The Portfolio Management Association of Canada (PMAC) represents over 300 investment management firm members that collectively manage $3 trillion in assets for pension plans, endowments, individual and group RSPs, and other investments across Canada.

We are writing to ask you to change the tax regulations for pooled funds that unintentionally treat millions of Canadian savers, including tens of thousands of Canadian retirees, unfairly every year. This will not involve any budget expenditure. All that is required is a small amendment to Regulation 4801 under the Income Tax Act (Canada) (the Act).

Why action is needed in Budget 2022
For tax purposes, pooled funds are not afforded the same benefits as mutual funds and segregated funds unless they have a minimum of 150 unitholders, allowing them to achieve Mutual Fund Trust (MFT) status. A simple amendment to Regulation 4801 creating a “look through” to the underlying investors would recognize that many of these pooled funds are indeed widely-held funds that should be afforded the same tax treatment as a MFT in order to achieve tax parity across investment funds.

Without action now, Canadians with retirement savings in these vehicles could be faced with surprise tax costs and will continue to be restricted from further diversifying their retirement investments internationally.

This issue is explained in further detail below and in the attachments to this letter.

Click here to view the full submission.