2. CHAIRMAN
Tim Hearn
Chairman, President and Chief
Executive Officer, Imperial Oil Limited
VICE CHAIRMAN
Tony Comper
President and Chief Executive Officer,
BMO Financial Group
PRESIDENT AND
CHIEF EXECUTIVE
OFFICER
Jack M. Mintz
C.D. Howe Institute
HONORARY MEMBERS
Robert D. Brown, FCA
Marshall A. Cohen, C.C., Q.C. Counsel,
Cassels, Brock & Blackwell, LLP
C. Kent Jespersen
Chairman and Chief Executive Officer,
La Jolla Resources International Ltd.
John D. McNeil
Corporate Director,
Sun Life Financial
Edward P. Neufeld
Roger Phillips, O.C., S.O.M.
Honorary Director,
Ipsco Inc.
Adam H. Zimmerman
C.D. HOWE INSTITUTE
67 Yonge Street, Suite 300
Toronto, Ontario M5E 1J8
telephone : (416) 865 1904
fax : (416) 865 1866
e-mail: cdhowe@cdhowe.org
internet: www.cdhowe.org
DIRECTORS
Ms. M. Elyse Allan
President and CEO, GE Canada
Mr. Stuart A. Belkin
President and CEO,
Belkorp Industries Inc.
Mr. Robert Chisholm
Vice-Chairman, Scotiabank, and
President and CEO, Domestic Banking
and Wealth Management,
Bank of Nova Scotia
Mr. Jack Cockwell
Group Chairman,
Brookfield Asset Mgmnt. Inc.
Mr. Peter W. Currie
Executive Vice President and Chief
Financial Officer, Nortel Networks
Ms. Hélène Desmarais
Chairman and Chief Executive Officer,
Centre d’entreprises et d’innovation de
Montréal
Mr. Craig L. Dobbin O.C.
Executive Chairman,
CHC Helicopter Corporation
Mr. Marc Dutil
President and Chief Operating Officer,
Canam Group Inc.
Mr. N. Murray Edwards
President, Edco Financial Holdings Ltd.
Mr. John T. Ferguson
Chairman of the Board, Princeton
Developments Ltd.
Mr. Charles Fischer
President and Chief Executive Officer,
Nexen Inc.
Dr. Peter J. George
President and Vice Chancellor,
McMaster University
Mr. Bruce Gordon
Senior Executive Vice President and
General Manager, Canada,
Manulife Financial
Mr. Kerry L. Hawkins
President, Cargill Limited
Mr. Paul J. Hill
President and Chief Executive Officer,
Harvard Developments Inc.,
A Hill Company
Mr. Stephen Jarislowsky
Chairman and Chief Executive Officer,
Jarislowsky, Fraser Limited
Mr. Brian K. Johnston C.A.
President, Monarch Construction
Limited
Mr. David W. Kerr
Chairman, Falconbridge Limited
Mr. Daniel Labrecque
President and Chief Executive Officer
N M Rothschild and Sons Canada
Limited
Mr. Stephen J.J. Letwin
Group Vice President, Gas Strategy
and Corporate Development, Enbridge
Mr. Brian Levitt
Co-President and Co-Chair, Osler,
Hoskin and Harcourt LLP
Mr. Donald J. Lowry
President and Chief Executive Officer,
EPCOR
Mr. William A. MacKinnon
Chairman and Chief Executive Officer,
KPMG LLP
Mr. Clive Mather
President and Chief Executive Officer,
Shell Canada Limited
The Board of Directors
OUR PROFILE
The C.D. Howe Institute is a leading independent, economic and social policy research insti-
tution. Headquartered in Toronto, the Institute promotes sound policies in these fields for all
Canadians through its research, publications and activities nation-wide. They include regular
policy roundtables and presentations by policy staff in major regional centres, as well as before
parliamentary committees. The Institute’s individual and corporate members are drawn from
business, universities and the professions across the country.
Ms. Sarah Morgan-Silvester
Executive Vice President, Personal
Financial Services and Wealth
Management, HSBC Bank Canada
Mr. William Morneau
President and CEO,
Morneau Sobeco
Mr. Eric P. Newell
Mr. David P. O’Brien
Chairman of the Board, EnCana
Corporation
Mr. Steven Parker
Chairman and CEO, The CCL Group Inc.
Mr. Michael E. J. Phelps
Chairman, Dornoch Capital Inc.
Mr. Herbert C. Pinder, Jr.
President, Goal Group of Companies
Mr. Aaron Regent
President, Falconbridge Limited
Ms. Charlotte A. Robb
President and CEO, Dynacare Kasper
Medical Laboratories
Mr. Joseph L. Rotman
Chairman, Roy-L Capital Corporation
Mr. Guy Savard
Vice Chairman and Chairman Quebec
Operations, Merrill Lynch Canada Inc.
Mr. Brian Shaw
Chairman and Chief Executive Officer,
CIBC World Markets Inc.
Mr. David Sutherland
President and Chief Executive Officer,
IPSCO Inc.
Ms. Catherine Swift
President and Chief Executive Officer,
Canadian Federation of Independent
Business
Mr. William E. Watchorn
President and Chief Executive Officer,
Ensis Management Inc. and Ensis
Growth Fund Inc.
Mr. Stephen Wetmore
Executive Vice-President, BCE Inc. and
Group President, National Markets,
Bell Canada BCE Inc.
CREDITS: ART DIRECTION AND DESIGN BY DIANE KING; PHOTOGRAPHY BY TOM SANDLER AND TERESA BARBIERI; PRINTING BY RICOH CANADA INC.

3. AYear of Renewal for Canada —
And for the Institute
A MESSAGE FROM THE CHAIRMAN
OUR MISSION:
The C.D. Howe Institute is a national, nonpartisan organization that aims to improve Canadian’s standard of living by fostering sound
economic and social policies. The Institute promotes the application of independent research and analysis to major economic and social
policy issues affecting the quality of life of all Canadians in all regions of the country. It takes a global perspective by considering the
impact of international factors on Canada and bringing insights from other jurisdictions to the discussion of Canadian public policy.
Policy recommendations in the Institute’s publications are founded on quality research conducted by leading experts and subject to rig-
orous peer review.
W W W. C D H O W E . O R G C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 1
THE C.D. HOWE INSTITUTE’S VISION FOR CANADA is a
nation that creates a unique economic and social advantage for all
its citizens. It envisions an economy that is dynamic and innovative
producing the best living standards in the world, supported by
world-class private business and public services. Such a nation
would be a magnet for immigration, investment and
opportunity. It is this vision that tied together the
Institute’s 2005 research agenda.
It was a year of outstanding success and
progress. It is fair to say that the Institute helped
instigate, and contributed to, fresh thinking about
Canada’s policy challenges. We owe our success to all
the Institute’s authors, researchers, staff and in par-
ticular Jack Mintz, outgoing President and CEO.
There is no greater champion of a vibrant, competi-
tive Canada than Jack. Since he became Institute
President and CEO in 1999, he has crisscrossed the
country, logging countless miles tirelessly advocating for excellent
public policy. Under his leadership, the Institute won numerous
research awards and influenced critical policy issues ranging from
fiscal policy and tax reform, in particular, to healthcare and finance
reform. During his tenure, the Institute doubled its annual budget,
policy events and publications, and increased dissemination of
research on the web by a factor of four. Most importantly, Jack
greatly enhanced the Institute’s reputation as a respected independ-
ent pan-Canadian voice shaping opinions in all regions, and com-
manding respect and attention from all governments, the private
sector, the media and academia alike. Jack has made the Institute
stronger than ever before and we congratulate him for a truly excep-
tional job. His sense of humor and keen intellect will be missed.
Of course, as always, more needs to be done. The pace and
scope of tax reform has been insufficient. Delivery of public servic-
es and goods must be refashioned and modernized with greater use
of free market principles. The nation must prepare for the dramatic
demographic shifts taking place.
The Institute will attack these policy issues with
muscle and vigor. Leading the charge will be our
new President and CEO, William Robson, for-
merly Senior Vice President and Director of
Research at the Institute. A rigorous search process
conducted by the Board of Directors made it clear
that Bill is a person of exceptional quality who is
best positioned to build on the past successes of
the Institute. He will be an invigorating force for
policy change in Canada. When it comes to the
Institute, I think it is safe to say the best is yet to
come.
Finally, and importantly, I would like to acknowledge the
Institute’s members. Our work would not have been possible with-
out your strong financial backing. Thank you sincerely for support-
ing a national dialogue aimed at making our country a better place
to live, work and invest.
Tim Hearn
Chairman
It is fair to say that
the Institute helped
instigate, and
contributed to, fresh
thinking about Canada’s
policy challenges

