ICAC Urges Provinces to Get Onside Federal Budget’s Call for National Securities Regulator

(March 20, 2007) – Canada’s investment counsellors and portfolio managers are giving the new federal budget high marks for promoting the need for a single national securities’ regulator. However, the Investment Counsel Association of Canada (ICAC) is also warning that the provinces need to get on board to ensure Canadian capital market competitiveness.

“Our organization has long been advocating the need for a national securities’ regulator, so we are very supportive of the messages delivered in the budget on this important issue,” said Katie Walmsley, President of the ICAC. “At the same time, we cannot declare victory because there is still much to do to and we are calling on all provincial finance ministers to fall in line and make a national regulator a reality. We strongly believe that Canada can gain competitive advantage if these budget measures are implemented. Since Ontario is up first with its budget on Thursday, we are urging the provincial government to send the right signals.”

ICAC Commends Budget’s Financial Literacy Initiative

Canada’s investment counsellors are also pleased with the budget’s plan to promote financial literacy, particularly for young Canadians.

“The myriad of product and service options in the financial marketplace is complex and daunting to many investors and the ICAC applauds the government’s intention to improve  this situation. This budget announcement is very timely since the ICAC itself is introducing a number of initiatives over the next year to further support investor education.

Said Don Cranston, Chairman of the ICAC: “Canada’s investment counsellors salute the budget’s direction towards streamlining some of the inefficiencies in Canada’s capital markets. The drive towards a single securities regulator, more principles-based market regulation, and free trade in securities with the United States and other countries, and improved Canadian financial literacy are all positive signals of this government’s support of freer flowing capital markets. “

ICAC Comments On Other Budget Provisions

Canada’s investment counsellors are disappointed that that the budget did not include a long-awaited capital gains deferral that would have eliminated a major inefficiency in the financial markets.

“This is disappointing to us as investment counsellors,” said Mr. Cranston, “but we remain convinced that a reduction or deferral in capital gains is being saved for a future budget.”

The ICAC is, however, delighted to see:

  • The elimination of the capital gains tax for charitable donations of publicly listed securities to private foundations
  • A proposed increase in the age limit (to 71 from 69) for converting an RRSP to a RRIF, which provides a “strong incentive for older Canadians to work and save”
  • An increase in the lifetime capital gains exemption for small business owners to $750,000 from $500,000
  • Changes to Registered Education Savings Plans (RESPs) to make them more attractive

About ICAC

The Investment Counsel Association of Canada  (ICAC) is the representative organization for investment counsel and portfolio managers in Canada.  Our members are from across Canada and are comprised of both large firms managing primarily institutional portfolios and smaller firms managing portfolios for high net worth individuals. ICAC was established in 1952 and its current members are responsible for managing in excess of over $500 billion of client assets.

The overall mission of the Association is to advocate the highest standards of unbiased portfolio management in the interest of investors served by Members.  Member firms are only in the business of managing investments for clients in keeping with each client’s needs, objectives and risk.

Katie Walmsley,
Investment Counsel Association of Canada
Toronto, Ontario