Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce

Issue 21 - Evidence

The Standing Senate Committee on Banking, Trade and Commerce met this day at 11:20 a.m. to examine and report upon the present state of the domestic and international financial system.

Senator E. Leo Kolber (Chairman) in the Chair.

[English]

The Chairman: We are meeting to examine and report upon the present state of the domestic and international financial system, with an emphasis on venture capital.

Our witnesses are from the Canadian Venture Capital Association, namely, John Eckert, president; and John Bradlow, director and chair of the public policy committee. Welcome, gentlemen. I know that you have an opening statement. We will try to finish by 12:30 p.m.

Mr. John Eckert, President, Canadian Venture Capital Association: Senators, the Canadian Venture Capital Association represents the vast majority of professional investors, service providers, individual investors and some large institutional investors who are committed to the venture capital and also private equity markets. That would also include the buyout sector, some mezzanine finance, and, essentially, any equity investment and debt that relates to the private sector. I am not referring now to the public sector.

To give you an idea of size, last year this group invested about $6.3 billion in Canadian companies. That is for the year ended December 31, 2000. This year we saw something of a tailing-off, given the collapse in the U.S. public equity market, and, in particular, the information technology sectors, which have been hit hard. Nevertheless, the pace of investment remains robust, and it looks like this year we are on track for something in the order of $5 billion.

The membership consists of about 120 individual firms. As I mentioned, they represent venture capital firms, service providers, private equity players and some large angel investors too.

By way of personal background, in my day job, I run McLean Watson Capital. I am a managing partner and one of the two founders. We are focused on emerging sectors in information technology. Mr. Bradlow will take a moment to introduce himself.

Mr. John Bradlow, Director, and Chair of the Public Policy Committee, Canadian Venture Capital Association: I am the senior partner of Penfund, which manages money for pension funds and life insurance companies. We invest that money in smaller and mid-sized private businesses.

Mr. Eckert: I am also the President of the Canadian Venture Capital Association. I also chair the Capital Markets Committee and the Canadian E-Business Opportunities Roundtable, which has presented to the committee in the past, and perhaps will in the near future.

We hopefully know of what we speak. We have solicited input from many of the members. The association is involved in a number of different activities, but working with government to address some of the barriers that we feel Canada still faces when it comes to venture capital and private equity markets is certainly of the highest priority for our group.

Specifically, we have made a number of recommendations in our paper, but we have not addressed everything. We have decided to focus on those issues that we think are most germane to the providers of private equity and venture capital. There are a number of issues, in particular, that we feel if addressed, would have a profound impact on Canadians everywhere. I should also say that notwithstanding that we represent an industry that for the most part is devoted to information technology and life science investment, we believe that the recommendations we have put forward would have great benefits for Canadians everywhere, regardless of geography, industry sector, professional status and the like. The benefits that flow from the investments that our group make have a significant impact on the standard of living of Canadians everywhere.

One issue that is close to our hearts - and perhaps I will speak to it and Mr. Bradlow can participate afterward - is the support that we enjoy from the domestic institutional investment sector. These are the large pension funds in Canada that invest money in different asset classes.

In Canada, the support has been fairly narrow and not anywhere near that which our colleagues south of the border enjoy. In the U.S., for example, there are large, passive pension pools that have accepted the need to have anywhere from 5 per cent to 10 per cent of their funds under management invested in venture capital and private equity, whereas in Canada, it is barely on the radar screen.

There are a number of large public sector funds that have been supportive for the most part, but we believe that they could be more supportive. There are many that are not supportive at all, and there are a number of reasons for this. Typically, Canada does lag in the development of certain products, but there are also technical barriers prohibiting investment by domestic institutions in what we think is an exciting sector.

Specifically, institutional investors today are restricted to investing no more than 30 per cent of their funds under management in foreign assets. That is all well and fine. We are not here to debate that number. However, for technical reasons, when they invest in a Canadian, domestically managed venture fund, those investments are generally counted as foreign property, which makes no sense at all. As a result, they are reluctant to invest in venture capital pools, which are typically limited partnerships.

We have been working with PIAC, which is the Pension Investment Association of Canada, and its members. They have recognized this as an issue and have made very clear their view that if this were addressed, it would be one less barrier restricting their ability to support our investment sector.

