STANDING COMMITTEE ON FINANCE
COMITÉ PERMANENT DES FINANCES
[Recorded by Electronic Apparatus]
Wednesday, November 5, 1997
The Chairman (Mr. Maurizio Bevilacqua
(Vaughan—King—Aurora, Lib.)): Order.
As you know, the finance committee, pursuant to Standing Order
83.1, is holding pre-budget consultation hearings to get input
from Canadians as to what measures we should be
introducing or recommending to the Minister of Finance
for the upcoming budget.
This afternoon we have representatives from the
Canadian Life and Health Insurance Association,
the Life Underwriters Association of Canada, the
Investment Funds Institute of Canada, and the
Multi-Employer Benefit Plan Council of Canada.
We will begin with the representative from the
Canadian Life and Health Insurance Association, Mr.
Mark Daniels, president.
Mr. Mark Daniels (President, Canadian Life and
Health Insurance Association): Thank you very much, Mr.
We welcome this opportunity and
appreciate the chance again to appear before your
committee in its annual pre-budget consultations.
Indeed, the industry is pleased to have participated in
each of the consultation periods the committee has held
since 1994. Clearly, over this period the country's
financial situation has changed a great deal. Indeed,
in terms of overall fiscal management the federal
government deserves a great deal of credit for the
amount of progress made in reducing the annual
budgetary deficit to the point where this country is
now on the brink of realizing the real likelihood of a
Our industry strongly supports the
government's broad plan of action for fiscal restraint.
We urge the government to continue its prudent
financial management as a means of ensuring long-term
With a balanced budget projected for no later than the
1998-99 fiscal year, the minister has now asked that
this committee determine the views of Canadians as they
pertain to future financial direction the government
should pursue beyond the balanced budget.
In that context, Mr. Chairman, your committee has
identified a number of focus questions for witnesses.
One of these questions asked: What are the appropriate
new strategic investments and changes to the tax system
that would allow the government to best achieve its
In attempting a very brief comment on that question,
Mr. Chairman, let me first reiterate that we are not
encouraging the federal government to change its
current strategy of deficit and, ultimately and
necessarily, debt reduction. The job is started; it is
by no means finished.
Having said that, if some expenditure items move onto
the radar screen, we do have some views on what kinds of
expenditure items could be of value to the population
at large. Our submission presents a specific
initiative that we believe might address this question.
In recent years our industry has worked closely with
this committee in addressing a concern raised by
Minister Martin a couple of years ago. At that time,
the minister indicated that there might be a large
group of Canadians, up to eight or nine million, he
thought, who did not have supplementary health and
dental protection because they could not benefit from
current tax treatment. In an effort to determine the
true extent of supplementary coverage in Canada and to
assess the reason some groups may lack coverage,
several organizations, including the CLHIA,
conducted a study two years ago to determine the true
extent of supplementary coverage in Canada and to
assess whether tax unfairness plays a role.
A key finding of that study was that nearly 26 million
Canadians, or about 88% of the population, had
supplementary coverage above and beyond basic hospital
and medical services provided through medicare under
special government or private supplementary plans. Of
the 26 million Canadians, about 20 million people are
covered by private health insurance plans, usually
group plans through employers. The remaining 6 million,
the elderly and welfare recipients, are covered under
provincial plans. So about 3.6 million people don't
have supplementary coverage, about 12% of the
There are three groups that make up that 3.6 million
people. The first, about two million of them, consists
of employees and their dependants in workplaces that
could have supplementary coverage and for some reason
don't. This group's lack of coverage can't be
attributed to tax factors.
The second group, about one million in number, including
their dependants, constitutes the unincorporated
self-employed. Here you would be dealing with
farmers, doctors, architects perhaps, consultants, and
so forth. The workers in this group, unlike their
counterparts in incorporated small businesses, cannot
deduct the cost of their own supplementary coverage as
a business expense. For them, a simple tax change in
the deductibility of premiums would put them on the
same footing as the unincorporated
The balance, about 600,000 in number, consist of
Canadians with little or no attachment to the
employment system. Changes to the tax treatment of
employer contributions to private supplementary plans
would do nothing to alter this group's lack of
The challenge facing our industry has been to increase
coverage among these three groups who could be—at
least the first two groups—within the reach of the
private sector plans but who nonetheless currently
lack coverage. A priority is the small-business
sector, which accounts for a significant proportion of
the first two of these groups.
In response to that challenge we have done a
considerable amount of work with the Canadian
Federation of Independent Business to try to
understand better the reasons for that lack of
Several factors appear to account for it. First is a
lack of information and awareness. Many small
businesses may be simply unaware of the availability of
group insurance products.
The second factor is tax disincentives. As noted
previously, a large group of small businesses, the
unincorporated self-employed, face a tax disincentive
since they cannot deduct health and dental costs from
income for tax purposes.
The third factor is the recent focus of insurers on
larger businesses. For a number of years our industry
spent a lot of their time worrying about large groups
and not much about small.
In recent years we've taken a lot more time to try
to focus on the small group, the under-ten-employees market.
We're working together with the CFIB on three
initiatives right now. One is to obtain more
extensive and precise information on the factors
contributing to lower coverage among small
businesses. The second is
to increase awareness and information on group
insurance products among small businesses and insurance
providers; that is, both sides of the equation.
Third is to increase awareness and information among
insurers on the opportunities to provide more extensive
and customized coverage targeted at very small firms
and the self-employed.
In light of the improved fiscal situation,
we are recommending to this committee that the federal
government may wish to join with the CFIB and our
industry in these ongoing efforts to improve
supplementary health and dental coverage among small
businesses by removing the existing tax inequity
faced by the unincorporated self-employed.
Both the House of Commons finance committee
and this industry have previously recommended
that this tax inequity be eliminated. We submit that
the current fiscal climate may present an appropriate
window of opportunity for the government to follow
through on such a recommendation.
The Chairman: Thank you very much, Mr. Daniels.
We'll now move to the Life Underwriters Association of
Canada, Mr. David Thibaudeau. Welcome.
Mr. David Thibaudeau (President, Life
Underwriters Association of Canada): Thank you, Mr.
Chairman, for the opportunity to appear before your
I'm here on behalf of 18,000 members
of the Life Underwriters Association of Canada,
Canada's largest professional association for insurance
and financial advisers. LUAC members provide financial
advice and solutions to meet the needs of Canadian
consumers and offer such products as life and health
insurance, annuity contracts, segregated funds,
investment funds, and related financial services.
