2016 Ontario Budget SubmissionRelease Date: 01/29/2016 Staff Reference: Noeline Simon
January 29, 2016
Honourable Charles Sousa
Minister of Finance
c/o Budget Secretariat
Frost Building North, 3rd Floor
95 Grosvenor Street
Toronto, ON M7A 1Z1
Please find enclosed a submission from the Canadian Life and Health Insurance Association (CLHIA) providing input to your deliberations on the forthcoming provincial Budget.
Established in 1894, CLHIA represents life and health insurers accounting for 99% of the business in Canada. With 67 companies headquartered in the province, including two ranked in the top 15 in the world, the life and health insurance industry is a major contributor to Ontario’s economy. The industry directly employs over 69,000 Ontarians and has investments of more than $265 billion in the province. The industry pays over $40 billion in benefits each year to Ontarians through life and health insurance products including annuities, RRSPs, disability insurance and supplementary health plans. The industry pays $1 billion in taxes in Ontario, and in addition collects almost $1.4 billion in retail sales tax on workplace life and health insurance products, for a total of $2.4 billion in taxes on the industry and its products.
The life and health insurance industry supports the Government's commitment to eliminate the deficit by 2017-18 and drive change by "making the province more competitive and productive while enhancing the lives of everyone who calls Ontario home." In this submission, we recommend specific initiatives that also align with Ontario's core priorities as follows:
1. Strengthening retirement security for all Ontarians:
- · defer implementation of the Ontario Retirement Pension Plan by at least one year to address the significant uncertainties that remain with respect to plan design, administration and investment functions, and permit other governments to more fully assess possible enhancement of the Canada Pension Plan; and
· immediately adopt regulations to facilitate Pooled Registered Pension Plans to enhance retirement income security, particularly among self-employed individuals who are not eligible to participate in the Ontario Retirement Pension Plan, and to ensure consistent, nation-wide retirement savings opportunities for employees of businesses with operations in Ontario and other provinces.
3. Supporting a dynamic and innovative business climate:
- · refrain from increasing the existing retail sales tax and premium tax on life, health and disability insurance premiums and, as fiscal circumstances permit, reduce and eventually eliminate these misdirected taxes; and
· phase out Ontario's special capital tax on life and health insurers;
- · expand the use of long-term private financing in funding capital projects through Private Public Partnerships (P3s); and
· issue ultra-long bonds.
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