One of our recommendations is to change the rules to allow domestic institutional investors to invest in Canadian-managed venture and private equity funds without those investments being classified as foreign property.

That is one recommendation that we feel, if addressed, could have a profound effect on the amount of money that these large institutions would direct to our sector.

Mr. Bradlow: To give some background to the submission we have made, it is important to understand that our industry is extremely cyclical. To give you some idea, Mr. Eckert mentioned that in 2000, $6.3 billion was invested in Canadian enterprises. The figure for 1999 was $2.7 billion, and for 1998 it was $1.5 billion. It will be about $5 billion this year, but we are still enjoying a pipeline from the boom days. The expectation is that it will drop sharply in 2002.

These numbers are disbursements into enterprises. The flow of funds that provide the financing for those disbursements tends to follow the same pattern. This extreme volatility in flow of funds, which in certain periods, such as the recession days of 1992-1993, drops to extraordinarily low numbers well below $1 billion, is a major challenge for our business.

The submission focuses on what we perceive to be the principal barriers to investment by two key funding groups. The first is the domestic Canadian institutions, those being the main pension funds and life insurance companies. The second is essentially the same group, but U.S. based. You will have noticed that the principal proposals we make, numbered 1 and 2 in our submission, deal precisely with these points.

As a final comment, if I may, we believe that the effect of these proposals on the fiscal revenues of the various governments involved should be zero to minimal. In fact, if the goal of encouraging a greater flow of funds into the establishment of small enterprises is achieved, the effect should be positive.

Mr. Eckert: Number 2 in the submission deals with barriers to foreign investment capital. Mr. Bradlow has touched on this.

When a Canadian institution, for example, the British Columbia Investment Management Corporation - which manages the pension assets of the provincial government employees - or the Ontario Teachers' Pension Fund or the Hospitals of Ontario Pension Plan invest in the U.S., they do so side-by-side and as equal players with U.S. institutions in a USLP, or United States Limited Partnership. There is no risk that they will be taxed in the U.S., and funds flow freely into Canada from dividends, interest, capital and capital gains. It is a simple and well-understood vehicle. If you speak to those who understand the U.S. private equity markets and ask why U.S. markets are so vibrant, many reasons are mentioned. However, the free flow of capital from abroad is cited as one of the two most powerful reasons for the success of their industry; the other one being a low and attractive capital gains tax rate.

The same does not hold true for Canada. Understand that, in the U.S, there are large, passive pools of pension assets that are managed by fiduciaries who are very conservative. They take a global view in their responsibilities. The majority of those assets are invested in the U.S., but a portion does go abroad. The countries receiving the foreign allocations are, typically, the European countries, parts of Asia, and Israel, but precious little makes it way to Canada. The reason is that it is difficult for pension managers based in Canada - such as Penfund, Mr. Bradlow's firm, or my firm, McLean Watson - to raise these monies from foreign investors is because there is a risk. Any monies invested by U.S. institutions in a passive way may be caught in the Canadian tax network. If there is any potential for residual risk, those institutions would rather not invest.

Amendments were made in 1999 that partially addressed this, and the law was changed so that investment by passive institutions in Canadian-managed funds would not, in and of itself, constitute carrying on business in Canada and hence be subject to Canadian tax. However, this did not go far enough. Although, technically, structures can now be set up, which involves a U.S. limited partner managed by a U.S. general partner, that does not reassure these relatively conservative fiduciaries in charge of these vast pools of capital that there is no tax risk in Canada.

As a result, we have seen a trickle of money into Canada, but nowhere near the amount of capital that this country and our industry deserve. There is a recognition that we have world-class industries in the information technology sectors - Ottawa, for instance, is definitely a world leader in telecommunications. Canada leads the world in graphics, in business intelligence and in a number of exciting sectors, and yet the amount of capital available from offshore is relatively limited.

In the submission, we are asking that this problem be addressed and that changes be made such that these offshore institutions, primarily in the U.S. but also in Europe and elsewhere, can invest without any tax risk in Canadian funds that are managed by Canadian fund managers. It makes all the sense in the world because the Canadian managers are here on the ground, and they are the ears and eyes for these institutions. Change the rules such that they can invest side-by-side in a limited partnership with domestic investors and know that any gains - interest, dividends or whatever - can flow without tax consequences.