4. 2 C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 W W W. C D H O W E . O R G
Rethinking the Roadmap to
Competitiveness and Prosperity
THE PAST YEAR HAS BEEN A TRANSFORMATIVE ONE
— both for the country and for the C.D. Howe Institute. A spirit
of openness to fresh policy approaches took root in the public
square during 2005. At the Institute, we played a part, with new,
non-partisan thinking on a roster of policy issues, from tax reform
to fixing fiscal gaps, that have risen high on the public agenda. The
election of a new minority Conservative Government in Ottawa this
January opened the door even more to creative thinking about new
policy approaches — on foreign policy, fiscal reform, tax policy,
banking and federal-provincial fiscal relations.
For a public policy think-tank like the
C.D. Howe Institute, this is a grand opportunity
to continue getting some great ideas on the polit-
ical table with the aim of making Canada a gold
medallist in economic performance, far surpassing
our performance in Turin this past year.
In my mind, two key issues are critical to
Canada’s future. The first is competitiveness,
which encompasses notions like productivity and
economically efficient public policies. The second
is demographics with a vastly larger retiring pop-
ulation needing the support of those who work. Get good policies
in place and Canada’s future will be sound. The C.D. Howe
Institute’s mandate is to bring out fresh new ideas to improve
Canada’s economic performance so Canadians can debate them. If
public policy improves as a result, the Institute achieves its primary
objective.
Last year, as you can read in the following pages, we added to a
long list of research publications with lots of good ideas to improve
public policies in Canada. In the past seven years that I have enjoyed
as President and CEO, the Institute has been at the forefront of
many public policy debates, including: the “big idea” for enhanc-
ing Canada-US relations; healthcare initiatives that would provide
alternative operational and funding arrangements; tax policy
reforms aimed at competitiveness and demographic issues; educa-
tional reforms, including a new measure for testing quality in
schools; and new approaches to funding provincial and municipal
priorities and federal equalization programs. This is only a short list
of research activities and publication topics that are available on our
website.
We cannot, however, rest on past ideas. The new political land-
scape makes it necessary for the Institute to shift its analysis into
high gear to provide new, innovative ideas for a very busy political
agenda in the near future. The Supreme Court decision on timely
public health services, as well as the challenges facing Canada in the
fields of energy policy, equalization, foreign investment, and demo-
graphics attest to the growing need for competent, relevant and
independent policy analysis that can assist federal and provincial
governments to develop more effective policies.
Without the support of our members, we
could not have been actively engaged on so
many relevant topics recently. We are proud
that we have been able to double our budget in
the past seven years, but even more proud that
we have more than doubled our research and
event activities with this increased support. All
of us take great pride when the media refers, as
it often does, to the C.D. Howe Institute as an
independent, non-partisan, relevant — and
Canada’s most influential — think-tank.
This designation comes by no accident. It is
a result of the hard work of the employees at the
C.D. Howe Institute. They are dedicated to the Institute’s work and
enjoy the excitement of delivering the best research and event activ-
ities that significantly impact on Canada.
As I retire as President and CEO this July, I want to personally
thank all of you for the wonderful support you have given the
Institute. Even though I return to scholarship, I plan to support the
Institute in a variety of ways. I hope you continue to give the C.D.
Howe Institute and the new President and CEO, Bill Robson, your
utmost backing. While other charities make excellent cases for fund-
ing, the Institute is one place that can help make a difference to
Canada’s economic performance, which is critical to making sure we
can afford the best quality of life. Your support is crucial to achieve it.
Jack Mintz
President and Chief Executive Officer
With a new political
landscape, the
Institute has moved
into high gear to
provide new,
innovative ideas
A MESSAGE FROM THE PRESIDENT AND CEO

5. THOSE WHO LIVE IN “INTERESTINGTIMES” MAY OFTEN REGRETTHE EXPERIENCE, but in the field of Canadian public
policy, 2005 turned out to be not only interesting, but in many respects rewarding.
The spectacle of a federal government spreading itself too thin, and spending too much, sparked deeper appreciation of the need to set
priorities and clarify the tasks of different levels of government. Strong resource prices and pressure on manufacturing refocused attention
on the need to enhance Canada’s competitiveness. The Supreme Court’s Chaoulli decision opened the lid on a discussion of the limits of the
state’s monopoly on healthcare provision — a discussion that the Romanow report had once seemed to stifle.
Reinvigorated debate on these and other challenges to Canadian well-being provided many opportunities for the C.D. Howe Institute
to contribute its unique blend of non-partisan, analytically sharp and policy-relevant
research. The pages that follow document our many publications, events
and presentations on subjects ranging from tax reform and fiscal federal-
ism, through investment and productivity, to regulation and international
trade.
An Intersection of Ideas: Along with academic research and conversa-
tions with policymakers, the Institute’s research team also benefits greatly
from contact with supporters and Canadians in all regions. Our roundtables
and seminars draw people of knowledge and experience. Our publications
frequently prompt responses from readers; responses that are an important
source of information about policy problems and how we might resolve
them.
A solid grounding in the actual experience of Canadian individuals and
businesses, and the practical steps required to turn imaginative ideas into con-
crete programs, is indispensable to the development of relevant policy advice.
New and growing Institute activities, such as the Financial Services Research
Initiative, launched in 2005, and the ongoing Tax Competitiveness Program,
depend vitally on this input.
For the C.D. Howe Institute’s Director of Research, then, looking back on
2005 is an occasion to reflect on three important facts. First, we live in a country
where standards for public policy and its understanding are high. Second, the
Institute has a research team and network of esteemed contributors whose combined
skill and devotion to improving public policy is second to none. I salute Jack Mintz,
Finn Poschmann, Danielle Goldfarb and Yvan Guillemette for their work, and thank
our colleagues who play such a vital role in nurturing the research and getting it out
into the wider world. And finally, I gratefully acknowledge our debt to the Institute’s
members and supporters, whose contribution to better public policy in Canada is
essential to everything we do.
Rising to the Challenge of
“InterestingTimes”
THE 2005 RESEARCH PROGRAM
William B.P. Robson
Senior Vice President and Director of Research
W W W. C D H O W E . O R G C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 3