LUAC formed the Conference for Advanced Life
Underwriting in 1991 to meet
the needs of its members who specialize
in such areas as estate planning, business succession,
employee benefits, and pensions. Many of the clients of
CALU members are the owners
of small and medium-size businesses.
Mr. Chairman, LUAC and CALU members help Canadians
achieve financial security. Our members are in daily
contact with millions of Canadians determining their
personal, family, and business needs and then providing
product solutions to help meet those needs.
In his first address to this committee, in 1993, the
Minister of Finance spoke of the sense of insecurity
and economic anxiety shared by Canadians during a time
of poor economic growth and excessive personal and
public debt. The key factor in the restoration of
individual economic confidence is the development of a
sound financial plan. This is as true for governments
as it is for individual Canadians and their families.
We therefore support the government's practice of
economic and fiscal planning based on economic
assumptions which are more prudent than the consensus
forecast of the private sector. We support the two-year
planning cycle, which enforces discipline, and we
agree with the use of a sizeable contingency reserve
which if not needed by the end of the year gets
applied to reducing the debt.
We were pleased that the minister in his economic and
fiscal update reinforced the government's commitment to
deficit and debt reduction. Our members are concerned,
however, that the 50-50 allocation the government
has adopted as a guiding principle for planning
purposes does not place enough emphasis on debt
reduction. We believe the formula should instead
devote at least 50% of the fiscal dividend exclusively
to paying down the debt, with the other 50% going to tax
reduction and new expenditures which address pressing
economic and social needs.
Canada's overall debt burden remains extremely high,
including $190 billion of direct borrowings by
provincial and territorial governments at the end of
1996. Canada's overall debt-to-GDP ratio is still
running at more than 100%, much too high by any
We would do well to remember that today's debt is a tax we
choose to impose on our children and grandchildren.
The finance minister told this committee that reducing the
debt-to-GDP ratio will improve economic efficiency and
growth by providing an environment that is more
conducive to entrepreneurship and investment. We
couldn't agree more.
Canadians recognize the common sense of debt
reduction, and that is why cutting the debt has become
their top fiscal priority. According to a recent
Globe and Mail-Angus Reid poll,
now is clearly the
time for the government to make debt
reduction its top
budget priority as well.
In the limited time I have left, Mr. Chairman, I would
like to touch briefly on the issues of retirement
planning, health benefits and charitable giving.
As financial advisers, our members work with Canadians of
all income levels to help them prepare for their
financial futures. Given the impending
adjustments to the Canada Pension
Plan and the reformatting of the old age security and
guaranteed income supplement under the seniors benefit
program, Canadians are telling our members that they
are very concerned about their ability to provide for
themselves and their families in retirement.
As members of the Retirement Income Coalition, LUAC
and CALU are working with the federal government
on a comprehensive plan to address those concerns, one
that considers the importance of both public and
private sector vehicles.
Canadians have a right to expect that government
measures that adjust public programs to meet the new
demographic and economic realities are accompanied by
adjustments that enhance the ability of individual
Canadians to save for their own retirement. To be
specific, the time to raise the annual RRSP
contribution limit is now.
Turning now to health benefits, CALU was instrumental
in the formation of a health benefits coalition, which
is working to enhance the government's understanding of
the interconnectedness of public and private programs
in the overall provision of health care to Canadians.
In its December 1996 report to the House, this
committee noted the importance of private plans to the
health care system. The committee in fact recommended
that the cost of supplemental medical and dental plans
for unincorporated self-employed Canadians and their
dependants be made deductible from income.
We ask the
members of the 1997 finance committee to again reassert
this important recommendation.
Mr. Bill Strain, who has chaired taxation for CALU,
participated in an earlier discussion with this
committee regarding the very serious consequences of
draft legislation related to budget resolution 21. On
behalf of LUAC and CALU members, I would simply like to
restate our request that this committee recommend the
withdrawal of this legislation and that the government
consider fully the revised valuation process endorsed by the
Canadian Institute of Business Valuators as a
In closing, LUAC and CALU wish to compliment the
members of this committee for their demonstration of
openness and consultation during these pre-budget
hearings. You've demonstrated your willingness to
listen to Canadians from all walks of life on the
issues that must be addressed.
We thank you for this opportunity to participate. We
look forward to your questions.
The Chairman: Thank you very much, Mr. Thibaudeau.
We'll now move to the representative from the
Investment Funds Institute of Canada, the Honourable
Mr. Tom Hockin (President and Chief Executive
Funds Institute of Canada): Thank you, Mr. Chairman.
It's nice to see you again.
Mr. Riis, it's nice to see
It's a pleasure to be here trying to
persuade a government rather than trying to defend one.
The Chairman: Is it easier?
Mr. Tom Hockin: I think it's a little bit easier.
I'm the president of IFIC today. This is the
Investment Funds Institute of Canada. IFIC is the
member association of the mutual funds industry in
We appreciate the enormous challenge that the
government has in deciding on the future course of the
nation's finances and the importance of this committee in
guiding this decision.
We wanted first of all to say that we're very
supportive of the direction taken so far with regard to
deficit reduction. We're very encouraged by recent
comments made by the Prime Minister that the books may
be balanced by the end of the year.
Although I will not devote my time today to discussing
fiscal policy much further, I will say that, going
forward, we believe that debt reduction is a very
What I intend to focus on today is an initiative that
would have no direct fiscal impact—that's good news
for members of the committee—but would still go a long
way in giving Canadians a greater opportunity to
achieve a financially secure retirement, which I
believe should be the priority of this government,
especially in light of our aging population.
The initiative I'm referring to is to increase
the foreign property rule.
First, let me provide you
with an idea of how big the mutual fund industry is,
because it is bringing this idea forward.
At the end of 1991, assets under management by the
mutual fund industry were $49.9 billion. As of today
they're $283.7 billion. That is a 470% increase. And
assets under management have increased by 51% in the
last 12 months alone. So this is a very fast-growing
It's growing because Canadians are worried about
saving for retirement and they're worried about saving
for other major needs, such as university education for
their children. They know they face huge financial
commitments down the road and that their nest eggs may
not grow adequately in a low-interest rate environment.
So that particular concern is to a large measure
pushing this industry that I am representing today.
In the midst of these developments, ordinary Canadians
have come to recognize that they do not need to be rich
to get the benefits of professional management of their
funds through mutual funds, as well as the possibility
of higher returns and the benefits of diversification.
The average Canadian can receive these benefits
through these pooled products called mutual funds.
