I alluded to the lost revenue calculation on consolidated corporate filings in my presentation. There are strategies and techniques that permit it. I'll give you a perfect example, which is the vertical amalgamation of losses going to Profitco. Losses become available to Profitco the day after.
The problem with this is that it's complex. As you say, it's great work for lawyers and great work for accountants, and it's unnecessarily expensive. It can also put a business potentially at risk if there's an unfunded liability in the Lossco, generating losses. The amalgamated entity would assume that liability and put it at a disadvantage.
So from a lost revenue perspective, I don't see that there's a great deal that would otherwise be lost. There would be a cost saving to the business earning the income itself in view of the fact that it has simpler compliance requirements, simpler compliance techniques, and less of a professional fee burden on its cost of doing business in Canada relative to a business in the States. That would be a starting point for the valuation of it.
I am a chartered accountant. I'm a partner with a national firm. When we have different business entities segregated into different corporations, there are techniques that can be applied, as I mentioned, but they're also not without risk. For example, there's transfer pricing domestically. There's a wonderful word in the Income Tax Act called “reasonable”, and that causes more grief for the adviser and the advisee in getting concrete, solid advice they can sleep on as to what is reasonable, because one person's reasonable is another person's unreasonable. It's an uphill “guilty until proven innocent” type of process when you fight an assessment on that basis.
This would eliminate the uncertainty caused by that. It would create, at the business level...the money he doesn't spend on the professional advice goes into the income pool, which generates more tax revenue on the same basis. I think it would require an economic study to give you a concrete example, but speaking from my own experience, and perhaps piggybacking on yours in your other life, I'm not so sure the lost revenue would be significant--if any.