In Budget 2024, the Department of Finance invited stakeholders to provide suggestions by July 15, 2024, on how the qualified investment rules could be modernized to improve the clarity and coherence of Canada's registered plans regime.
"Qualified investments" refer broadly to investment vehicles eligible to be sheltered within a registered plan (e.g., RRSPs, TFSAs, etc.). However, the qualified investment rules for different plans, as well as the variety of registered plans, have expanded over the years, with slightly differing rules resulting in complexity, inconsistency and increased compliance-related costs.
Carl Hinzmann, a tax partner in Gowling WLG's Toronto office, shared his insights with Investment Executive. "It's a useful and probably much needed exercise," said Carl. "If they can get the [qualified investments definitions] down to a singular definition, I think it would be significantly easier for the investment community that's trying to provide advice and develop products."
Acknowledging that the rules have undergone numerous updates since they were introduced in 1966, the consultation invitation prompted stakeholders to consider a number of questions, including:
- Whether the conditions that certain pooled investment products must meet to be a qualified investment are appropriate, including the ongoing value of maintaining a formal registration process for registered investments.
- Whether and how qualified investment rules could promote an increase in Canadian-based investments.
- Whether crypto-backed assets are appropriate as qualified investments.
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Read our full Budget 2024 tax analysis here.
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