Indeed, half of the 5.2 million Canadians who
contribute to RRSPs earn less that $40,000 per year.
It is not just wealthy Canadians who have RRSPs. Half
of them earn less than $40,000 a year. This is the
pillar for retirement for average-income Canadians and
Recognition on the part of individual Canadians of the
need to save for their own retirement is only part of
the solution to meeting the challenge of financial
security when one retires. The second important
component is ensuring that the funds saved are
diversified and therefore safer, and that they earn
optimal returns within this framework. This is
particularly true for many Canadians who are small
business owners, who rely solely on their RRSPs and do
not have a company pension plan.
This leads me to my main point. There's an urgent
need to change the so-called foreign property rule in
the Income Tax Act. This rule says only 20% of the
money held in registered pension and retirement savings
plans can be invested outside Canada—only 20%. A
change in the foreign property rule would go a long way
to ensuring that Canadians' retirement nest eggs are not
too concentrated in one basket, and are also able to
take advantage of growth industries in other countries
as well as industries that may not exist in Canada, and
thereby earn higher returns.
For example, Canada has 39 industrial groups. The
United States has 90 industrial groups. The sooner
Canadians can make their retirement savings work for
them and grow, the more Canadians can prepare for
retirement and therefore rely less on government, less
on the seniors' benefit, less on the GIS, and save for
other major needs such as educating their children.
This limited diversification world we're living in now
increases investment risk, because investment risk goes
hand in hand with a concentrated portfolio—for
example, a portfolio comprising only Canadian stocks.
Prudent investors do not put all their money in one
stock—they don't do that—or in companies in the same
industry, or in companies located in only one city. No
prudent investor would do that. On a world scale,
however, that is what this foreign property rule
amounts to. The Canadian equities market accounts for
only 2.4% of global stock market capitalization, yet
80% of Canadians' retirement savings must be invested
in this 2.4% category called Canada.
It's interesting that today, as we look at this issue,
we've seen very turbulent global stock markets. They
have shown that during a downturn, not all markets, not
all sectors, decline by the same amount. A diversified
portfolio of stocks, bonds, and cash that includes a
wide range of foreign securities serves to mitigate the
impact of downturns, even global downturns.
IFIC has commissioned Ernst & Young to conduct a study
on the impact of the foreign property rule on investor
returns, and I'm happy to release this study today
publicly for the first time. We wanted to bring it to
your committee because you have the onerous task of
considering budgetary issues.
We commissioned the study because the issue was urgent,
and we hope you will find it illuminating.
We asked Ernst & Young to look at the returns that
could have been earned with a higher foreign property
limit. A 30% foreign content limit over the last 25
years—30% instead of the 20%—would have allowed
Canadian investors to earn up to 1.6% more per year on
their retirement savings portfolios. This estimate is
based on the Morgan Stanley Capital International World
Index, which is fully adjusted for
foreign exchange fluctuations, by the way.
Let's look at an average investor who contributes
$5,000 a year to an RRSP or defined contribution pension
plan. Even a 0.5% increase over 25 years would
amount to an additional $32,000 at retirement.
A policy change that can provide Canadians saving for
retirement with reduced investment risk and higher
returns is sound policy, and that's why we bring it to
this committee. We know there may be some opponents to
such a change, but we believe that is because some
people assume the foreign property rule is good because
it accomplishes certain things, when it may actually do
none of these things.
In particular, some people think forcing 80% of
retirement savings to be invested in Canada creates
jobs. We do not believe the foreign property rule
creates jobs. In fact, if you or I have more money in
our pockets to spend when we retire, due to this
increase in the foreign property rule, we will be
adding a stimulus to the economy that creates jobs.
The larger our nest egg, the more we'll spend in Canada
when we retire.
As we all know, small businesses are the real creators
of jobs in this country. The CFIB's members, who
are creating jobs, see the foreign property rule as a
problem and they support an increase. As it turns out,
small business people are so busy running their
businesses, trying to create jobs, and trying to make
ends meet that they see an increase in the foreign
property rule as meaning they will have a little less
to worry about in retirement. They want their RRSPs to
earn maximum returns, to be diversified, and to be
safe. If small businesses do not think the foreign
property rule creates jobs, it's safe to assume it is
not creating jobs in this country.
We also do not believe the rule is needed to ensure
that big Canadian businesses can find buyers for their
shares. In fact there's so much money coming into
mutual funds that finding buyers for shares listed on
the stock exchanges is not difficult. With the CPP
fund now coming on board, we're going to add that on
top of it, which will be an even bigger inflow of
money, 80% of which must stay in Canada.
For the record, I would also note that most
industrialized countries do not have a foreign property
rule. The United States doesn't have it. The United
Kingdom, Australia, Ireland, and the Netherlands have
no limit on the amount of foreign investment that may
be made by retirement savings. In Japan and
Switzerland the level of allowable foreign investment
is 30%. This is all documented in the study we're
going to give you today.
I've tried to emphasize too the consumer problems
created by this rule. In fact there are other factors
that add urgency, and these are also covered in the
Ernst & Young study. For example, a huge amount of
money is flowing into retirement savings in Canada, and
mutual fund managers and pension funds are becoming
major shareholders in many companies. This is reducing
liquidity in the market and is making institutional
investors very powerful. Is that really what this
country wants? The foreign property rule adds to that
In conclusion, Mr. Chairman, we urge the committee to
make a recommendation that the foreign property rule be
increased at least to 30%. The increase should be
phased in through increases of 2% per year, as the last
increase from 10% to 20% was, between 1990 and 1994.
In conclusion, a higher foreign property rule will
allow for more diversification, which increases safety
and provides an opportunity to take advantage of higher
returns available elsewhere. Such a change—this is
amazing—would not cost the government any money. We
are not looking for a handout. It is not often that
members of Parliament have the opportunity to do
something constructive that's so worth while without
incurring any cost.
I look forward to any questions you may have.
The Chairman: Thank you very much, Mr. Hockin, for
We now move to the Multi-Employer Benefit Plan Council
of Canada—William Anderson, Raymond Koskie, and
Mr. William D. Anderson (President, Multi-Employer
Benefit Plan Council of Canada): Thank you, Mr.
Chairman, for the opportunity to again visit
with the committee and put forth our suggestions.
We've supplied everyone with a copy of our brief.
I would refer you to the executive summary. You'll
notice in that executive summary six major issues,
three of which I would like to touch on briefly.
