Submissions to Government

PMAC 2023 Pre-budget Submission to Department of Finance Canada

Executive Summary

The issue

Many Canadian employers offer Defined Contribution (DC) pension plans and other savings programs to their employees; these plans are an effective means of encouraging them to save for retirement. According to Statistics Canada, membership in employer sponsored DC pension plans continues to rise, accounting for approximately 20% of all pension plan membership. The Canadian DC pension plan market is $300b CAD.

These pension plans are subject to unfavourable tax treatment that results in unexpected double taxation and higher investment costs for over two million Canadians. Other retirement savings vehicles, including Defined Benefit (DB) pension plans and retail mutual funds, are not subject to this treatment.

Proposed solution

We are recommending an amendment to the Income Tax Act (Act) that would allow these pooled investment funds to merge on a tax-deferred basis and to invest internationally without restriction to the Designated Stock Exchange (DSE) list, subject to the condition that the majority of the pooled fund unitholders are DC plans and other registered plans as defined in the Act.

This solution will not involve any budget expenditure in Budget 2023.


Through a simple amendment to the Act, the government has the opportunity to encourage Canadians to save for retirement and help companies provide cost-effective savings vehicles for their employees. At a time when Canadians are experiencing the highest interest and inflation rates, the government should enact measures that strengthen – not weaken – the adequacy of Canadians’ retirement savings. Our solution would help accomplish this goal.

Click here to view the full submission.