Thank you very much, Mr. Chair.
We are pleased to have the opportunity to appear before the committee today. My name is Katie Walmsley. I am president of the Investment Counsel Association of Canada.
I am accompanied by Barb Lockhart, who is senior vice-president for finance and administration with McLean Budden Limited and who serves as past chair on the ICAC board of directors.
The Investment Counsel Association of Canada is composed of firms from across Canada who manage more than $700 billion in assets for Canadians.
In our submission we focused on four specific recommendations that are tax-related, which, if all implemented, would help Canadians' retirement savings. Today my comments are going to focus on the most critical of the four issues, GST and HST.
Whether an individual lives in Alberta, Manitoba, or Nunavut, as of July 1, 2010, most Canadians with any savings in a mutual fund, a company pension plan, or a personal portfolio are likely paying HST. Canadians have been paying GST to manage their savings since 1991. The cost of managing those savings went up on July 1.
We don't think this is right; nor is it consistent with the other stated priorities of this government.
We don't think this is right.
We would like to highlight, however, the fact that one arm of the government is addressing the retirement savings issue while the tax policy arm of the government has increased the cost of saving for retirement.
Many of the retirement savings solutions that are being contemplated by this government are very costly to implement. As part of the solutions being considered, we urge you to consider exempting GST and HST for services that help Canadians save for their future and save in a manner that does not make them dependent on governments in the future.
Why do we urge this? At a high level, GST and HST are both a consumption tax. We fundamentally disagree with the fact that Canadians are paying a tax to manage their savings. They are not consuming; they are trying to build their savings such that they have adequate savings for their retirement years.
We don't disagree with GST and HST being paid at the time of consumption. We respect the government's direction to harmonize tax. But GST and HST are both a consumption tax and should come at the time of consumption, not while Canadians are trying to manage their savings.
In the EU, as an example, a variety of forms of investment management exemptions exist for this very reason. We strongly recommend that the government revisit the new tax on retirement savings.
I will now turn it over to Barb Lockhart to provide three specific examples of impacts on Canadians' retirement savings.