6. Monetary Policy Council
The C.D. Howe Institute’s Monetary Policy Council (MPC),
chaired by William Robson, the Institute’s Senior Vice President
and Director of Research, comprises 12 of Canada’s most distin-
guished financial-market and monetary economists. It provides
the Bank of Canada, financial markets and commentators with a
regular independent assessment of the appropriate target for the
short-term, overnight interest rate that will allow the Bank to hit
its 2-percent inflation target. The members of the Monetary
Policy Council are:
• Don Drummond, TD Bank Financial Group
• Richard Egelton, BMO Financial Group
• Richard Harris, Simon Fraser University
• Warren Jestin, Bank of Nova Scotia
• David Laidler, University of Western Ontario
• Tim O’Neill, O’Neill Strategic Economics
• Michael Parkin, University of Western Ontario
• Daniel Racette, HEC Montréal
• Christopher Ragan, McGill University
• Angela Redish, University of British Columbia
• Nicholas Rowe, Carleton University
• Craig Wright, RBC Financial Group
The Bank of Canada’s interest-rate announcements coincided
with the MPC’s recommendations on all eight occasions in 2005.
Tax Competitiveness Program
Following its launch in September 2004, the Tax Competitiveness
Program convened its first meeting of the Tax Competitiveness
Council in 2005 and published its first annual report, Unleashing
the Canadian Tiger, on September 20, the anniversary of the
Income Tax War Act of 1917. The Program also produced numer-
ous e-briefs on current topics, and these have played a significant
role in stimulating and guiding recent debates over provincial and
federal tax reform.
4 C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 W W W. C D H O W E . O R G
Fiscal and Monetary Policy
CANADA FACED SOME INTRIGUING FISCAL and mone-
tary challenges in 2005, which were reflected in analysis and events
at the Institute.
On fiscal matters, the looming election worsened an already
alarming trend to spending increases. Ottawa’s lack of clear policy
goals or a fiscal target prompted the Institute to identify a major
theme in this area: making competitiveness a focus for fiscal policy.
The Institute’s Tax Competitiveness Program released its first annual
report, The 2005 Tax Competitiveness Report: Unleashing the
Canadian Tiger. The message — that Canada’s distressingly high
effective tax rates on new investment threatened economic growth,
and that the country needed smarter and lower taxes — reverberated
at home and abroad. The Commentary, which compared effective
tax rates in 36 nations, was featured in the September 22, 2005 issue
of The Economist magazine.
Canada’s monetary challenges in 2005 arose from a worldwide
run up in energy prices. The link between commodity prices and the
Canadian dollar had been well-established in prior C.D. Howe
Institute work, and the renewed upward pressure on the loonie
prompted concern about the future of Canadian manufacturing. Yet
an e-brief analysis by David Laidler and Bill Robson provided com-
pelling reasons for sticking to an inflation target as a guide for mon-
etary policy.
As they explained in Two Percent Target — Canadian Monetary
Policy Since 1991, which in May won the illustrious Donner Prize for
best book in public policy, the Bank of Canada’s pursuit of low and
stable inflation has served Canadians — including manufacturers
and exporters — well. The investment environment would suffer
from the higher and more variable inflation that would follow
attempts to steer the exchange rate with monetary policy.
The challenge for
any country today
is to provide an
economic environ-
ment that promotes
economic growth and
job creation in a
dramatically
changing world
Congratulations to David
Laidler, Fellow-in-Residence,
and William Robson, incoming
President and CEO, whose
book, Two Percent Target, was
presented in May 2005 with
the Donner Prize for best book
in public policy.
THE INSTITUTE’S 2005 RESEARCH AGENDA

7. Publications
MONETARY POLICY
Robson, William B.P. “Reading the
Currency Compass: Keeping Monetary
Policy on Course Through a Choppy
Exchange Rate.” e-brief (June).
FISCAL POLICY
Robson, William B.P. “What’s $12.5
Billion? MPs Must Regain Control of
Federal Spending.” e-brief (February).
McLure, Jr., Charles E. “Tax Reform
and Investment: Will the US Sneeze?
Will Canada Catch Cold?” Benefactors
Lecture 2005 (November).
Mintz, Jack. M. with Duanjie Chen,
Yvan Guillemette and Finn Poschmann.
“The 2005 Tax Competitiveness Report:
Unleashing the Canadian Tiger.”
Commentary No. 216 (September).
Chen, Duanjie, Jack M. Mintz and
Finn Poschmann. “Attention G-7
Leaders: Investment Taxes Can Harm
Your Nations Health.” e-brief
(September).
Chen, Duanjie and Jack M. Mintz.
“Revised Corporate Tax Cuts in
Federal Budget Will Reduce
Investment Gains by Half: C.D. Howe
Institute Report.”
e-brief (April).
Chen, Duanjie and Jack M. Mintz.
“Federal Corporate Tax Cuts: Would
Lift Canada’s Standard of Living.”
e-brief (April).
Gendron, Pierre-Pascal. “Un prob-
lème imposant : améliorer l’attrait du
Québec pour l’investissement.”
Bulletin de Recherche No. 89 (March)
Gendron, Pierre-Pascal. “A Taxing
Issue: Enhancing Quebec’s Investment
Attraction.” Backgrounder No. 89
(March).
Robson, William B.P. and Finn
Poschmann. “Restoring Purpose: A
Shadow Federal Budget for 2005.”
Commentary No. 208 (February).
Chen, Duanjie and Jack M. Mintz.
“How To Become Seductive: Make
Canada More Investment-Friendly.”
e-brief (January).
Events
ROUNDTABLE TORONTO:
Post-Budget Briefing, Thursday, Mar.
3, 2005; Mark Carney, Senior Associate
Deputy Minister, Finance Canada.
ROUNDTABLE TORONTO:
Taxing Smarter for Prosperity,
Tuesday, Mar. 29, 2005; Roger L.
Martin, Dean, Joseph Rotman School
of Management, University of Toronto.
ROUNDTABLE VANCOUVER:
The Loonie: Set to Soar ... or Sink?,
Monday, Jun. 6, 2005; Richard Harris,
Telus Professor of Economics, Simon
Fraser University and Warren J. Jestin,
Senior Vice-President & Chief
Economist, Bank of Nova Scotia.
POLICY SEMINAR:
Provincial Fiscal Equalization and
Territorial Formula Financing: Expert
Review Panel, Friday, Jun. 10, 2005.
POLICY CONFERENCE:
Federal-Provincial Fiscal Reform,
Thursday, Jun. 23, 2005.
TAX COMPETITIVENESS COUNCIL:
Tax Competitiveness Council Meeting,
Thursday, Sept. 8, 2005.
ROUNDTABLE REGINA:
Growing Saskatchewan: Can Business
Tax Reform Lead the Way?, Friday, Oct.
21, 2005; Jack Mintz, President and
Chief Executive Officer, C.D. Howe
Institute.
BENEFACTORS LECTURE:
The U.S. Debate on Tax Reform and Its
Implications for Canada: Will the U.S.
Sneeze? Will Canada Catch Cold?,
Thursday, Nov. 3, 2005; Charles E.
McLure, Jr., Senior Fellow at the
Hoover Institution, Stanford University.
SPECIAL DINNER:
Calgary Dinner with Jack Mintz,
Tuesday, Nov. 15, 2005.
POLICY SEMINAR:
The Canadian Dollar and the Economy,
Friday, Nov. 25, 2005.
W W W. C D H O W E . O R G C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 5
A Moving Occasion
Thanks to the generosity of members’ contributions to the
2004/05 Capital Campaign, the Institute moved to its new
headquarters at 67 Yonge Street in Toronto in early 2005. The
official opening was held in March, with then-prime-minister
Paul Martin in attendance (at top right with Jack Mintz). A
special Donor Recognition Dinner was held in January 2006 to
thank the many members who contributed to the capital cam-
paign that made the move possible.
An excellent library:
(At left) Librarian Jan Moffatt consults with Wendy Longsworth in
The Eleanor and Jack Mintz Library; (at right) Monique Cormier and
Nairy Emirzian.