It is difficult to estimate the amount of money that might flow into Canada if these changes were made. I know that there is about $20 billion devoted to venture capital by U.S. institutions alone, and there is nothing to suggest that $1 billion to $2 billion could not make its way to Canada, if these changes were made, within two to three years.

There are a number of other recommendations in the submission, but those two are the most important, and perhaps rather than take the time to go through them all, we can focus on those in particular.

Senator Oliver: We are a committee of Parliament and I am interested to know what negotiations and meetings you have had with the Department of Finance to discuss possible tax changes. Who did you talk to? When did you begin the discussion? What success have you had?

Mr. Eckert: We have had a number of meetings and discussions with various individuals in Finance Canada. We have been working closely with Mr. Kevin Lynch and others.

Senator Oliver: Are they receptive?

Mr. Eckert: They have been receptive to the discussion on pension changes. They understand the problem and they agree that it should be addressed. Whether or when it will be, we are unsure at this time. It sounds like it will be addressed, but no one can say when. In our opinion, it should happen sooner rather than later.

Mr. Bradlow: You will have noticed from our submission that we are dealing with the technical aspects of the Income Tax Act and its regulations.

Some of these provisions are of mind-boggling complexity. In our interaction with the Department of Finance officials, we have been trying to clarify our mutual understanding of what some of these provisions mean. As Mr. Eckert said, we have made a great deal of progress in this respect.

Senator Oliver: Have you made progress with the concept of foreign property that you referred to in your text? You said that you get substantial sums from insurance companies and pension funds, but it becomes a problem when some of their investments are treated as foreign property. Have you discussed this with the Department of Finance and asked why it is being construed as foreign property when it is not, and is not treated that way in the United States? What success have you had with that?

Mr. Bradlow: We have discussed that a number of times. The sense we had is that they are prepared to address that issue on the basis of reality. If a particular investment happens to be a Canadian investment, it will be so treated; if it is a foreign investment, it will be so treated, which is not the way the act presently operates.

Senator Oliver: I have several brief questions, if I may. You said that there are 125 individual firms in your association that do most of the venture capital investing of the $6.3 billion. In addition, there are some large angel investors. Are all of those angel investors known to your association? Is there a published list?

Mr. Eckert: No, far from it. Institutions are public. They do not mind reporting their investment levels and where the money is going.

Angels are a more elusive group. They prefer a low profile. It is difficult to even develop a clear definition of what an "angel" is, because there can be wide variations in background.

Some studies have been done. There was one by a Professor Alan Riding here at Carleton University suggesting that angels provide $1 billion to $6 billion of investment in Canada.

My own view is that that estimate is high. It is probably at the lower range. It also ebbs and flows. Much money came in the "dot-com" boom times. Much of it has not resulted in much in the way of returns. There is less angel investment today than two years ago, but we do not measure that specifically.

Senator Oliver: What percentage of your venture capital has been invested through limited partnerships?

Mr. Eckert: Institutional investors in Canada invest almost solely through limited partnerships.

Senator Oliver: When you get money from pension funds and life insurance companies, what vehicles do you choose?

Mr. Eckert: Limited partnerships.

Mr. Bradlow: The only institutions that will invest in a limited partnership that might be managed by concerns like ours would be those who are not troubled by the foreign property limit, because they have enough room to do so. An investment in a limited partnership is classified as foreign property. There is a category of limited partnership known as the "qualified limited partnership" that is not treated in that way. However, it has certain restrictions of its own that also create problems. We touch on that in our submission.

Mr. Eckert: To put this problem in perspective, there are six or seven large institutions in Canada that are supportive of venture capital, but there are probably 600 pension funds that should be devoting a portion of their monies but are not.

Senator Poulin: Your comments about the competitiveness of Canada in telecommunications, and various aspects of communications, simply confirms what a special report of the Senate found a year ago, after three studies with very good witnesses. Your talk about the need for more venture funds and changes to what can be perceived as current barriers also confirms what witnesses told us then when we spoke of the need for foreign venture funds and angels for the development of small companies.

Mr. Bradlow, you spoke about the cyclical aspect of your business and about an investment of $6.3 billion in 2000. Could you talk about the return on investment?

Mr. Bradlow: That is a difficult question to answer because until now, there have been no data available on industry performance. Our association has instituted a study that has been ongoing for about a year. It is a complex matter of definition.