The Multi-Employer Benefit Plan Council of Canada,
or MEBCO, represents the interests of Canadian
multi-employer benefit plans. It represents
all persons and disciplines involved in MEBPs,
including union and employer trustees,
those who establish and administer the programs,
and the professional third-party administrators,
non-profit or in-house, and all the professionals
involved—legal, accounting and actuarial.
Among MEBCO's many constituents are multi-employer
pension plans, MEPPs, which provide pensions
to their members. There are approximately 360
MEPPs in Canada, which have a membership of almost
700,000 individuals, also representing their families.
In 1994 employee and employer contributions to MEPPs
exceeded $1.1 billion. The majority of Canadians
who participate in MEPPs earn middle to low incomes
in such industries as construction, forestry, retail,
food, hotels, entertainment, transportation, security,
printing, the garment industry, and so on.
Just so that we have a good understanding of what
MEPPs are, and how important they are to this country,
these plans provide continuous benefit coverage to
workers, as they change employment from one
contributing employer to another. The portability
of seamless coverage is essential for workers
in mobile or seasonal jobs.
A worker may be employed by a particular employer
for a day, a week, or a month to work on a specific
project, and then move on to another project, and
thereafter another, etc. Between jobs, he or she might
be off work for a day, a week, a month, or longer.
A worker may work for several different employers
over his or her working life, with periods of unemployment
between jobs. Without a central plan covering all
of his or her work for multiple employers, workers
could not have access to a pension plan.
The purpose of our submission is both to assist the
government in meeting its fiscal and monetary
objectives and to represent the interests of our
members with respect to retirement and taxation issues,
which, I must emphasize, are sometimes somewhat different
from single employers.
If I may, then, I first will highlight the seniors benefit.
MEBCO has considered the ramifications of substituting
the seniors benefit, as proposed in the March 1996
federal budget, for the old age security program,
the guaranteed income supplement program, and
the age and pension tax credits. It strongly
recommends that the seniors benefit proposal
be abandoned, for the following reasons.
First, as a result of the clawbacks that are
to be applied to the combined income of couples,
many seniors with moderate incomes will suffer
a reduction in their retirement income, as compared
with today. In reality, the seniors benefit
is really a seniors tax.
Second, early retirement will be encouraged,
because the additional taxes associated with the seniors
benefit will not take effect until the retiree
reaches age 65.
Third, Canadians will be discouraged from saving for
retirement, since more will be clawed back for every
additional dollar of savings made. Already studies
have shown that the savings of Canadians are greatly
below those necessary to maintain a reasonable standard
of living in retirement. Increased reliance will thus
be placed on the government programs to support them
Fourth, employers will come under increasing
pressure to establish pension plans that provide
greater benefits than they currently do.
Finally, there is no longer the large-budget deficit
that served as a basis for its proposed introduction.
A single senior with $37,000 a year of private
retirement income will see their marginal tax rate
leap from 41% under the current system to 60%.
This is unacceptable.
We've also included appendix A, outlining the
seniors benefits and entitlements, which we can
discuss later, if need be.
Now, in terms of retirement savings incentives,
this is new. We think it's applicable. Canadians
are currently not saving enough to maintain
an adequate standard of living in retirement.
MEBCO believes additional savings incentives
are therefore necessary, and recommends
that the following ones be introduced.
First, introduce a retirement savings credit, whereby an
individual who contributes to a registered pension
plan would be entitled to receive a tax credit for each
additional dollar contributed.
Secondly, introduce a pension plan administrative
support benefit to offset the initial set-up and
administrative costs of new or expanding pension plans.
This would be a one-time-only supplement encouraging
the establishment and increased coverage of pensions.
we strongly believe MEPPs,
multi-employer pension plans, are the foundation of our
members' retirement when combined with an adequate social
security system and CPP. Anything that will give an
incentive to increase the cashflow into these types of
vehicles or increase the number of vehicles of
this type is going to do nothing but help increase the
standard of living for our members and at the same time
decrease their dependency on the government as they
Thirdly, and I don't think I have to touch too much on
this, since Mr. Hockin already has, is the foreign investment
limit. MEBCO feels the government should
increase the foreign investment limit applicable to the
funds of RRSPs and registered pension plans from 20% to
25%. This would increase the choice of investment
vehicles available and the opportunity to yield higher
rates of return on such investments.
I may just touch on what Mark Daniels has
said. We feel the government should avoid inequities
in the tax system. MEBCO strongly recommends that in the
1998 budget no introduction be made of any new
taxes applicable to pension fund assets or to health
and dental benefits received by individuals
from their employers.
The Chairman: Thank you very much, Mr. Anderson.
We'll now proceed to the question-and-answer session,
beginning with Mr. Lunn. Welcome.
Mr. Gary Lunn (Saanich—Gulf Islands, Ref.): Thank
you, Mr. Chairman.
I want to thank all the members
Especially from Mr. Hockin and Mr
Thibaudeau, I'm hearing concerns about Canadians in the future and
their retirement. We've heard some good comments,
especially from Mr. Hockin, on the foreign policy limits
we have there, but my first question is to Mr. Thibaudeau.
I would like to know what you believe the effectiveness
of the current Canada Pension Plan scheme is. Do you
see an alternative to that plan which would allow
Canadians the ability to provide or have
a secure retirement?
Mr. David Thibaudeau: I don't know if I have an
alternative to it. I think the Canada Pension
Plan and all the work that has been going on with it and
the changes and the adjustments that have had to be
made to secure that pillar of retirement planning for
Canadians are important.
Our approach to it has been that it is there. We have
to make sure that at least part of a Canadian's retirement
income is covered off. In other words, how do
you supplement it adequately and make sure it
We believe in the overall
planning there would be three pillars to the
Canadian plan: the seniors' benefit, the
Canada Pension Plan, and RRSPs or RPPs; pension plans.
Mr. Gary Lunn: I heard in your
comments that your members are telling you they are
very concerned about their ability to provide for their
families. That's why I'm going down that path. As
you know, the Reform Party sees huge problems with
long-term viability. It's an arithmetic problem.
The numbers just don't add up.
My next question is for Mr. Hockin.
I very much am
intrigued by your comments on the foreign property rule.
In fact, I support what you have to say.
I'm going to ask you the same question. Do you see
changing the foreign property rule as a
long-term viability measure for really helping retirement
for future Canadians and making sure they have the
ability to provide for their families? Do you think
that is one of the solutions that would very much
relieve the pressures that are going to be put on the
Canada Pension Plan scheme?