8. WITH RELATIONS STRAINED BETWEEN CANADA and its
southern neighbour, and border issues of singular importance, the
Institute provided welcome debate and fresh analysis in this policy
field. Roundtable speakers included recently retired US Ambassador
to Canada Paul Cellucci, Canadian Consul General to New York
Pamela Wallin, Head of Canada’s Washington advocacy efforts Colin
Robertson, and former Canadian Ambassador to the US Derek
Burney. C.D. Howe Institute policy analyst Danielle Goldfarb also
briefed David Wilkins, then newly appointed as US Ambassador to
Canada, on the possible effects of US border security actions on the
North American economic space.
The Institute also addressed challenges and opportunities posed
by China’s economic rise, the proliferation of bilateral free-trade
deals, and the glacial pace of WTO talks. Speakers debated the issues
raised by Chinese investment in Canada’s natural resources sector,
while Institute presentations highlighted Canada’s limited role in
global supply chains.
Canadian trade policy was another major focus. Research pre-
sented in Institute publications and in testimony before parliamen-
tary committees on foreign affairs and trade argued that Ottawa was
failing to set trade and foreign aid priorities and pursuing marginal
trade deals, and that Canada’s position at the WTO talks condemned
it to playing defense rather than pursuing liberalization initiatives.
Institute publications and seminars also profiled costly but diminish-
ing Canada-US agricultural disputes, Canada-Mexico relations, the
UN Oil-for-Food scandal, and the situation in Iraq.
6 C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 W W W. C D H O W E . O R G
International andTrade Policy
THE INSTITUTE’S 2005 RESEARCH AGENDA
The British-North American Committee
The British-North American Committee (BNAC) is a long-standing element in the C.D.
Howe Institute’s international program. Co-sponsored by the Institute, with the Atlantic
Council of the United States, and the UK British-North American Research Association,
the BNAC convenes leaders from business, labour and the professions in all three coun-
tries to discuss common concerns and investigate possible solutions. Full BNAC meetings
take place each spring in the UK and each fall in North America. The BNAC maintains
an active research and publishing program. Its current research efforts centre on electricity
availability and conservation, and threats to the security of the Internet. Dr. Thomas
Symons of Trent University chairs the BNAC Executive Committee, and William Robson
serves as the BNAC ’s Canadian Liaison Officer.
ROUNDTABLE TORONTO:
Canada — U.S. Relations: The View from
New York, Monday, Apr. 25, 2005; Pamela
Wallin, Canadian Consul General, New York.
ROUNDTABLE TORONTO:
Global Prospects, Global Imbalances and
Canada —-a view from the IMF, Monday,
May 2, 2005; Kevin G. Lynch, Deputy Minister,
Department of Finance, Canada.
ROUNDTABLE TORONTO:
Iraq: A Transition in Trouble? Monday, May 9,
2005; Sir Jeremy Greenstock, UK Special
Envoy to Iraq and UK Ambassador to the
United Nations, Director, The Ditchley
Foundation.
BNAC:
BNAC General Meeting — UK,
May 12-15, 2005.
BNAC:
BNAC General Meeting — USA,
Oct. 20-25, 2005.
ROUNDTABLE TORONTO:
Canada-US Relations: Still Under
Construction, Tuesday, Sept. 20, 2005; Derek
H. Burney.
ROUNDTABLE TORONTO:
Does Chinese Accession to the WTO prevent
Canada from Protecting Its Strategic
Resources? Thursday, Dec. 8, 2005; Stanley H.
Hartt, Chairman, Citigroup Global Markets
Canada Inc. and Alan S. Alexandroff, Director,
LECG, LLC.
Publications
INTERNATIONAL POLICY
Goldfarb, Danielle “Canada at the WTO Negotiations:
All Defence, No Offence.” e-brief (December).
Barichello, Richard, Timothy Josling and Daniel A.
Sumner “Agricultural Trade Disputes Between Canada
and the United States: Costly but Diminishing.”
Commentary No. 224 (December).
Goldfarb, Danielle “US Bilateral Free Trade Accords:
Why Canada Should Be Cautious About Going the Same
Route.” Commentary 214 (September).
Goldfarb, Danielle. “The Canada-Mexico Conundrum:
Finding Common Ground.” Backgrounder No. 91 (July).
Sikorski, Radek “Cleaning Up the UN in an Age of
U.S. Hegemony.” Commentary No. 212 (June).
Hart, Michael “Great Wine, Better Cheese: How
Canada Can Escape the Trap of Agricultural Supply
Management.” Backgrounder No. 90 (March).
Events
ROUNDTABLE SASKATOON:
U.S. — Canada Relations: My Reflections, Friday, Feb.
25, 2005; Paul Cellucci, U.S. Ambassador, Embassy of the
United States of America.
ROUNDTABLE CALGARY:
Prospects for Canada -US Relations, Tuesday, Mar. 15,
2005; Jonathan T. Fried, Privy Council Office, Senior
Foreign Policy Advisor to the Prime Minister and Head
of the Canada-United States Secretariat Foreign and
Defence Policy.
ROUNDTABLE TORONTO:
’So why does it matter to me?’: Pushing Canada on
Capitol Hill and Beyond, Monday, Apr. 4, 2005; Colin
Robertson, Canadian Embassy Minister (Advocacy) and
Head, Washington Advocacy Secretariat.
POLICY SEMINAR:
Canada and Mexico: What Common Ground? Friday,
Apr. 15, 2005.

9. Economic Growth and Innovation
THE INSTITUTE’S ECONOMIC GROWTH and innovation
program addressed both economy-wide and sector-specific chal-
lenges in 2005. While publications highlighted barriers to R&D and
lagging capital investment per worker, an appearance by the former
Irish president provided members with a first-hand perspective on
the factors behind his country’s economic success to Institute mem-
bers. With energy prices rising to unprecedented levels, roundtables
examined the regulatory environment for developing the oil sands
and offshore energy resources. Institute publications also explored
electricity metering and pricing.
As Canada’s population ages, raising concerns about future pen-
sion liabilities, the Institute has maintained an active program on
pension issues. Institute Senior Vice President Bill Robson advised an
international audience on Canada’s experience with social security
pensions, and helped Ottawa evaluate its Old Age Security pension.
Roundtables and publications discussed better work incentives in the
public pension system, problems with federal pension guarantees, the
survival of defined-benefit plans, and the investment environment
for pension plans.
With the beef industry affected by the repercussions of mad cow
disease, the Institute also held a one-day conference to address this
and other agricultural issues, and published a piece explaining the
benefits of eliminating supply management in dairy and poultry. As
discussions on income trusts permeated public debate, Institute pub-
lications and roundtables addressed that issue. Jack Mintz, the
Institute’s president and CEO, appeared before the Senate
Committee on Banking, Trade and Commerce to provide his advice
on the issue, which included raising the dividend tax credit and low-
ering corporate income tax rates. The Institute also published on the
issue of cell phone regulation, urging fresh approaches and increased
competition between rival technologies.
Publications
ECONOMIC GROWTH AND INNOVATION
Boyer, Marcel. “Augmentons le prix de
l’éctricité au Québec — pour le bien de
tous.” e-brief (March).
Boyer, Marcel. “Raise Electricity Prices in
Quebec — and Benefit Everyone.” e-brief
(March).
Faruqui, Ahmad and Stephen S. George.
“Preventing Electrical Shocks What Ontario
— And Other Provinces — Should Learn
About Smart Metering.” Commentary No. 210
(April).
Harris, Richard. “Canada’s R&D Deficit —
And How To Fix It.” Commentary No. 211
(May).
Milligan, Kevin. “Making It Pay to Work:
Improving the Work Incentives in Canada’s
Public Pension System.” Commentary No. 218
(October).
Robson, William B.P. “Off the Hook, For
Now: Taxpayers Should Hope that Talk of
Federal Pension Guarantees Ends With the
Minority Government.” e-brief (November).
Quigley, Neil and Margaret Sanderson.
“Going Mobile — Slowly: How Wireline
Telephone Regulation Slows Cellular
Network Development.” Commentary No. 222
(December).
Mintz, Jack. M. “Unfinished Business:
Achieving Neutral Taxation of Corporations
and Income Trusts.” (December).
Huberman, Michael. “Are Canada’s Labour Standards
Set in the Third World? Historical Trends and Future
Prospects.” Commentary No. 209 (February).
Events
POLICY CONFERENCE:
Growing Markets for Canadian Agriculture, Friday, Mar.
4, 2005.
ROUNDTABLE MONTREAL:
Global Imbalances: Challenges for Policy Makers and
Risks for Asset Managers, Tuesday, Mar. 8, 2005; Henri-
Paul Rosseau, President and CEO Caisse de depot et
placement du Quebec.
ROUNDTABLE HALIFAX:
Offshore Energy Development: The Regulatory and
Policy Environment, Wednesday, Apr. 20, 2005; Gerard
Protti, Executive Vice President Corporate Relations,
EnCana Corporation.
BOARD OF DIRECTORS DINNER:
The Irish Success Story, Wednesday, Jun. 1, 2005;
Garret FitzGerald, Chancellor, National University of
Ireland.
ROUNDTABLE EDMONTON:
Oil Sands Infrastructure: Building Success, Wednesday,
Jun. 8, 2005; Gregory Melchin, M.L.A., Minister of
Energy, Government of Alberta.
ROUNDTABLE TORONTO:
The Investment Environment for Pension Plans,
Tuesday, Jun. 14, 2005; Paul G. Haggis, President and
Chief Executive Officer, Ontario Municipal Employees
Retirement System (OMERS).
ROUNDTABLE OTTAWA:
R&D Roadblocks and How to Get Around Them,
Monday, Jun. 20, 2005; Richard Harris, Telus Professor
of Economics, Simon Fraser University and Bernard
Courtois, President and CEO, Information Technology
Association of Canada (ITAC).
W W W. C D H O W E . O R G C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 7
Financial Services Research Initiative
The dynamism and competitiveness of the financial services sector matters greatly to
Canadian households and businesses. There is also a growing sense among financial
service providers and policymakers that a fresh push is needed to understand the sector
and promote more efficient regulation of its activities. To provide an independent per-
spective on the critical issues facing the sector, the Institute launched its Financial
Services Research Initiative in 2005. Its inaugural meeting in December focused on the
effects of globalization on financial services and the role of regulation in the financial
sector.
The Financial Services Research Initiative is a two-pronged project. One thrust is
a series of policy seminars engaging senior financial service sector leaders, regulators and
academics. The second thrust is to address sectoral challenges through policy research
publications that respond to key current and future issues.