To be honest, I would also say that there are those among our membership who are not anxious for performance data to be widely circulated, but we are in the process of developing that. I could say, anecdotally, from what I observe in the market, that money invested in the 1998-1999-2000 period is unlikely to have generated any appreciable return.

Senator Poulin: I was wondering if you were trying to develop a way to measure that. Having sat on the boards of different pension funds, I can understand the prudence with which some boards of trustees manage pension funds.

Mr. Bradlow: You touch on an absolutely key point. In our discussions with the major institutions, they constantly refer to the fact that performance data for the industry are lacking. We see that as a serious matter.

It is not that serious for organizations such as the B.C. Investment Management Corporation, Ontario Teachers' Pension Plan or the Caisse de dépôt, because these people have large investment portfolios. They know from the performance of their portfolios what the returns are.

The data are needed for the medium-sized institutions, the $2-billion to $7-billion pension funds that do not invest in the sector at present. They need to know what potential returns are available and the implications, spread and risks associated with it. We need to give them that information.

Senator Poulin: You referred to the tax treaty with the United States. It is interesting because our committee reviewed Bill S-31 last week. That is the legislation for eight tax treaties. Canada currently has 75 tax treaties. You mentioned that you felt that changes have to be made for foreign, offshore revenues invested in Canada.

Could you tell us about the conditions for Canadian revenues invested in the United States? What are the tax conditions?

Mr. Eckert: For example, if one of our institutions invested in a U.S.-managed venture fund, there are none. Money flows freely south, subject to the foreign investment restrictions, and freely north.

Mr. Bradlow: It flows freely in terms of capital gains or withholding taxes levied by the United States.

Mr. Eckert: These are non-taxable investments.

The Chairman: The submission is exceptionally clear on that.

Senator Furey: I am not sure what your position is on the employee exercise of options. Could you explain that?

Mr. Bradlow: The position in our submission?

Senator Furey: Yes. I am not sure where you are going with it. You talk about it being eligible for the $500,000 capital gains exemption.

Mr. Bradlow: There are two problems, as we see it, which we address in our submission. The first relates to the fact that the gain on shares in a Canadian-controlled private corporation is not treated as a capital gain under the tax act. It is treated as an employment benefit. As such, it does not qualify for the $500,000 lifetime exemption on capital gains.

Senator Furey: How do you deal with the problem that once the option is exercised, taxes are still payable before it is sold?

Mr. Bradlow: We do not address that particular point. It has been largely addressed in previous amendments to the act, although not entirely.

Senator Furey: My other question pertains to eliminating tax on capital gains by foreign investors. Why, in your opinion, is Canada reluctant to employ the American model in respect of foreign investors? Is it because they are worried about loss of revenues?

Mr. Eckert: It is largely historical. The practice has evolved over time, but there does not seem to be a clear answer to that question.

Mr. Bradlow: I would hazard a guess. I think it is really a function of regulations being added to the act over an extended period of time to deal with particular problems. The effect of this has been greater than perhaps previously intended. For example, the notion of carrying on business in Canada, which is central to the tax act, carries some concerns with it. At one time, the Department of Finance was concerned that if foreigners created a partnership that they might then use to carry on business in Canada, it might be a way of escaping the tax net. It was extended to cover all partnerships. It is important, however, that only partnerships engaged in active businesses in Canada should be captured, not those that are essentially accumulating a collection of portfolio investments. That distinction, I think, was overlooked.

Mr. Eckert: It is important to understand that we are addressing those large, passive capital pools in the U.S. and elsewhere. In fact, we are releasing the third-quarter statistics for Canada on the level of investment in venture capital. You will see, when it comes out, that the amount of money coming from foreign investors is quite high. However, these are direct, "rifle shot" investments - sophisticated venture funds - primarily in the U.S., that have identified what they believe is a hot opportunity - in Ottawa, for example. They have the resources to structure a deal that will get the money in and out on a basis they can accept.

Senator Furey: Would that not be all the more reason why we should adopt their model?

Mr. Eckert: Absolutely. Far more money would come to Canada from money managers who will not find their own deals in Canada and will not structure around tax risks. These fiduciaries are not terribly creative, and they need to know, with assurance, that they can put money into Canada in a managed pool and a managed format, and have that money, as well as all gains, return on a tax-free basis. That is the real issue. There is a huge amount of capital that Canada is not accessing. If we could address the issue, the amount of money we receive would change dramatically. This would translate into greater employment, greater infrastructure investment and so on.