Mr. Tom Hockin: I do. I'll tell you why. The
Department of Finance estimates that in 1997 RRSPs and
RPPs will account for almost 50% of all the retirement
income in the country.
The CPP and the QPP is only
28.8% of that picture, and the OAS and GIS is 27.5%. So
we're talking about half of the whole retirement
picture here when we talk about these things. If we
talk about getting a 0.5% or 1% better return a
year because you have slightly better diversification,
you're talking about billions of dollars: $7 billion a
year would flow into the Canadian economy, into the
hands of retired people to spend in Canada. I think
it's a very important part of the puzzle.
Mr. Gary Lunn: Thank you very much.
The Chairman: Mr. Loubier.
Mr. Yvan Loubier (Saint-Hyacinthe—Bagot, BQ): Mr. Chairman,
I am particularly interested in the study presented by the
Investment Funds Institute of Canada concerning the limit placed on
foreign investments in Canadian portfolios. I think this is the
first time we've seen such detailed analysis on this limit and the
impact increasing it would have on returns in portfolios. I find
that interesting, because four years ago the issue was studied by
the finance committee. It wasn't called pre-budget consultations at
that time, but there was a meeting with experts, and the finance
committee did not retain the proposal. In subsequent years, several
witnesses suggested increasing the limit, but we had not studied
the impact analyses.
I would like to make a suggestion, Mr. Chairman. I wonder if
it would be a good idea, this time, to study this analysis and
compare it to other studies that may exist at the Department of
Finance to see what the possibilities are. I was looking at
estimated returns. I find that truly spectacular. Returns are 30%,
40% and even 50% higher with a 30% limit rather than a 20% limit on
foreign property. This time, I wonder if there isn't a good reason
to take a closer and more serious look at this proposal as well as
the analysis included with it.
I am not saying that we will conclude that it is the solution
to adopt. It may be 25%, it may be the status quo or it may be 30%,
as Mr. Hockin is suggesting, but for once, we will at least have
fully covered the issue.
Mr. Hockin, I congratulate you on your analysis and I thank
you for sharing this information with us exclusively here today. I
find that very interesting.
The Chairman: Thank you, Mr. Loubier.
Mr. Nelson Riis (Kamloops, NDP): Thank you very
much, Mr. Chairman.
There are so many questions and some excellent
Tom, you can speak for others as well
in terms of the foreign property rule. The data
indicates that Australia has no limit and yet they have
less than 20% of their funds in foreign. Actually,
other countries are the same. Why would that be? You
make it sound so attractive. My first question is
why limit it to only 25% or 30%? Why not
just open it all up? You only talk about $7 billion.
Let's talk about $70 billion pouring pouring into the
Why are you so modest, having painted this great
picture of 21% to 30%? And, Bill, you're only up to
25%. What about these countries like Australia? Why
wouldn't they have, if this is such a great idea—and
I'm not debating it isn't, it's clear from these
figures—more money in the foreign component?
Mr. Tom Hockin: Those are very good points.
I'll tell you what happened in Britain:
when they lifted the
rule entirely it topped out at 30%. The British
investment managers understand the British economy
quite well. So 70% of the investments remained in
Britain. I think the same sort of phenomena happened
I would suggest that in Canada if we just got rid of
the rule entirely it would probably top out at 30%,
because Canadians just know the Canadian market so
well. They know the Canadian equity market and bond
markets so well that it would probably not go much
above 30%. I would argue that there's a lot of money
wasted just policing this darn thing in pension plans
and RRSPs, with the Department of National Revenue and
so on. It would be nice just to do away with the
I don't know why people do not invest more. There are
some countries where the economies are so small, like
Ireland and Denmark, where in fact they would have a
proclivity to invest more than 30% outside of their own
country, but Canada has a pretty robust and diversified
stock market, and I would see that if there is no rule
at all it would probably top out at 30% or 32%.
That's just because of the knowledge about Canadian
markets in Canada. That is kind of an irrational
answer, but I think, sociologically, it is really why
it would work that way.
Mr. Nelson Riis: You make the case in terms of the
popularity of RRSPs, and yet when you look
at the amount of money a low-income earner would have into
an RRSP, while he might be a participant, it is a
woefully small amount of money. This means that because
these are tax deductions, you have, if you like, the
low-income working Canadian paying a pretty fair chunk
in terms of the tax cost of this, and so on, and yet
not participating in this as a savings vehicle.
I notice that countries like Norway do not have any
foreign investment as part of their program, and we
recognize that they probably have a different view. For
Canadians at the low-income level, who perhaps are
putting no money into an RRSP or so very little, would
this not be unfair to them to increase the ceilings, as
David suggested, as well as perhaps just increasing the
ceilings to make it more attractive to some people
while other people are paying for it and yet are
receiving little if any benefit? How do you respond to
Mr. Tom Hockin: There is a myth out there that
RRSPs are really a vehicle for the rich, but in fact if you
look at Statistics Canada's reports for 1995, that is
not the case at all.
Mr. Nelson Riis: What percentage of people are at
that upper end right now? It must be 2% or 3%, if that.
Mr. Tom Hockin: Eighty thousand dollars or more
total income makes up 18% of the tax filers....
Mr. Nelson Riis: We were told in a previous
hearing that less than 2% of people are presently
contributing up to the maximum level.
Mr. Tom Hockin: That's probably true.
Mr. Nelson Riis: So you make the case that this
needs to be lifted. As long as only 1% of the Canadian
population who are tax filers are pressuring that upper
limit, is this really a priority?
Mr. Tom Hockin: Of the 5.2 million Canadians who
have an RRSP, 60% of them earn $40,000 or less.
Mr. Nelson Riis: Tom, you know
how many tax filers there are. We are talking 16
million. You know from your previous life that even
this is a small number.
David, I cannot get too
enthusiastic about that upper limit when less that 2% of
the people using RRSPs are in that category now.
Mr. David Thibaudeau: I think that sometimes
when we look at that, we look at it as if someone at
the high end can take advantage of it and someone else
cannot. If you look at lower incomes, and if you look
at the plans that are in place today for lower incomes,
they can probably, without doing a whole lot in terms of
RRSPs or anything else, achieve somewhere near
that 70% of income target when they reach retirement in
terms of their income before they retire. People in
the higher income bracket are not going to get anywhere
near that. That is one of the reasons.
Mr. Nelson Riis: Yes. Thank you.
The Chairman: Mr. Jones.
