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The Investment Industry Association of Canada (IIAC) is calling on the federal government to provide investors with some relief on their 2020 income taxes.

In a letter to federal Finance Minister Bill Morneau, the industry trade group is requesting two changes to the treatment of capital losses for the 2020 tax year.

“These proposed tax measures would cushion retirement savings, bolster investor confidence and provide underlying stability to share prices,” the association stated in the letter.

Specifically, the IIAC called on the government to suspend the “superficial loss” rule for 2020, allowing investors to “sell a security at a loss in a non-registered account, benefit from the capital loss, and then repurchase the identical security in a registered account.”

The IIAC added: “This would enable investors to reposition assets and rebuild their retirement savings plans. For Canadians who may need to sell investments to access cash, this would allow them to repurchase the investments in a RRSP or RRIF without being denied the capital loss which may result.”

The group also recommended that the government allow investors to use a portion of their capital losses in 2020 to offset income, instead of capital gains.

“The allowance to apply net capital losses against personal income should be limited to ensure it primarily helps average, ordinary Canadians,” it said.

For example, it suggested that the losses that could be used against income should be limited to $100,000, and that no more than 50% of taxable income can be offset in the current year.