Thank you, Mr. Chair. With both corporate income tax and personal income tax, as the Minister mentioned, the revenues are subject to adjustments for prior years. So the number…. In the Main Estimates documents, the numbers include both a forecast of entitlement for that year, in addition to adjustments for prior years, because the estimates have to be adjusted to reflect the actual tax that was received for those years. In some years those adjustments can be positive, and some years they can be negative.
With respect to the reduction in corporate income tax estimates for ’08–09 versus ’07–08, the corporate tax that was paid to us on the basis of Finance Canada estimates for 2007–08 was about $100 million. Because we expect that the actual number will be lower, we are including a negative
adjustment in ’08–09 of about $30 million. That, then, reduces the forecast revenue for ’08–09, because we are factoring in a negative adjustment for the prior year.
For personal income tax, again, we are actually expecting some growth in personal income tax revenues between ’07–08 and ’08–09. There are some negative adjustments for prior years, but underlying the growth in personal income tax is expected growth in income over the next year.
With respect to interest income, the $14 million that was accrued in 2006–07 reflects the fact that the government’s cash balances in that year were very high. At the end of 2006–07 we made a very large payment back to Canada to reflect an overpayment of corporate income tax. At that time, when the 2007–08 Main Estimates were being prepared, we anticipated our cash balances would be low and therefore had a fairly low estimate of interest income. Cash balances were higher than anticipated so that the revenue received in ’07–08 was higher, about $5 million. We expect to have fairly high cash balances for most of the fiscal year this year in 2008–2009, with the balance dropping down towards the end of the year.