IFIC Welcomes Finance Canada Amendment to Advantage Rules
October 10, 2019 (Toronto) – The Investment Funds Institute of Canada (IFIC) welcomes the federal Department of Finance’s decision to amend the definition of “advantage” under subsection 207.01(1) of the Income Tax Act. The update will specifically clarify that investment management fees paid outside of registered plans do not constitute an advantage for the plan.
“We are pleased that the government has recognized that paying investment fees outside of registered plans does not lead to a tax-motivated advantage,” said Minal Upadhyaya, Vice President, Policy, IFIC. “This development will have a positive impact on investors, who will not be subject to penalties for entering into this type of arrangement.”
The Canada Revenue Agency originally announced that payment of investment management fees outside a registered plan was considered an “advantage” in November 2016. Extensions to the implementation date were provided, as discussions continued between the government and external stakeholders. IFIC has been working with industry and government stakeholders to reverse this proposed implementation since 2016.
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.
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