Thank you, Mr. Chair.
If possible, I'd like to share my speaking time with my colleague Julie Dzerowicz. I'm therefore going to speak for three minutes.
My question will be for Mr. Arnold.
Thank you for being with us today. We are very appreciative of your time.
I have a few questions for you. I'll ask them and if we have time within that period you could answer, but if not please answer in writing.
I will take you up on your offer to send us the list of all the flaws that you see in our general anti-avoidance rule.
I have three questions for you, Mr. Arnold. The first one is about the case that the government lost at the Supreme Court, Alta Energy Luxembourg. This was a case of treaty shopping. I'm worried that our tax base, especially on our natural resources, leaves this country and goes to the benefit of, for example, Luxembourg. The GAAR was argued, but the Supreme Court declined to apply the GAAR.
What's your view on the capacity of the court to apply the GAAR? What could the government do to prevent abusive cases of treaty shopping following this decision?
The second question is that currently the application of the GAAR does not result in the imposition of a penalty. Would it be a deterrent effect if we were to apply a penalty? Would that enhance the effectiveness of the GAAR?
The third question I have for you, Mr. Arnold, is the GAAR applies only to transactions that are currently abusive. This is a test that is sometimes very difficult to satisfy in court as we saw in the Supreme Court case. Is the test for determining if a transaction is abusive under the GAAR effective or not? Could it be made more effective, and if so how?
I know it's a lot of questions, Mr. Arnold, but please, you have one minute to answer.