IFIC Appears Before House of Commons Standing Committee on Finance: Pre-budget Consultations
October 31, 2011
TORONTO The Investment Funds Institute of Canada (IFIC) appeared today before the House of Commons Standing Committee (the Committee) with respect to the Pre-budget Consultations. Appearing on behalf of IFIC were Debbie Pearl-Weinberg, General Tax Counsel at CIBC and Chair of IFICs Taxation Working Group, as well as James Carman, IFICs Senior Policy Advisor, Taxation. Ms. Pearl-Weinbergs remarks were centered around two themes:
Fairness in taxation around investment options; and
Fairness in retirement funding options.
Canadians own approximately $749 billion in mutual funds, with almost eighty percent of those held in registered plans. Almost fifty percent of tax-deferred wealth is held in mutual funds, said Ms. Pearl-Weinberg. As such, ensuring adequate retirement savings for Canadians is an important issue to IFIC Members.
In her remarks to the Committee, Ms. Pearl-Weinberg commented on how the structure of mutual funds differs from other financial products, which results in the inequitable sales tax treatment of mutual funds. This reduces the return to mutual fund investors. She added that the inequity has existed since the implementation of the Goods and Services Tax (GST) but has been exacerbated by the addition of the Harmonized Sales Tax (HST). In this regard, IFIC recommends that the government review the application of the GST and HST to mutual funds.
Ms. Pearl-Weinberg also reinforced IFICs support for the creation of Pooled Retirement Pension Plans (PRPPs) as a retirement saving option for Canadians. She noted that IFIC recommends that the investments in PRPPs should not be restricted to passive investment strategies and that group registered retirement savings plans be a true alternative to PRPPs.
The complete text of the remarks are available on the IFIC website at www.ific.ca.
IFIC is the national association of the investment funds industry. Membership consists of mutual fund companies, retail distributors and industry affiliates.
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