Canadian Capitalist

Finance Minister Ralph Goodale will present his minority government’s budget on Feb. 23rd. CBC is reporting that some business groups are suggesting a major overhaul of retirement savings programs. Among the suggestions:

• Eliminating the current Foreign Property Rule, which restricts foreign investments to 30% of RRSP book value.
• Increasing RRSP contribution limits. Merely increasing the maximum contribution limit ($16,500 for 2005 for an income of $91,667 in 2004) is not enough. An increase in the contribution rate (from the current 18% of earned income) will help Canadians save more for retirement.
• Introducing Tax-prepaid Savings Plans (TPSP) to help lower income Canadians save for retirement.

Even if one of the above suggestions is implemented, it would be a major step forward. Ottawa is sitting on billions of dollars of surpluses and is looking to spend it all on the government’s favourite social programs. Putting some of those dollars back in the pockets of taxpayers would be a welcome step.

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