Mr. Jim Jones (Markham, PC): Thank you, Mr.
First of all, thank you all for your presentations.
They were excellent.
Do you have any data on the number of people that are
participating in pension plans other than the Canada
Pension Plan? I have heard through this hearing that it
is quite low.
The other one is, Mr. Daniels, I didn't understand
what you meant when you said that 600,000 people have
little or no attachment to the employment industry.
The third question I have is what happens if we do not
increase to the 30% foreign content? It seems like a
lot of Canadians are doing a lot of savings these days
and that we are restricting their income potential in
their golden years. Also, I think there would be a lot of
money in Canada looking for places to invest and
maybe not finding a home. So I would like to have your
comment on what happens if we don't do this.
Maybe the first two questions are to Mr. Daniels.
The Chairman: Mr. Daniels.
Mr. Mark Daniels: Well, I can take the second one.
I'm not sure I can answer the first one on actually
how many people participate in private pension plans in
A voice: Forty-five percent.
Mr. Mark Daniels: Forty-five, is it?
Mr. Jim Jones: Is that counting companies?
Mr. Mark Daniels: Yes, in the registered
pension plans. I think about three-quarters of those
plans are actually administered by the industry I
represent, but they are the small and medium-size
plans. They only represent about 20% of the assets
that are managed. The others, of course, fall into the
larger pension plans.
In terms of my numbers, Mr. Jones, I was simply trying
to explain that of the 3.5 million people, the 12% of
Canadians who don't have supplementary benefits, in the
three groups they fall into, the majority of them are
people who work in small workplaces where there could
be such benefits but for some reason the employer
doesn't provide them. Then there are the
unincorporated self-employed who don't have the tax
advantage of being able to use them. That left about
600,000 people who turned out to not have an attachment
to the workforce. They'd
probably be young people before their first job, out of
college, they may not be still hanging onto their
parents' group coverage, and so forth.
That group represents about 600,000. What I simply meant
there is that since they don't have any employment
connection there's not much point in trying to catch
them up in the net. Yet they're not in the welfare
net, you see; they haven't yet been picked up by...and
probably won't be. This is not to say they're poor;
they just don't yet have a workplace attachment. That was all.
The Chairman: Mr. Hockin.
Mr. Tom Hockin: On the question of what would
happen if there is no change in the foreign property
rule, I can make two predictions.
First of all, this rule will be increasingly
circumvented by portfolio managers through the use of
derivatives. This is very, very sad, because it
means derivatives are expensive to manufacture and
to produce, so it takes a quarter or half a
percent off your earnings when you have to have a
derivative. Again, the average Canadian doesn't
understand derivatives and his or her mutual fund then
is less transparent, less easy to understand. That's
the first consequence. And it's already starting.
The second is that increasing amounts of capital are going
to be coming into the market, and we're in a situation
where institutional investors can own large proportions
of the outstanding shares of small to midsize Canadian
companies. There are two consequences to this. First,
we could further disadvantage small investors
who are already fighting for equal advantage in the
stock market, because the stock market is dominated by
institutional players. Second, there would be increasing
economic power of institutional investors in our
economy. It seems to me that if you let the foreign
property rule expand a bit, you have more
places for those big institutional investors to go and
the small investor has a better chance and the market
has more liquidity and everything else.
The Chairman: Mr. Koskie.
Mr. Raymond Koskie (Chair, Government Industry
Relations Committee, Multi-Employer Benefit
Plan Council of Canada): Thank you very much, Mr.
Chairman and gentlemen.
From MEBCO's point of view, I think Mr. Riis indicated
or somebody indicated that less than 2% of tax filers
are contributing up to their maximum. This would be
both in RRSPs and registered pension plans. I
think that is really the nub of the problem, because
the middle-income and lower-income people are the people who
can least afford to contribute more to their retirement
plans, notwithstanding the 100% deduction
from taxable income. That's why MEBCO has recommended
that there be a further tax incentive to get people to
contribute additional money. Now that
we've hopefully dealt with the deficit, the time
has come to look at some new tax measures to alleviate
this very serious problem.
We are in favour of increasing the foreign limit.
However, that doesn't help a lot for those people in the middle and
lower income groups who simply don't have enough
disposable income to pay more money into their pension
I don't know of an incentive other than the tax credit
we propose. For example,
every additional dollar contributed into a pension
plan over and above what they contributed the
previous year would only cost them fifty cents. You
need that kind of incentive.
I mean, the government has been offloading
the public system. The problems we have with the
CPP and the problems with the seniors, these affect
middle-income and lower-income people the most, so they are
already going to receive less in retirement. But
there's no counterbalance. How do these people help
themselves pay more money into the plans to make up for
the loss of retirement income that will flow from the
seniors benefit if it is passed? There are not enough
incentives out there, and it is for that reason we
have asked the government to consider the tax credit.
We point that out in our submission on page 26.
I think the other problem is with
RRSPs. While many do contribute to RRSPs,
they don't contribute to the maximum. I think there has
to be a further incentive created by the government
for employers to establish
pension plans, because I think it's acknowledged that
the return from a pension plan, whether it be a
multi-employer plan or a single-employer plan, is
far greater and less costly in the long run than you
would have in an RRSP.
Therefore, in order to encourage more employers to
establish plans, in our submission we have recommended,
starting at page 28, that the government provide
incentives for this by establishing what we call an
administration cost offset for registered pension plans.
The government has acknowledged that there is
huge cost in setting up these plans in the first place.
So how do we provide an incentive? The returns are
greater than RRSPs, or potentially greater than RRSPs,
so we have to provide an incentive. I think
that now is the time for the government to give serious
consideration to it.
The Chairman: Thank you, Mr. Koskie.
We will move
to Mr. Szabo, followed by Mr. Pillitteri.
Mr. Paul Szabo (Mississauga South, Lib.): Thank
you, Mr. Chairman.
I thank you gentlemen for the
interventions. It looks like we're talking
about RRSPs and things like that, so we might as well
talk some more.
Last night we were told that
taxpayers who made more than $75,000 a year
represented only about 5% of income earners. As you
know, $75,000 is the annual income you have to earn to
be able to put the limit—being $13,500—into an RRSP.
When you consider that we're talking about so few
Canadians, I wonder whether it really is a
priority or as high a priority as you might think. I
want to have your opinion, because
it is controversial, on whether you value fairness and
equity within our tax system as much as you value
incentives or opportunity to invest. If you do, then
do you not think it would be appropriate to shift
the RRSP deduction and make it into a credit so that
each and every Canadian who puts money into the RRSP
system would get the same taxpayer underwriting or
subsidy that every other taxpayer would get, regardless
of their level of income?