Senator Kroft: I have questions in two areas. The first relates to the labour-sponsored funds, which I see are part of your association.

Over time, we have received quite a lot of information, more of it academic than practical, from actual operators in the venture capital field about problems with labour-sponsored funds under the heading of whether they distort the market in any fashion. My sense is that when the legislation allowing for labour-sponsored funds was initiated, there was, initially, a huge flow of funds into venture capital in Canada. You could look at the statistics in different ways to determine whether it was entirely due to the large funds that they did gather, as high as 80 per cent of all the new venture capital funds. I see it has dropped down to50 per cent and is perhaps heading for about one-third of the overall pool. That is from some research notes we have. Are we dealing with a similar number?

Where do you see that headed? Does your association have an opinion as to where this balance will shake out? Will it continue to decrease, or has it found a level that might be sustainable? Have you any basis for making such a judgment?

Mr. Eckert: It is difficult to assess. You are correct that labour-sponsored funds are members of our association. They also have their own association, which deals specifically with labour-sponsored fund issues. You are right in that several years ago, they comprised a very large portion of the monies going to venture capital. Over time, that proportion has decreased. In fact, it was about 15 per cent in the year 2000 and it is now at about 12 per cent for the first nine months of 2001.

Mr. Bradlow: Just to clarify this, because I think the senator was referring to a different basis. That is 12 per cent of the $6.3 billion that we referred to earlier, which is disbursements into enterprises. There is the other side of it, which is the flow of funds into labour-sponsored funds, which I think the senator was referring to.

Senator Kroft: I understand the two measures.

I recognize that they are part of your association, but they also have their own association. Does the existence or operation of these funds cause any problem or distortion in the industry that you would want to comment on? They obviously are a mechanism for gathering funds from a different type of investor than your group would normally represent. If you take the view that that is a useful function, is there a price to be paid for that?

Mr. Bradlow: There is a view held by some of our members that at one time, there was a crowding-out effect. When very large percentages of funds being deployed into venture capital funds were coming from labour-sponsored funds, it had a discouraging effect on institutions investing in the same sector because the flow of funds was larger than the market could absorb. In addition, because labour-sponsored funds enjoyed, indirectly, certain tax benefits, they had a lower cost of capital.

There was that view, and some people still hold that view. However, the actual disbursements in 2000 were only running at about 12 per cent. I think, personally, that the problem is not that acute.

Senator Kroft: Would it be fair to observe that, with the reduction in the capital gains rate, or the inclusion rate, resulting in a lower cost of capital gain, there has in fact been a small tax tilt in favour of the conventional funds, as opposed to the labour-sponsored funds? I do not think there has been any change to the front-end benefit on funds flowing into the labour-sponsored funds, but your investors are benefiting from a lower capital gains rate. Am I right? There has been some balancing.

Mr. Bradlow: For those investors who do not pay tax, pension funds for example, that would not have been a consideration. To others, it would have been.

Senator Kroft: I will shift to another ground.

The Chairman: Since we are in the middle of our report, and perhaps are not fully up to date, we want your expertise so that we can finalize our report. Professor MacIntosh has said that labour-sponsored venture capital corporations, LSVCCs, must retain 30 to 40 per cent of their funds in liquid assets such as treasury bills. He said, "From a public policy point of view, is it not a little strange to be giving these generous tax incentives to invest that money in T-Bills?" Professor MacIntosh felt that LSVCCs also have investment deadlines to respect, which means that sometimes funds will be invested in a business that would otherwise not have had money put into it, simply because they have to invest the funds within a certain period of time.

Is this correct, and do you have a comment on it?

Mr. Bradlow: It is clearly correct in its description of the regulations as they apply. As far as the first point is concerned, the holdings of treasury bills, it is unavoidable when we have an investment vehicle that is being sold to retail investors who are in a position to redeem their units whenever they wish and the investments that the vehicle makes are mostly in illiquid private companies.

This is different from a conventional mutual fund that is in a position to sell its investments in a public market. A labour-sponsored fund is not in such a position and therefore has to maintain a sizeable liquidity percentage to cater to the possibility of redemptions. That may not be a satisfactory answer to your question.

The Chairman: It seems strange to give people tax incentives to buy treasury bills.

