Eliminate labour fund tax credit, says C.D. Howe

Raising capital: How labour fund tax credits work (March 9, 2004) Ottawa could save $100 million a year by scrapping the federal tax credit for labour-sponsored investment funds (LSIFs), says the C.D. Howe Institute. That’s one of several tax reforms suggested in C.D. Howe’s shadow budget, which was released today. Most labour funds qualify for […]

By Doug Watt | March 9, 2004 | Last updated on March 9, 2004
2 min read
  • Raising capital: How labour fund tax credits work
  • Labour-sponsored investment fund performance fees stir controversy
  • Researchers propose tax prepaid savings plans
  • Labour movement (from the February 2004 edition of Advisor’s Edge)
  • RRSP alternative (from the January 2004 edition of Advisor’s Edge)

    The shadow budget also calls for the elimination of the foreign property rule, which prevents Canadians from holding more than 30% of their RRSP assets in foreign securities.

    “The foreign property rule affects all Canadians who save for retirement through RRSPs and registered pension plans, increasing their risks and lowering their returns, while providing no benefit to Canadian investment,” the report claims.

    In addition, C.D. Howe suggests increasing the age at which RRSPs must be converted to RRIFs to 71 to 69, with a further increase to 73 in 2005.

    “With life expectancy rising, many Canadians will extend their working lives and will wish to continue saving longer.”

    Federal Finance Minister Ralph Goodale will unveil his first budget in Ottawa on Tuesday, March 23.

    Advisor.ca will feature extensive coverage of the federal budget the evening of March 23, including exclusive reports from the lock-up.

    Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com

    (03/09/04)

    Doug Watt

  • Raising capital: How labour fund tax credits work
  • Labour-sponsored investment fund performance fees stir controversy
  • Researchers propose tax prepaid savings plans
  • Labour movement (from the February 2004 edition of Advisor’s Edge)
  • RRSP alternative (from the January 2004 edition of Advisor’s Edge)

    The shadow budget also calls for the elimination of the foreign property rule, which prevents Canadians from holding more than 30% of their RRSP assets in foreign securities.

    “The foreign property rule affects all Canadians who save for retirement through RRSPs and registered pension plans, increasing their risks and lowering their returns, while providing no benefit to Canadian investment,” the report claims.

    In addition, C.D. Howe suggests increasing the age at which RRSPs must be converted to RRIFs to 71 to 69, with a further increase to 73 in 2005.

    “With life expectancy rising, many Canadians will extend their working lives and will wish to continue saving longer.”

    Federal Finance Minister Ralph Goodale will unveil his first budget in Ottawa on Tuesday, March 23.

    Advisor.ca will feature extensive coverage of the federal budget the evening of March 23, including exclusive reports from the lock-up.

    Filed by Doug Watt, Advisor.ca, doug.watt@advisor.rogers.com

    (03/09/04)