The Canadian Association of Insurance and Financial Advisors and the Conference for Advanced Life Underwriting today urged the federal government to increase RRSP contribution limits and to implement the scheduled reductions in corporate tax rates more quickly than proposed in the 2000 budget.

CAIFA’s recommendations, contained within the joint CAIFA and CALU 2002 pre-budget submission, also call for an increase to the RPP defined benefit limit and a continued strong emphasis on debt reduction.

“To ensure that Canada remains a major player in the new economy and that clients of CAIFA’s members continue to enjoy the best quality of life and standard of living possible, we must significantly reduce our $542 billion debt,” said president and CEO David Thibaudeau.

“An increase to RRSP contributions limits will also help ensure that Canadians continue to enjoy that excellent standard of living well into their retirement years,” he added.

In its joint pre-budget submission with CALU, a conference of CAIFA, CAIFA recommends that the government reconsider reducing the gap between Canadian and U.S. corporate taxes in high growth areas, such as services. The submission also notes that the government should implement the scheduled changes quickly.

“The five-year plan to reduce corporate tax rates and make Canada’s tax system more competitive, set out in the 2000 federal budget, simply doesn’t go far enough or fast enough,” said Thibaudeau. “In order for Canada to be competitive in the New Economy, Canadian tax rates need to be comparable to those in the United States.”

CAIFA and CALU are recommending that the RRSP contribution limit be increased to $27,000 and that RPP defined benefit limit be immediately increased to $3,000 per year of service, from the current limit of $1,722.

They recommend that the government complete the full indexation of the tax system by immediately increasing the RRSP contribution limits and the RPP defined benefit limits and indexing future contribution limits, rather than waiting until the scheduled increases in 2004.

They also suggest that recent gains from debt reduction should go to increased health care spending. Over the past four years the government has retired more than $33 billion in debt. This amounts to a saving of almost $2 billion a year in interest payments.

“These are funds that could be reallocated to health care,” Thibaudeau noted. “The successes achieved in reducing the debt over the past four years are commendable, but more needs to be done to ensure that funds are available to meet the growing health care needs of Canada’s aging population.”