Senator Oliver: The incentive is up to 40 per cent.

Mr. Bradlow: It can represent a significant drag on the investment performance, certainly. As you say, it does have an anomalous aspect to it.

Mr. Eckert: If you are working with institutional investors, as we are, upon which the industry, for the most part, in North America is based, it is a just-in-time drawdown. We may raise a fund of $100 million, but we do not get the money up front. We have an irrevocable commitment on the part of investors that when we call, within three to five business days, their portion of the drawdown will be provided.

The Chairman: What if they do not make a claim for a while.

Mr. Eckert: They are locked in for that 8- or 10-year period. They have no discretion in how the monies are deployed. They do reserve the right to manage their own funds. They roll over their own T-Bills, if they choose to invest in that.

When you are dealing with retail investors, you have to get all the money up front. We cannot go to 10,000 investors and ask for $5 for an investment that we made. You need that buffer in order to preserve integrity and be in a position to manage liquidity and refunds.

Senator Kroft: There are two parts to this question. There is a public policy issue as to whether this is an appropriate tax benefit to achieve a certain purpose. I will come to that in a moment.

Does the existence of that policy and those vehicles create any serious problems or inequitable competition in the venture capital field? Three years a go, when we started looking at this data, it appeared that it might, because the numbers were so large and it was hard to understand why that was so in terms of the funds. As we now see, that seems to be finding a different level, whether it is that funds gathered will produce one number or funds disbursed will produce another number.

It appears that the "conventional" venture capital industry, which is taxed on the way out, given the extra assistance of a lower capital gains rate, seems to be holding its own. The labour-sponsored funds are not sweeping them away.

I would like to go to the public policy side. I come from Manitoba, not Montreal or Toronto or Vancouver. I am sensitive about that because we have heard much evidence in our hearings about the unequal distribution of venture capital funds around the country. One of the public policy purposes that are served by creating a pool of venture capital through a different means is that it does bring venture capital to areas that would not necessarily get it. The Manitoba industry would fall into that category.

We have heard evidence from Gordon Sharwood, and others who have spent time looking at this, about the unequal distribution of available capital funds across the country. When you look at the data and the disbursement of funds, one of the things that have been achieved by this public policy on labour funds is that it has assisted in their disbursal.

Would you have a comment on that?

Mr. Bradlow: There is a debate in our community about the future of the labour-sponsored movement, irrespective of any changes that government may choose to make or not make. It revolves around the market, essentially. Over the last five years, the average return on funds invested in the labour-sponsored funds has been 3.3 per cent per annum. The value of the tax benefits today, and here I am referring to the 30 per cent tax credit over an eight-year period, equates to 4.8 per cent per annum.

If we assume that the past will be repeated in the future, and that may not be so, an investor today in a labour-sponsored fund can expect to achieve a return of about 8 per cent, predominantly made up by tax benefits.

Over the same past five-year period, the total return on the Toronto Stock Exchange 300 Index has been 6.9 per cent. There is a group that feels that we will continue to see significant sales of labour-sponsored units, because when one factors in the effect of the tax benefits and the potential returns available from alternative investments, it still looks reasonably attractive, notwithstanding the fact that the intrinsic investment performance, at a 3.3 per cent level, has not been high. That is one view.

The other view says that there is an eight-year lock-in period. If you take that into account, these are essentially illiquid investments. The rate of return, at 3.3 per cent per annum, has been below the treasury bill rate over the same period. New funds may not flow in a risk-adverse environment. The relative significance of the labour-sponsored fund movement in the overall Canadian venture capital scene may decline.

Senator Kroft: When you calculate the tax benefit going in, do you also, for comparison purposes, calculate the cost to the treasury of the tax benefit on the capital gains going out of the other funds?

Mr. Bradlow: We did not incorporate that in the numbers.

Senator Kroft: You are giving a tax benefit going in on one end and a tax benefit going out the other end by way of a preferred capital gains rate; would it not be fair to calculate both?

Mr. Bradlow: If we were looking at the impact on taxpayers as a whole, it would be fair.

The Chairman: Labour-sponsored funds pay the same capital gains rate as your funds do?

Mr. Bradlow: No.

The Chairman: Thank you for your time. It has been helpful to us because we want to put this report to bed. I wish you luck.

The committee adjourned.