IFIC Comments on Federal Budget 2016
Toronto – March 22, 2016 – The Investment Funds Institute of Canada (IFIC) responded to today’s federal budget indicating its support for several initiatives. At the same time, it cautioned the government on its intention to eliminate deferral of capital gains tax by investors in mutual fund corporations structured as switch funds.
IFIC commended the government for its willingness to pursue a national solution to addressing retirement savings shortfalls. “We understand Ontario’s goals for the ORPP, but remain opposed to a single-province solution that fails to target those most in need,” said Joanne De Laurentiis, president and CEO. “We hope that the federal government will succeed in forging agreement across the provinces that will also satisfy Ontario’s goals and look forward to hearing the views of Canadians through the government’s consultative process. ”
The association also expressed its support for the government’s commitment to keep moving forward with the Capital Markets Regulatory Authority (CMRA). “The CMRA has the potential to deliver efficiencies for the industry and investors, but transitioning to the new system will impose significant changes on the industry that will take time to implement. The industry provided considerable input into the draft legislation released last fall and looks forward to reviewing the revised draft when it is released this summer, ” commented De Laurentiis.
One aspect of the budget that has triggered concern for the investment funds industry is the announcement that the government intends to eliminate the ability of investors to defer tax when switching from one fund to another within a mutual fund corporation. Currently, such transactions do not attract tax because they are treated as a switch between two funds in the same family, rather than a sale of one fund and a subsequent purchase of another. The announced policy holds potential impact for a large number of investors, including some of modest means. “We will be analysing the potential impact and seeking further discussions with Finance Canada in the months ahead,” De Laurentiis said.
The Investment Funds Institute of Canada is the voice of Canada’s investment funds industry. IFIC brings together 150 organizations, including fund managers, distributors and industry service organizations, to foster a strong, stable investment sector where investors can realize their financial goals. By connecting Canada’s savers to Canada’s economy, our industry contributes significantly to Canadian economic growth and job creation. The organization is proud to have served Canada’s mutual fund industry and its investors for more than 50 years.
For more information:
Sara Clodman, Senior Manager, Public Affairs, email@example.com, 416-309-2317