2015 Federal BudgetRelease Date: 08/05/2014 Staff Reference: Noeline Simon
The Canadian Life and Health Insurance Association (the "CLHIA") commends the Government for being on target to achieve its goal of a balanced budget for the current fiscal year. In addition, we support the Government's key themes for the upcoming 2015 budget, especially supporting and helping vulnerable Canadian families, ensuring prosperous and secure communities through support for modern infrastructure and improving Canada's taxation and regulatory regimes.
The Canadian life and health insurance industry plays a key role in Canada's economy. It protects over 75% of Canadians through a wide variety of life and health insurance and annuity products. The industry paid over $75 billion in benefits in 2013 or almost $1.5 billion a week, with over 90% paid to living policyholders. Over 150,000 Canadians earn some or all of their income directly from the industry (as employees or independent agents). The industry is a major investor in Canada with more than $645 billion in assets, over 90% of which comprise long-term investments, an important source of long-term capital for the federal and provincial governments and businesses. Canada's life insurers also have a longstanding history and track record of being internationally competitive, with almost $56 billion, or 40% of their worldwide premiums, coming from outside Canada.
In this submission, we recommend the following four initiatives that align with the Government's key themes for the 2015 budget:
- Supporting families and helping vulnerable Canadians by focusing on health, education and training by:
- 1. Incenting and encouraging Canadians to take responsibility for their long-term care needs
- Ensuring prosperous and secure communities, including through support for infrastructure, through:
- 2. Increased use of public-private partnerships
3. Setting a benchmark volume for ultra-long bonds
- Improving Canada's taxation and regulatory regimes by:
- 4. Reducing or eliminating capital tax on financial institutions