Issue
In the 2004 federal budget it was proposed that pension plans be limited in their investment in business income trusts to 1% of the pension fund in total and to 5% of any one income trust. These were discriminatory proposals which would only apply to pension plans in Canada.
Action to date
The federal proposal was not well received by the pension industry, with much opposition being voiced. On May 19, 2004, the ACPM sent a letter in this regard to the Minister of Finance objecting to the manner in which it was announced, and to the fact that no hard analysis was shared which showed the alleged tax "leakage". As a result of this strong opposition, the federal government announced a suspension of the proposal, pending a consultation period.
In November 2005, Finance Minister Goodale made a surprise announcement to increase the dividend tax credit, instead of imposing taxes on investments in income trusts or limiting such investments by pension funds. The ACPM applauded this announcement.