10. ECONOMIC GROWTH AND INNOVATION
(cont’d)
ROUNDTABLE MONTREAL:
Building an Innovation-based Economy in Canada,
Wednesday, Sept. 14, 2005; Jean-Michel Halfon,
President, Pfizer Canada Inc.
SPECIAL DINNER:
Calgary Dinner, Thursday, Oct. 20, 2005; Tim Hearn,
Chairman, President and Chief Executive Officer,
Imperial Oil Limited.
ROUNDTABLE TORONTO:
Defined-Benefit Pension Plans: Can They Survive?
Should We Care?, Tuesday, Nov. 8, 2005; Steve
Bonnar, Principal, Towers Perrin.
ROUNDTABLE EDMONTON:
Building a Winning Organization through Relentless
Innovation and Improvement, Friday, Nov. 18, 2005;
Nizar Somji, Matrikon Consulting Inc.
ROUNDTABLE TORONTO:
Income Trusts: Benefits and Risks, Wednesday, Dec.
7, 2005; Ira Gluskin, President and Chief Investment
Officer, Gluskin Sheff + Associates Inc. and Jeffrey F.
Olin, Managing Partner, Ontario Head of Investment
Banking, Desjardins Securities.
SEMINAR:
Financial Services Research Initiative, Friday, Dec.
9, 2005.
Publications
GOVERNANCE AND PUBLIC INSTITUTIONS
Poschmann, Finn and Stephen Tapp. “Squeezing
Gaps Shut: Responsible Reforms to Federal-
Provincial Fiscal Relations.” Commentary No. 225
(December).
McKenzie, Kenneth J. “Reflections on the
Political Economy of Fiscal Federalism in Canada.”
Working Paper (September).
Smart, Michael. “Federal Transfers: Principles,
Practice, and Prospects.” Working Paper
(September).
Poschmann, Finn. “The Fiscal Background to a
Fiscal Gap.” Working Paper (September).
Dahlby, Bev. “Dealing with the Fiscal Imbalances:
Vertical, Horizontal, and Structural.” Working Paper
(September).
McKenzie, Kenneth J. “Reflections on the
Political Economy of Fiscal Federalism in Canada.”
Working Paper (September).
Kelleher, Maria, Janet Robins and John Dixie.
“Taking Out the Trash: How To Allocate the Costs
Fairly.” Commentary No. 213 (July).
Payne, A. Abigail. “Firm Foundations Putting
Private and Public Foundations on Level Ground.”
Backgrounder No. 88 (February).
Laidler, David E.W. and William B.P. Robson.
“Prospects for Canada: Progress and Challenges 20
Years after the MacDonald Commission.” Book
(January).
Events
POLICY SEMINAR:
Provincial Fiscal Equalization and Territorial
Formula Financing: Expert Review Panel, Friday,
Jun. 10, 2005.
POLICY CONFERENCE:
Federal-Provincial Fiscal Reform, Thursday, Jun. 23,
2005.
ROUNDTABLE TORONTO:
NAV CANADA: A Privatization Success Story, Friday,
Sept. 23, 2005; John W., President & CEO, Crichton
NAV CANADA.
ROUNDTABLE TORONTO:
The Business Case for City Building, Wednesday,
Oct. 12, 2005; David Miller City of Toronto Office of
the Mayor.
ROUNDTABLE TORONTO:
Economic Reform in Australia and the Question of
P3s, Wednesday, Nov. 16, 2005; Sharman Stone
Parliamentary Secretary to the Minister for Finance
and Administration, Australia.
8 C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 W W W. C D H O W E . O R G
Governance and Public Institutions
FOR MANY,THEYEAR 2005 will be etched in Canadian politi-
cal history as the year of the Gomery inquiry, which brought the
sponsorship scandal to full light and reminded Canadians of the
importance of good governance and of confidence in public institu-
tions. The Institute’s work in this area for 2005 took the form of
three publications and six roundtables. A volume edited by David
Laidler and Bill Robson reviewed the progress accomplished in the
20 years since the landmark Royal Commission chaired by the Hon.
Donald Macdonald, and drew lessons from subsequent experience to
outline a program for future action. The two other publications
focused on more immediate and specific issues. Maria Kelleher and
co-authors argued for a better sharing of the costs of garbage dispos-
al through variable user fees that would at the same time provide
incentives to reduce trash. Abigail Payne raised the question of why
private foundations are treated differently from public ones by the
tax system and argued for putting the two on level ground.
The Institute’s 2005 events in this policy arena featured very
notable speakers, including Quebec Premier Jean Charest on creating
a new federalism, Toronto Mayor David Miller on the business case
for city building, then federal minister John Godfrey on a new deal
for cities and Canadian Security Intelligence Service Director James
Judd on the Canadian response to terrorism.
Federal-provincial fiscal relations also remained fraught in 2005.
Unexpected federal surpluses, ad hoc spending increases, and a deal
that divorced the Equalization program from its intended role in
reducing interprovincial fiscal disparities, created a strong sense that
fresh reforms were needed. It was in this context that the Institute
hosted consultations with the federal Experts Panel on Equalization
and Territorial Formula Financing, mounted a major conference on
“Federal-Provincial Fiscal Reform,” and issued a series of related
working papers and a Commentary, Squeezing Gaps Shut: Responsible
Reforms to Federal-Provincial Fiscal Relations. The central theme: rem-
edy the imbalance of revenue collection and spending responsibilities
through lower federal taxes — for example, by lowering the Goods
and Services Tax rate — to create room for provincial revenue-rais-
ing measures. The potential for fiscal realignments that would
improve government accountability proved to be a dominant theme
heading into 2006.
THE INSTITUTE’S 2005 RESEARCH AGENDA