An example would be a
taxpayer making $35,000 a year who puts $5,000 into an
RRSP gets a tax refund of about—let's see, I did a
quick calculation—$2,650, more than 50% back.
Someone making $25,000 a year who puts $5,000 in would
only get a tax refund of $1,800. That means that the
lower-income Canadian gets $800 less back as a tax
refund than a higher-income-earning Canadian.
The fairness and equity
question doesn't seem to have been addressed. I
suggest that it probably needs to be addressed before
$75,000-and-over income earners get a further tax
The Chairman: Who would like to answer that
question? Mr. Thibaudeau.
Mr. David Thibaudeau: I'll attempt to wander into
that controversial world.
A couple of things
come to mind as I understand your thought process—I
think I do. One thing is equity; the other is, what are
you driving here?
If we are going to create incentives
for people at the higher end of the income area,
which also can be many people who can drive your
country in a competitive world tomorrow, I think we
have to have a way for them to get closer to
attaining a similar lifestyle.
Anywhere near that 70% is pretty far out, no matter what
you do. When they retire, they should have the ability to get
there with some form of tax assistance.
So, on the point
of fairness, I think there's a fairness there as it
relates to the country and its ability to compete.
If we start giving out tax credits, the other side is
how you are going to get
there if you're a person who has to save twice as much
because of your tax level, as you suggested before, in
order to get there. In other words, I'm having my
interest, my earnings, taxed, and I'm having the dollar
that I need to save taxed. So I've got half as much to
work with and I'm returning half as much if I'm not
getting tax assistance.
Mr. Paul Szabo: Before we leave that point, you
also know very well that when you purchase an RRSP you
can also purchase a spousal, which effectively in some
cases would allow you to split income, and effectively,
as a high-income earner, a high marginal tax rate
taxpayer, you can actually earn a windfall on rate
because you got the deduction at your highest marginal
rate, but because you spit or because you structured a
RRIF to stream it out slowly enough that you drop to a
lower rate, you could actually achieve a windfall
in rate as well as the deferral benefits, which are not
available to the lowest-income-earning Canadians
because they put it in at the low rate and take it out
at the low rate.
Is that true?
Mr. Mark Daniels: Like
Mr. Thibaudeau, obviously one wanders into this
swamp with real care.
I just want to say that the
equity and fairness issue here is a very
tricky one, but there's a real arithmetic trick in
what you've just done because the reason why those numbers
work out as they do is that we've got a highly
progressive income tax system. So if you want fairness
on one side you can't turn around and hit somebody over
the head with it on the other. So it's largely an
arithmetic anomaly, and I would just kind of duck out of
it in that way, sir.
Mr. Tom Hockin: I would just add the
foreign property rule point. You
said that fixing the foreign property rule a
little bit is not a high priority
compared with the basic inequities that
you mentioned. Logically, though, if you can see a flaw
in a program, you should fix it. That makes it a high
priority. In other words, if you would agree with me
that it's flawed to leave it at 20% and it probably should
go to 30%, then fix it if you can, especially if
it's not going to cost the fiscal framework any money.
Mr. Gary Pillitteri (Niagara Falls, Lib.): On
this foreign property rule to
increase the advantage that you're putting forward,
I hope you gentlemen can answer my question.
Today we've got trading blocks in North
America, NAFTA here, and a flow of businesses and
capital. Then you've got a European Common Market and a
flow of capital in there.
Specifically, Mr. Hockin, I heard you say
Ireland has no foreign rule on it, but you did not
mention countries such as Germany, France, or Italy, which
are more the backbone of the European Common Market.
Of the latter, I do know Italy, and I don't think any
capital could go out of the country. Would you like to
answer that question?
Mr. Tom Hockin: Just to make sure, could you
rephrase the question? Are you asking me why some
countries are still holding on
to a foreign property rule?
Mr. Gary Pillitteri: Yes. As I said, you did not
mention Germany, France, or Italy, and specifically
Italy. I don't think you can
take any money out of the country,
unless it has changed in the last couple of years.
That is the
largest component of those trading blocs, specifically
in the Common Market.
Mr. Tom Hockin: In this Ernst & Young study, in
table 5.1 on page 16, you'll see the regulatory
constraints on foreign investments by pension funds in
selected OECD countries. I don't find Italy or
You're right. In Germany there's a 4% limit on
foreign asset holdings. That speaks, I think we all
know, to the German psychology about safety, going back
to their memories of the 1920s and incipient inflation.
Mr. Gary Pillitteri: At least Germany has 4%.
Mr. Tom Hockin: Yes.
Mr. Gary Pillitteri: Italy doesn't let money out
of the country.
Mr. Tom Hockin: Are you suggesting that Italy does
not allow any?
Mr. Gary Pillitteri: Yes.
Mr. Tom Hockin: Anyway, here is a rundown of what
countries allow and don't allow.
Should we follow
the Italian example?
Mr. Gary Pillitteri: By no means.
I just wondered if it had any
effect on those countries, since they make so much
of a contribution within their own economies that they
want to restrain their flow of capital outside the country.
The Chairman: Mr. Pillitteri and Mr. Hockin, on
page 17 they do address the France and Italy issue. They
are apparently not included in this analysis because
they have virtually no assets in privately funded
It's your fifth paragraph.
It's just a
point of information.
Mr. Lunn, do you have another question?
Mr. Gary Lunn: Thank you, Mr. Chairman.
I note from Mr. Hockin's submission that he believes
removing the foreign property rule would create more
jobs, I take it because you're putting more
wealth or more money in the hands of the consumers
and they are going to spend it.
I put my question out to anyone else on the panel who
wishes to answer this. Is there anything proactive
this government or this committee can do with our
taxation system or through prudent fiscal management
policies to stimulate the job economy?
The Chairman: Mr. Daniels.
Mr. Mark Daniels: I'm sure we all have ideas
about that. The focus we have taken
is really to focus on the macro-context of this
debate. What has been accomplished by the government
in the last four years is nothing short of astounding.
True, there was some luck in it as well, but it
has dramatically reversed the fortunes. The
main message I try to put across is to say
let's not sacrifice any of that; that's the biggest
growth generator and the biggest employment
generator we have.
As I have listened to this conversation, everybody up
here is either in the savings accumulation business, in
part, by providing products, or they are selling the
products. If you listen to every one of us, it seems to
me what we're saying is that the capacity of the
publicly funded part of that safety net is in question
today more than it was some years ago.
