2013 Ontario Budget SubmissionRelease Date: 02/28/2013 Staff Reference: Peggy McFarland
February 28, 2013
Honourable Charles Sousa
Minister of Finance
7th Floor, Frost Building South
7 Queen's Park Crescent
Toronto, ON M7A 1Y7
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 63 companies headquartered in the province, including two ranked in the top 20 in the world, the life and health insurance industry is a major contributor to Ontario’s economy. The industry directly employs over 65,000 Ontarians and has over $220 billion invested in the province. Last year, the industry paid over $32 billion in benefits to Ontarians through life and health insurance products including life insurance, annuities, RRSPs, disability insurance and supplementary health plans. The industry paid over $2 billion in taxes in Ontario in 2011.
The life and health insurance industry supports the Government's commitment to eliminate the deficit by 2017-18 and reduce the province's debt-to-GDP ratio. We applaud the province for the significant support it is providing to help grow Toronto's financial services sector, which is recognized as one of the top 10 financial centres in the world.
In this submission, we recommend that Ontario:
• enact measures to facilitate the provision of Pooled Registered Pension Plans (PRPPs) which are prudent, efficiently-managed, private pension plans, that would be available to Ontario workers, particularly within smaller businesses, and the self-employed, thus vastly improving access to a pension plan for Ontarians,
• resist any suggestions to increase the provincial Retail Sales Tax on insurance premiums, and, as fiscal circumstances permit, examine reduction and eventual elimination of the existing Retail Sales Tax and premium tax on life and health insurance premiums, thereby encouraging employers and individual Ontarians to maintain or expand life and health insurance protection for their employees and families,
• improve the fairness and competitiveness of Ontario's corporate tax system by:
- as fiscal circumstances permit, phasing out Ontario's capital tax on life and health insurers. In the meantime, this tax should be harmonized with the Federal Part VI capital tax to reduce compliance costs for both taxpayers and the government.
- working with the federal government and the other provinces to develop a system to allow loss transfers among corporate groups,
CLHIA appreciates the opportunity to contribute to Ontario’s pre-budget consultation process. If you or your staff require any further information on these matters, my colleagues and I are at your disposal.
(Original signed by)