11. Social Policy
SOCIAL POLICY RESEARCH BYTHE INSTITUTE focused primarily on education
reform and innovation in 2005. Papers in the Education Papers Series addressed some of
the key challenges facing the education system, from enhancing the quality of elementary
and secondary education, and lowering high-school dropout rates, to changing the ways
universities are funded and professors are paid.
With regard to primary education, Institute research challenged the conventional
wisdom that smaller class sizes are better. The Institute also published a groundbreaking
study of elementary school test scores in Ontario by David Johnson. His analysis allowed
policymakers to compare all Ontario schools on an equal footing by removing the influ-
ence of socioeconomic context on school performance. The school performance indica-
tors thus produced became one of the most downloaded items on the Institute’s website
in 2005. As for high-school education, another study showed that educators can help
lower drop-out rates by raising the school-leaving age above 16 years of age.
In the postsecondary arena, the Institute’s work focused on the challenge for govern-
ments to enact policies that give the right incentives for students, teachers and institutions
to provide a high-quality education that is responsive to student demands. A
Commentary by Kirk Collins and James Davies showed that changes in taxes and subsi-
dies have improved the incentive for young people to attend university. Fellow-in-
Residence David Laidler responded to the Rae Review of postsecondary education in
Ontario with arguments for fundamental reform, including making greater use of vari-
able tuition, student-based financing and competition in the delivery of higher education.
A Toronto Roundtable with David Lindsay also provided a forum for members to react
to Bob Rae’s report. John Chant’s contribution showed
that professor’s pay should be based on performance,
not longevity. His study demonstrated that the salary
structure of university professors can influence research
and teaching performance and that greater use ought
to be made of merit-based pay.
More education papers focusing on the financing of
postsecondary education are slated for 2006.
W W W. C D H O W E . O R G C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 9
Publications
SOCIAL POLICY
Oreopoulous, Philip. “Stay in School: New Lessons
on the Benefits of Raising the Legal School-Leaving
Age.” Commentary No. 223 (December).
Chant, John. “How We Pay Professors and Why It
Matters.” Commentary No. 221 (November).
Coulombe, Serge and Jean-François Tremblay.
“Public Investment in Skills: Are Canadian
Governments.” Commentary No. 217 (October).
Collins, Kirk A. and James B. Davies. “Carrots &
Sticks: The Effect of Recent Spending and Tax
Changes on the Incentive to Attend University.”
Commentary No. 220 (October).
Laidler, David E.W. “Redirecting Rae: Some
Proposals for Postsecondary Education in Ontario.”
Backgrounder No. 92 (October)
Guillemette, Yvan. “School Class Size: Smaller Isn’t
Better.” Commentary No. 215 (August).
Johnson, David. “Signposts of Success:
Interpreting Ontario’s Elementary School Test
Scores.” (March).
Guillemette, Yvan. “School Enrolment Is Down;
Spending Is Up. What’s Wrong With This Picture?”
e-brief (January).
Events
ROUNDTABLE SASKATOON:
Saskatchewan’s Labour Law Pops A Gasket, Monday,
Apr. 11, 2005; John Richards, Simon Fraser University,
Master of Public Policy Program.
ROUNDTABLE TORONTO:
Postsecondary Education: The Rae Review and
Beyond, Wednesday, May 11, 2005; David Lindsay,
President, Association of Colleges of Applied Arts &
Technology of Ontario. and Ian D. Clark, President and
Chief Executive Officer, Council of Ontario Universities.
ROUNDTABLE MONTREAL:
What is the future of our Canadian universities?
Thursday, Jun. 16, 2005; Michel Pigeon, President,
Laval University.
ROUNDTABLE MONTREAL:
The Medicare Monopoly: Caught between the
Taxpayers and the Judges, Tuesday, Nov. 22, 2005;
Claude E. Forget, Senior Vice-President and Director
of Research, CEF, Ganesh Corporation and William
Robson, C.D. Howe Institute.
Donner Prize finalist: David Johnson’s ground-
breaking study of elementary school test scores,
Signposts of Success, allowed policymakers to com-
pare all Ontario schools on equal footing. The
book has been named as a finalist for the
2005/2006 Donner Prize for the best book on
Canadian public policy.
Cross-country encounters:
Quebec’s Hélène Desmarais, Institute Director, at the podium; Alberta’s Premier Ralph Klein
(left) discusses the state of the nation with Ontario’s Robert Prichard, President and CEO,
Torstar Corporation and President Emeritus, University of Toronto.

12. 1 0 C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 W W W. C D H O W E . O R G
HIGHLIGHTS FOR 2005
Making OurVoice Heard
Exposure and Ad Value of the
2005 C.D. Howe Institute Media Coverage
Raising awareness of policy ideas is a key goal of the C.D. Howe Institute. Our media
and dissemination campaign continued to generate outstanding results in 2005. The
Institute uses two useful measures to help track the effectiveness of its media cam-
paigns: Exposure and Equivalent Ad Value of citations to Institute research in the
media.
Ad value is a dollar figure which attempts to quantify the cost of purchasing an
advertisement with similar parameters and reach as a particular article in the media.
Exposure is a measure of the potential number of people who may have viewed an arti-
cle. This is usually the circulation of a particular paper. The Institute uses an independ-
ent third-party service supplier to track and analyze media coverage.
Source: FPinformart.ca
Visitors to www.cdhowe.org and
Publication Downloads in 2005
Another useful measure of the C.D. Howe Institute’s reach is the degree to which the
Institute website is a meeting place for opinion leaders, researchers, policy makers and
others interested in policy research. The Institute tracks its web presence and the num-
ber of policy papers downloaded from its site.
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
1998 1999 2000 2001 2002 2003 2004 2005
C.D. Howe Institute Revenue
$
EEXXPPOOSSUURREE AADD VVAALLUUEE
66,715,733 $23,292,244
WWEEBB VVIISSIITTOORRSS PPUUBBLLIICCAATTIIOONN DDOOWWNNLLOOAADDSS
195,213 404,220
0
20
40
60
80
100
120
2001 2002 2003 2004 2005
C.D. Howe Institute Output
(publications & events)
Staff behind the scenes:
(Top, left to right) Duncan Munn, Rowena
Jeffers and Donna Leitch; (Middle) Julie
Kelsey (left) and Nairy Emirzian; (Bottom)
Kristine Gray and Warren Mahomed.

13. THE INSTITUTE’S PEOPLE
Policy Staff: Seen and Heard
INSTITUTE POLICY STAFF APPEAR REGULARLY BEFORE PARLIAMENTARY COMMITTEES and address decision makers
in various other forums — all with the purpose of fostering debate about smarter public policy. Whether it concern a level playing field for
income trusts and corporate shares, lowering corporate taxes, rebalancing fiscal federalism, boosting economic innovation, or assessing
Canada’s policy approaches to the US and the rest of the world, C.D. Institute policy analysts have been seen and heard where it counts.
Examples of their many presentations include:
Jack Mintz: The wisest way to deal with income trusts was addressed by Jack Mintz before the Standing Senate
committee on Banking, Trade and Commerce on September 29, 2005. He advised the Committee that the best
way of maximizing the efficiency of the economy is to redesign the tax system to ensure that it is neutral between
different types of business organizations. This could be accomplished by lowering general corporate income tax
rates to 20 percent across Canada, he said, or by raising the dividend tax credit on public corporate shares.
Several federal and provincial ministers and their ministries across the country also solicited his views on a range
of topics.
William B.P Robson: The need for clearer priorities and less spending was a major focus of presentations on
Parliament Hill by Senior Vice President and Director of Research Bill Robson in 2005. He discussed the merits
of a new fiscal forecasting body — an idea later embodied in the April 2006 proposal for a Parliamentary Budget
officer — before the House of Commons Standing Committee on Finance in March, and addressed a
Department of Finance retreat on fiscal priorities in May. He criticized the run-away spending sanctioned by Bill
C-48 before the Standing Committee on Finance in June, and returned to the Committee one more time in
September to advocate a new fiscal framework that would curb in-year spending increases.
Danielle Goldfarb: Canada’s International Policy Statement fails to adequately set priorities, according to Danielle
Goldfarb, Senior Policy Analyst for the C.D. Howe Institute. In comments before the House of Commons
Standing Committee on Foreign affairs and International Trade in November, Goldfarb said that, to most effec-
tively meet Canadian interests, Ottawa should focus its limited resources on a narrower set of issues and countries
than the paper envisions.
Finn Poschmann: Amid a war of words over federal transfers to the provinces, the House of Commons
Subcommittee on Fiscal Imbalance launched cross-country hearings. The C.D. Howe Institute’s Associate
Director of Research, Finn Poschmann, addressed the Committee in Toronto in March. His remarks, “The
Federal Provincial Balance: Teetering on the Edge of Coherence,” suggested that the current system is in disarray,
but he also saw good reasons for optimism.
Yvan Guillemette: Among other appearances, Guillemette presented to the Senate Standing Committee on
Banking, Trade and Commerce in relation to its study of productivity in Canada. He discussed the importance
of US R&D and technology transfers for Canadian productivity, and linked that with the importance of having
a business climate conducive to investment because technology is embodied in capital goods (with associated tax
implications).
W W W. C D H O W E . O R G C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 1 1

