the interest is going to pay tax at either their corporate rates or their individual rates, whatever the case may be.

Finance committee  When it's an individual who lends, that's correct.

Finance committee  They could be. I would like to reiterate that with interest deductibility limitations in other countries, they did it with three prongs. They dropped corporate rates at the same time.

Finance committee  Currently in the Income Tax Act, there are restrictions on deducting interest, so you can deduct interest only if it's for the purpose of gaining or producing income.

Finance committee  If it's for capital in nature, you can't deduct it anyway. What we think is happening is that there are some cross-border transactions where the interest might be leaving Canada without being subject to tax. If that's the case, then they should be focused on that one issue.

Finance committee  We agree with that. We think there are a lot of unintended consequences. I don't think we have even thought about what they would all be yet. There are far-reaching effects even when the economy is not so great, and there might be losses for businesses. Now, in times of losses,

Finance committee  We have been here many times over the years to talk about the TOSI rules. These rules are very punitive to family-owned businesses. They're very punitive to the spouse. There is this general presumption that someone maybe isn't doing his or her fair share to earn the income out o

Finance committee  When the capital gains exemption was first brought in, there was a worry, I think, that you would extract money in self-dealing transactions with a capital gains exemption.