We are all looking for ways to better meet
the demand for new product.
We recognize that there's going to have
to be new product. It's an astounding record
that the mutual funds industry has turned out
in the last couple of years. Those growth
figures are amazing. Frankly, I think they're in
response to the very kind of thing we're all trying to
hedge against around this table.
Most of that, incidentally, is providing capital
into the system. That capital creates jobs, simply.
Whether it flows outside the country or not
doesn't mean it's leaking out and doesn't
provide any benefit to Canadians,
although it's somewhat more roundabout.
So that's the way I would answer it—the
macro-context of the debate.
I don't think it would be very helpful to you, sir,
if I were dropping ideas out, one side or the other,
that might benefit my clients and not Tom's,
or something like that.
The Chairman: Thank you very much, Mr. Daniels.
A final question for Mr. Szabo.
Mr. Paul Szabo: I want to deal with this issue
we started off with, that 88% of Canadians
are directly or indirectly covered by plans. Because the
employers get the deduction but there's no taxable
benefit—yet—we know there is a disadvantage
or an inequity to those who aren't covered, the other 12%.
Given that there is this inequity, would you, for
instance, support other incentives or tax initiatives
that would assist in some way those 12%—for instance,
a reduction or the elimination of the deductible
on medical expenses on the income tax form,
which, as you know, now is the lower of 3%
of net income and some ceiling?
Mr. Mark Daniels: Mr. Szabo, I'm not sure
treating the deductible in that fashion
would accomplish necessarily what you want it to do.
I think what you'd be better doing is what I suggested.
Only 1 million of those 3.5 million—that's people
and their dependants—are going
to be able to be affected by any tax changes.
I think the way in which you get at them is to allow them
to use money they spend on supplementary health care products
in the same way you and I do; it just comes off
income before taxes. So all you would do
is give them an appropriate deduction.
I think that would be the most parallel, simplest,
and easiest thing to do.
My recollection, Mr. Chairman, is that your
predecessor and his colleagues in this committee
priced that out at one time. I think the total cost
of the thing for the entire economy was less
than $30 million. This is not a heavy-duty expenditure
as tax expenditures go. It's a relatively minor expenditure.
The rest of that burden, frankly, falls on us.
We haven't reached down and gotten the rest of those
people, as I've said. We are looking at structuring
our plans to fit smaller employee groups than we were
targeting in the past. That's why I referred to
some of the work we're doing with the Canadian
Federation of Independent Business. We want to know
who these people are and how we get to them so that
we can walk back to these councils and say, well,
now it looks as though we have another $1 million
under the wing.
The Chairman: Thank you, Mr. Daniels.
Mr. William Anderson: If I may, I would just add
that a number of the people we're talking about
in this inequality are people who are self-employed,
who have tax incentives other than the guy out
there working. It's much like, say, a member of
Parliament as compared with the average guy
with some of the tax incentives. So I'm not
so sure there's an inequity there.
If I could, please, I would touch on the fact
that you smiled when you stated “yet” as far as
benefits being taxed. I hope this government
takes a strong look at any initiative they have
in the future to tax benefits on the Canadian people,
because it's going to come back to haunt you
in a big way.
The Chairman: Thank you.
Mr. Riis, a final question.
Mr. Nelson Riis: Thank you, Mr. Chairman.
Gentlemen, I'm not sure who I'm aiming this question
On the discussion today about the RRSPs and
ceilings and the foreign levels and so on and the
comments, Bill, that you made regarding the seniors
benefit package and your recommendations and concerns
there, is there not in your business a concern about
these two programs, that as the clawback provisions
kick in under the seniors benefit
a point will come at which there's going to be less
enthusiasm of people to invest in RSPs per se? They're
going to say, well, what's the point? Why don't I pay
down mortgages or do other kinds of things with my
money? We've heard that from people. You folks
seem like a good group to get a reaction from along
Mr. David Thibaudeau: One of the
things that seem to have struck us on the seniors
benefit is really a technical one that has to do with
how it's administered and the impact it has that way in
terms of tax to the individual. Through working with
people in Revenue and Finance and so on, we're trying
to work out a way in which that would come out. It would still
be the same idea, but the impact of the tax wouldn't be
It's a real concern when it affects someone.... I
believe someone mentioned sort of the medium income
level, where it really jacks the effective tax rate or
the marginal rate jumping from one level to the other.
I don't think that in the higher income area it's
as big a concern when it relates to a seniors benefit.
Mr. Tom Hockin: Mr. Chairman, I defer to Malcolm
Hamilton of William M. Mercer Ltd. on this subject.
I don't know if he has appeared before your
committee, but he has identified some income brackets
wherein it doesn't make much sense to save for your
retirement because of the way the seniors benefit
works. I can't remember what the brackets were, but I
think around $30,000 to $40,000 was one bracket, and
then there's another bracket of people over $50,000
who, just before they retire, might as well not be saving any
more. I would like him to defend his brackets
before this committee. I don't think I can do it.
His report concerns a number of our members.
Mr. Raymond Koskie: In our
brief we have referred to Malcolm Hamilton's analysis of
this, and we have referred to Paul McCrossan's analysis of
the seniors benefit. Both of these gentlemen, as
you know, are highly acknowledged and reputable
actuaries. What they have predicted is that
people are going to retire early, and of course that
doesn't help the system, because if they retire early
there's less money going into their retirement
At tab A of our brief we have given you
examples that Paul McCrossan has prepared showing
middle-income people with different incomes or equal
incomes to show the change in the after-tax income
resulting from the seniors benefit. So, for example,
in chart 7 of appendix A you have
middle-income couples with equal incomes. The
change as a result of the seniors benefit is that the
first spouse suffers a loss of over $3,000, and
similarly with the second spouse, for a total of
To my knowledge, nobody from the Department of Finance
has come out with any figures to
contradict what McCrossan has said here.
If we're taking money out of the system, that goes against
the government's policy, with all due respect, to
encourage people to save more for their retirement.
The Chairman: Mr. Koskie, Mr.
Thibaudeau, Mr. Hockin, Mr. Daniels, Mr. Anderson, and Mr.
O'Grady, on behalf of the finance committee, I'd like
to thank you very much. It has been a very interesting
round table. You've provided us with valuable
information, which I'm sure will be helpful
as we write the report and recommendations to the
Minister of Finance.
The meeting is adjourned.