14. 1 2 C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 W W W. C D H O W E . O R G
THE INSTITUTE’S PEOPLE
Staff
Monique Cormier
Vice President Operations
Nairy Emirzian
Office Coordinator
James Fleming
Editor
Danielle Goldfarb
Senior Policy Analyst
Kristine Gray
Executive Assistant/Event
Financial Coordinator
Yvan Guillemette
Policy Analyst
Rowena Jeffers
Senior Coordinator, Member
and Financial Services
Julie Kelsey
Senior Event Planner
Diane King
Page Layout Designer
Donna Leitch
Corporate Secretary and
Senior Executive Assistant
to the President and CEO
Tracy Lerdorf
Development and Membership
Coordinator
Wendy Longsworth
InformationTechnology
and Publications Manager
Warren Mahomed
System and Database
Administrator
Jack Mintz
President and CEO
Jan Moffatt
Librarian and Information
Services Coordinator
Duncan Munn
Director of Development
and Public Affairs
Finn Poschmann
Associate Director of Research
William B.P. Robson
Senior Vice President and
Director of Research and
Canadian Liaison Officer,
BNAC
The Funded Scholars Program
The Funded Scholars Program enables the C.D. Howe Institute to engage leading scholars, for a
portion of their time, to participate actively in its research program. Chairs are selected on the basis
of their record of scholarship and supported by the generous donations of several organizations. We
would like particularly to acknowledge the following organizations and individuals who participat-
ed in the Program during 2005.
• George Weston Ltd. for its support of Duanjie Chen, George Weston Analyst in Tax Policy;
• Encana Corporation for its support of Kenneth J. McKenzie, EnCana Scholar in Public Policy;
• Marcel Boyer, Quebec Scholar in Economic Policy;
• Roger Phillips for his support of John Richards, Phillips Scholar in Social Policy.
Fellows-in-Residence:
Alan Alexandroff
Marcel Boyer
Duanjie Chen
David Laidler
Kenneth J. McKenzie
John Richards
Senior Fellows:
Yvan Allaire
John W. Crow
Don Drummond
Claude Forget
Fred Gorbet
Stanley Hartt
Peter Meekison
Al O’Brien
Sylvia Ostry
Grant Reuber
GordonThiessen
Research Fellows:
Charles Beach
Richard Bird
James Davies
W. Erwin Diewert
Wendy Dobson
Pierre Fortin
Charles Freedman
Richard Harris
Michael Hart
John Helliwell
Jon Kesselman
Paul Masson
Kevin Milligan
Patrick Monahan
Alice Nakamura
Nancy Olewiler
Christopher Ragan
William Scarth
Michael Smart
MichaelTrebilcock
DanielTrefler
William Watson
Thomas A. Wilson
RobertYoung
International Fellows:
Richard Blundell
Willem Buiter
Jonathan Gruber
Robert Haveman
Peter Howitt
Robert Howse
Neil Quigley
Hans-Werner Sinn
2005 Scholars
The C.D. Howe Institute Staff, 2005

15. CanadianTire Corporation, Limited
CanadianWestern Bank
Canam Group Inc.
Candor Investments Ltd.
Cangene Corporation
CanWest Global Communications Corp.
Cargill Limited
Carleton University
Catalyst Paper Corporation
The CCL Group Inc.
Ken Chapman
CHC Helicopter Corporation
Ben Cherniavsky
Kenneth Christoffel
Clairvest Group Inc.
CMA Holdings Inc.
CN
Jack Cockwell
Cogeco Inc.
MarshallA. Cohen
Concordia University
ConocoPhillips Canada
E. Kendall Cork
Marcel Côté
Glen Cronkwright
Paul R. Curley
Thomas P. d’Aquino
CatherineA. Delaney
Deloitte &Touche LLP
Ildiko K. Dereza
Desjardins Ducharme LLP
Deutsche BankAG, Canada Branch
Wendy Dobson
Dofasco Inc.
Domtar Inc.
Donner Canadian Foundation
Duke Energy GasTransmission Canada
Dynacare Kasper Medical Laboratories
E.I. du Pont Canada Company
Janet Ecker
John F. Eckert
Economap Inc.
Edco Financial Holdings Ltd.
Edmonton Economic Development
Corporation
E-L Financial Corporation Limited
ElkValley Coal Corp.
Emera Inc.
William F. Empey
Enbridge
EnCana Corporation
Energy Council of Canada
Enerplus Resources Fund
Ensign Resource Service Group Inc.
Ensis Growth Fund Inc.
Ernst &Young LLP
Morrey M. Ewing
Export Development Canada
Falconbridge Limited
Fednav Limited
JohnT. Ferguson
Fidelity Investments
Finning International Inc.
Aaron Fish
James D. Fleck
Ford Motor Company of Canada, Limited
Forest ProductsAssociation of Canada
Robert and Julia Foster
Four Halls Inc.
Four Seasons Hotels Limited
Fraser Milner Casgrain LLP
Fraser Papers Inc.
Gaz Métro
GE Canada
General Motors of Canada Limited
Gibson Energy Ltd.
Christine Girvan
Gluskin Sheff +Associates Inc.
Goal Group of Companies
Goldberg Group
Goodmans LLP
Peter Goring
JohnA.G. Grant
James K. Gray
Greater Saskatoon Chamber
of Commerce
The Great-West LifeAssurance Company,
London Life Insurance Company and
Canada Life
John Haag
Geoffrey Hale
The Harold Crabtree Foundation
Harvard Developments Inc.,A Hill
Company
G.R. Heffernan
Lawrence Herman
Hill & Knowlton
Historica Foundation
William L. Holt
Honeywell Canada
HSBC Bank Canada
HSD Partners Inc.
H. Douglas Hunter
Hydro-Québec
Lou Hyndman, Q.C.
IBM Canada Ltd.
Imperial Oil Limited
ImperialTobacco Canada Limited
Inco Limited
IndustrialAlliance Life Insurance Company
Information Services Corporation of
Saskatchewan
The Institute for Competitiveness and
Prosperity
Insurance Bureau of Canada
Inter Pipeline Fund
Investment DealersAssociation of Canada
The Investment Funds Institute of Canada
Investors Group
Ipsco Inc.
J.D. Irving Limited
J.P. Morgan Securities Canada Inc.
Jackman Foundation
Jarislowsky, Fraser Limited
W. Edwin Jarmain
John Dobson Foundation
Robert Johnstone
JTI-Macdonald Corp.
Juniper Fund Management
JohnA. Kazanjian
JamesT. Kiernan
Thomas E. Kierans
Frank F. Kolb
KPAAdvisory Services Ltd.
KPMG LLP
Joseph Kruger II
La Jolla Resources International Ltd.
Laval University
Law Commission of Canada
R. John Lawrence
JacquesA. Lefebvre
Lehigh Inland Cement Limited
DavidA. Leslie
David Lindsay
Lockerbie & Hole Inc.
Lombard Canada Ltd.
KevinAbarbanel, President,ABARCAV
Risk Capital
Accenture Inc.
Acklands-Grainger Inc.
Advocis
AGF Management Limited
Agricore United
AIMTrimark Investments
Alcan Inc.
AltaGas
TheAmerican Chamber of Commerce
in Canada
AON Consulting
ARC Financial Corporation
ARC Resources Ltd.
E. JamesArnett, Q. C., of Counsel
ATB Financial
Richard H. Baker
Bank of Nova Scotia
Barrick Gold Corporation
Harry G. Baumann
BCE Inc.
Stuart Belkin
Bell Canada
Bennett Jones LLP
The Birks Family Foundation
William Black
Blake Cassels & Graydon LLP
BMO Financial Group
Boardwalk Equities Inc.
Bombardier Inc.
David E. Bond
R.A.N. Bonnycastle
Borden Ladner Gervais LLP
BP Canada Energy Company
Jack Brodsky
BrookfieldAsset Management Inc.
Brookfield Properties Corp.
BurgundyAsset Management
Burlington Resources Canada Ltd.
BURNCO Rock Products Ltd.
Business Council of British Columbia
Business Development Bank of Canada
C.D. Howe Memorial Foundation
C.M. Harding Foundation
Cadillac Fairview Corp. Ltd.
Caisse de dépôt et placement
du Québec
Robert C. Caldwell
Cameco Corporation
Campbell Strategies
Canada Deposit Insurance Corporation
Canada Overseas Investments Limited
Canada Post Corporation
CanadianAssociation of Petroleum
Producers
CanadianAssociation of Recycling
Industries
Canadian BankersAssociation
Canadian Chamber of Commerce
Canadian Chemical Producers’
Association
Canadian Energy PipelineAssociation
Canadian Federation of
Independent Business
Canadian Finance & LeasingAssociation
Canadian Imperial Bank of Commerce
The Canadian Institute of
CharteredAccountants
Canadian Life and Health Insurance
Association Inc.
Canadian Manufacturers & Exporters
Canadian Oil Sands Limited
Canadian Pacific Railway
Canadian Pension Plan Investment Board
CanadianTax Foundation
The Institute’s Members
W W W. C D H O W E . O R G C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 1 3
The Benefactors Lecture and Dinner
The Benefactors Lecture, 2005, raised many pertinent issues for
a Canadian audience. Delivered by Charles E. McLure, Jr.,
Senior Fellow at the Hoover Institution, Stanford University,
the Lecture and Dinner was sponsored by Enbridge Inc.
Dr. McLure spoke on “The US Debate on Tax Reform and
its Implications for Canada: Will the US Sneeze? Will Canada
Catch Cold?” He was instru-
mental in developing the 1984
tax reform study by the US
Department of the Treasury that
led to the US tax reform of
1986, and thus was well placed
to present a review of US tax
developments that could have
major impacts on Canada. In a
wider context, he pointed out,
many countries have reduced
taxes on saving in favour of expand-
ing the taxation on consumption.

