Finance Committee on April 28th, 2009

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you.

Mr. Bernier.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you, Mr. Chair.

I would like to take this opportunity to thank our witnesses for appearing before us today. Your contribution will be very helpful to our work. You have provided us with some very interesting information. So thanks to all of you.

I would like to give Ms. George the floor.

At the beginning of your remarks, you said that you might have something else to say if you had more time. So I will give you two or three minutes.

[Shirley-Ann George]

Thank you very much. I appreciate the opportunity.

I did speak briefly about the opportunity that exists for private insurance companies. As we all know, Canada is very fortunate to have some of the best in the world to provide the pension gap that was mentioned earlier.

I would also like to add that in this current economic downturn, we also have Canadians who have defined contribution pensions and registered retirement savings plans, or who draw income from retirement income funds who have also seen their savings decline sharply in lockstep with the equity market and long-term interest rates. If a DB plan falls short of its obligations, the plan sponsor must fill the gap. But if a DC plan or RRSP suffers major losses, individuals do not have the flexibility to make up those losses. They are, for example, limited as to how much they can contribute annually.

To address this discrepancy and provide all Canadians with the same opportunity to save for retirement, the federal government could increase the tax-deferred contribution limits and allow DC and RRSP holders to save longer by delaying the age at which they must stop making contributions and start drawing down funds. This, as we know, is currently age 71. The government could also expand the types of investments one can hold in these plans and reduce the amount an individual is required by law to withdraw--the minimum percentage--from their RRIF plan each year.

We think that even though not all Canadians are financially able to reach their maximum annual limit, for those who are, these changes would be important in helping ensure their financial stability upon retirement.

Thank you for this opportunity.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you. I really appreciate it.

I have another question. As you know, the federal government only regulates about 7% of privately funded plans in Canada.

The rest comes under provincial jurisdiction.

Do you think there should be better coordination or cooperation on the part of regulatory authorities with respect to private pension plans in Canada? Do you think the federal government should play a more active or less active role with the provinces in this regard?

[Shirley-Ann George]

This is just one more example of how the fact of our 13 jurisdictions in Canada stands in the road of progress. We would strongly recommend that the federal and provincial governments work more closely together. The regulatory regimes have to be closely related, and it would be constructive for the federal government to work to try to find a way to coordinate this between the provinces and the territories.

Just as an example, one of the major obstacles that was cited by the private insurance companies, when I asked them why they weren't filling the gap that has been brought forward today, was that with 13 different plans, administratively, it's very costly. So anything this government can do to try to coordinate that and reduce those costs would be greatly helpful.

Thank you.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you. I appreciate it.

Thank you very much, et merci, monsieur le président.

[The Chair, Conservative, James Rajotte]

Merci.

I want to thank all the witnesses for your presentations here today and your responses to our questions. If you have anything further to submit, please do so through the clerk. Thank you all for being here.

Colleagues, we'll see you this afternoon, please.

The committee stands adjourned.