Evidence of meeting #44 for Finance in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was surplus.
A recording is available from Parliament.
Conservative
Mike Wallace Conservative Burlington, ON
Thank you, Chair, and thank you, presenters, for being here today.
I have just a couple of quick questions, and I'll start with you, Ian, on the savings piece.
I just want to be completely clear. Your members aren't allowed, in a sense, to present RRSPs.... This is being treated the same as an RRSP at present. Is that not correct?
President and Chief Executive Officer, Investment Industry Association of Canada
Yes, it is pretty much similar to an RRSP.
Conservative
Mike Wallace Conservative Burlington, ON
You haven't been able to make the change on the RRSP side of things, but you'd like to see it changed here. Is that correct?
President and Chief Executive Officer, Investment Industry Association of Canada
The point here on the administrative side is that there are some requirements, oddly, that are a little more complicated than for RRSPs. For example, it's not clear that there will be an annual reporting process in part, which will—
President and Chief Executive Officer, Investment Industry Association of Canada
As the RRSP has.
President and Chief Executive Officer, Investment Industry Association of Canada
Yes. What we're aiming at with those recommendations—and most of it is to synchronize it with the RRSP structures—is to reduce the administrative costs as much as possible.
Conservative
Mike Wallace Conservative Burlington, ON
Right, so technically it doesn't necessarily have to be legislation, as long as the regulations require that.
Director, Capital Markets, Investment Industry Association of Canada
There are two distinct points. Part of your question was about the trust structure, which is the one area in which we don't like to follow the RRSP and where we hope at some point the RRSP might change. Just to go back in history, I believe when the RRSPs were first set up, most individuals had a bank account. They didn't necessarily have a securities account. Therefore the structure was very much aligned with the old four pillars. Banks could issue deposits, insurance companies could issue annuities, trust companies—of which there aren't many around any more—could issue trust structures, and securities dealers weren't offering anything.
Now there are securities accounts, and well over one in two adult Canadians have securities accounts. They should be able to offer them without the cost of going through a third-party trust company to get the—
Conservative
Mike Wallace Conservative Burlington, ON
To make it happen. Okay.
Just quickly, I was interested in the words “upon immediate death”—
Director, Capital Markets, Investment Industry Association of Canada
Yes, that sounds bad, doesn't it?
Conservative
Mike Wallace Conservative Burlington, ON
Are you interpreting that to be as soon as the individual passes, that the money is owed that day, or are you saying it is frozen that day? I don't understand.
Director, Capital Markets, Investment Industry Association of Canada
Except in the case of it being able to be passed over to the successor, holder, beneficiary—and they would continue as if it were their own—the financial institutions, the intermediaries, would have to start tracking it immediately as if it had been converted into a taxable account. That would make it quite difficult, because often it's not until months afterward that you actually find out the holder has passed away, and your systems are not set up to sort of retroactively start tracking value.
Conservative
Mike Wallace Conservative Burlington, ON
Okay, I appreciate that.
Mr. Weir, I have a couple of questions for you.
I'm actually the chair of the steel caucus at Parliament, and I meet often with the steel industry. How do you communicate with your members of United Steelworkers who are actually steel workers? As a chief economist for that organization, can you give me the lines of communication between you and the rank and file? How does that work?
Economist, United Steelworkers
There would be two main lines of communication. The rank and file members would elect directors of the three United Steelworkers Union districts in Canada as well as the Canadian national director, to whom I report. That is one line of accountability. It's kind of analogous to the way in which a civil servant would be accountable to an elected minister in the Government of Canada.
The other line of communication would be the fact that I do a lot of collective bargaining support, so I meet very directly with our membership on a regular basis.
Conservative
Economist, United Steelworkers
I don't personally conduct surveys of the members, no.
Conservative
Mike Wallace Conservative Burlington, ON
As an organization, I know the steel companies are in the process of, let me say, discussing the issue of the environment with members of the environment ministry on how to meet their potential targets and are finding it very difficult. Have you discussed this issue of the environment and how it will affect your industry if we go to the regulations that are presently in front of the steel industries?
Has your organization taken a position on carbon taxes yet?
Economist, United Steelworkers
Our organization has a long-standing position of concern about the natural environment. We certainly supported the Kyoto accord from day one. We think it's very important to reduce greenhouse gas emissions, but of course we think that needs to be done in a way that isn't harmful to the livelihood of people who work in industries that currently emit greenhouse gases. I realize the time's limited, so I'll just say that it's certainly an important issue for us, and we're in the process of formulating our position on it.
Conservative
Liberal
John McKay Liberal Scarborough—Guildwood, ON
Thank you, Chair.
Mr. Russell, I understand your proposition that you want the TFSAs to look more like a bank account than a trust. If that's true, how will you be compensated? How will your people be compensated?
Director, Capital Markets, Investment Industry Association of Canada
It would be compensated just the same way that the securities account you may have already, presumably saving for your retirement, would be currently, but there would be one less cost behind it, which would be the cost paid to a third party, a trust company. Again, it's all aimed at trying to keep down the cost.
Liberal
John McKay Liberal Scarborough—Guildwood, ON
So you're looking for TFSAs in which there is activity in the account, where your people could make trades?