16. 1 4 C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 W W W. C D H O W E . O R G
THE INSTITUTE’S MEMBERS
Lowndes Lambert Group Canada Ltd.
J.W. (Wes) MacAleer
WilliamA. Macdonald, Q.C.
Robert M. MacIntosh
Maclab Enterprises
John MacNaughton
MagellanAerospace Limited
The Manning Centre for Building Democracy
Manulife Financial
Georg Marais
Marsh Canada Limited
Masonite International Corporation
Max Bell Foundation
McCarthyTétrault LLP
McGill University
James P. McIlroy
McMaster University
McMillan Binch Mendelsohn LLP
John D. McNeil
Mercer Human Resource Consulting Limited
Merrill Lynch Canada Inc.
Minto Developments Inc.
William Molson
Monarch Corporation
Monitor Group
Moosehead Breweries Limited
Morneau Sobeco
Russell J. Morrison
F.W. Orde Morton
MTSAllstream Inc.
John P. Mulvihill
N M Rothschild & Sons Canada Limited
National Bank of Canada
National Leasing
NAV CANADA
Edward P. Neufeld
New Brunswick Power Corporation
Nexen Inc.
Norbord Inc.
Northam RealtyAdvisors Limited
NOVA Chemicals Corporation
Sheila H. O’Brien
Onex Corporation
Ontario Centres of Excellence Inc.
Ontario HospitalAssociation
Ontario Municipal Employees Retirement
System (OMERS)
Ontario Power Generation Inc.
Ontario Securities Commission
OntarioTeachers’ Pension Plan
OntarioTrillium Foundation
William Orovan
Osler, Hoskin & Harcourt LLP
James S. Palmer, C.M.,ADE, Q.C.
Pembina Pipeline Income Fund
PennWest Petroleum Ltd.
Petro-Canada
Phillips, Hager & North Investment
Management Ltd.
Roger Phillips
Pirie Foundation
Power Corporation of Canada
Pratt &Whitney Canada
PricewaterhouseCoopers LLP
Procter & Gamble Inc.
Property and Casualty Insurance
Compensation Corporation
Queen’s University
The RailwayAssociation of Canada
RBC Capital Markets
RBC Financial Group
Dr. Donald S. Reimer
Rogers Communications Inc.
Ryerson University
Samuel Son and Co. Limited
SaskatchewanWheat Pool
Guylaine Saucier
Sceptre Investment Counsel
Jon Schubert, President and CEO
Hugh D. Segal
Lindsay K. Shaddy
Sejal Shah
Gordon Sharwood
Shell Canada Limited
Sherritt International Corporation
Mary-Anne Sillamaa
Simon Fraser University
LeslieA. Sinclair
Paul G. Smith
SNC Lavalin Group Inc.
Sobeys Inc.
Philip Spencer, Q.C.
Wayne Steadman
Stewart McKelvey Stirling Scales
Morley Stock
Sun Life Financial Inc.
Suncor Energy Inc.
Harry Swain
Christopher Sweeney
Thomas H.B. Symons
Syncrude Canada Limited
Tax Executives Institute, Inc.
TD Bank Financial Group
Teck Cominco Limited
Frederick H.Telmer
TheThomson Corporation
TheToronto Board ofTrade
Torstar Corporation
Torys LLP
TransAlta Corporation
TransCanada Corporation
Transcontinental Inc.
True Energy Inc.
Robert J.Turner, Q.C.
UBS GlobalAsset Management
(Canada) Co.
Université de Montréal
University College of the FraserValley
University ofAlberta
University of British Columbia
The University of Calgary
The University of Lethbridge
University of Manitoba
University of Ottawa
University of Regina
University of Saskatchewan
University ofToronto
University ofWaterloo
The University ofWestern Ontario
G. DouglasValentine
Via Rail Canada Inc.
WarrenViegas
W. GarfieldWeston Foundation
Jack H.Warren
Weston Forest Corp.
David J.S.Winfield
Alfred G.Wirth
WatsonWyatt
Adam H. Zimmerman
View’s expressed by the C.D. Howe Institute do not neces-
sarily reflect those of its members.
Dinner guests enjoy food for thought (left); Russell Morrison (centre left) with Alison Dyer and Alfred Wirth; eminent Canadian Allan
Gotlieb (left in photo at right), with then-US consul general Jessica Le Croy and Grant Reuber, a former Institute chairman.

17. AUDITOR’S REPORT ON FINANCIAL STATEMENTS
To the Members of
C.D. Howe Institute
The accompanying summarized balance sheet and statement of revenue, expenses and accumulated net
revenue are derived from the complete financial statements of C.D. Howe Institute as at December 31,
2005 and for the year then ended on which we expressed an opinion without reservation in our report
dated February 17, 2006. The fair summarization of the complete financial statements is the responsi-
bility of management. Our responsibility, in accordance with the applicable Assurance Guideline of The
Canadian Institute of Chartered Accountants, is to report on the summarized financial statements.
In our opinion, the accompanying financial statements fairly summarize, in all material respects,
the related complete financial statements in accordance with the criteria described in the Guideline
referred to above.
These summarized financial statements do not contain all the disclosures required by Canadian
generally accepted accounting principles. Readers are cautioned that these statements may not be
appropriate for their purposes. For more information on the Institute’s financial position, results of
operations and changes in financial position, reference should be made to the related complete finan-
cial statements.
Chartered Accountants
Toronto, Ontario
February 17, 2006
W W W. C D H O W E . O R G C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 1 5

18. 1 6 C . D . H O W E I N S T I T U T E A N N U A L R E P O R T, 2 0 0 5 W W W. C D H O W E . O R G
AUDITOR’S REPORT ON FINANCIAL STATEMENTS
SUMMARIZED BALANCE SHEET
As of December 31, 2005
2005 2004
ASSETS
CURRENT
Cash $ 274,480 $ 440,693
Marketable securities — at cost, which approximates market value 1,493,401 1,498,559
Accounts receivable and accrued interest 155,367 48,015
Prepaid expenses 37,878 61,368
1,961,126 2,048,635
CAPITAL ASSETS 503,950 224,143
$ 2,465,076 $ 2,272,778
LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 214,797 $ 364,790
Deferred revenue 850,240 955,961
1,065,037 1,320,751
LONG TERM
Deferred capital contributions 233,933 —
Deferred rent 209,540 6,263
443,473 6,263
1,508,510 1,327,014
CAPITAL AND ACCUMULATED NET REVENUE
Capital 212,898 212,898
Accumulated net revenue 743,668 732,866
956,566 945,764
$ 2,465,076 $ 2,272,778
Year ended December 31, 2005
2005 2004
REVENUE
Contributions and subscriptions $ 2,745,102 $ 2,380,091
Publications, interest and other 337,690 265,724
3,082,792 2,645,815
EXPENSES
Research, administrative and project expenses 3,001,790 2,587,845
Amortization 68,050 29,515
3,069,840 2,617,360
EXCESS OF REVENUE OVER EXPENSES FROM OPERATIONS 12,952 28,455
UNREALIZED FOREIGN EXCHANGE LOSS FROM MARKETABLE SECURITIES (2,150) (8,621)
EXCESS OF REVENUE OVER EXPENSES 10,802 19,834
ACCUMULATED NET REVENUE, BEGINNING OF YEAR 732,866 713,032
ACCUMULATED NET REVENUE, END OF YEAR $ 743,668 $ 732,866
SUMMARIZED STATEMENT OF REVENUE, EXPENSES AND ACCUMULATED NET REVENUE