The Conservative Party of Canada is making investment management fees an election issue, pledging to provide more transparency if they form government after Sept. 20.
The Conservative platform released Monday said the party would require “more transparency for investment management fees so that seniors and savers don’t get ripped off. This will include requiring the banks to show investment returns net of fees.”
The pledge fell within the banking portion of a section dedicated to lower prices for consumers. Under leader Erin O’Toole, the Conservatives would also order the Competition Bureau to investigate banking fees and legislate open banking “so that Canadians can connect with fintech companies that can provide a better offer for banking services such as a mortgage, line of credit or credit card,” the 164-page document said.
Reports from financial industry regulators have found that most Canadian investors don’t understand what they’re paying in investment fees. Last month, the Mutual Fund Dealers Association of Canada said that expanded cost reporting that specifies investment fund charges should be included in fee summaries.
The Tories are also targeting “an unaccountable and overly aggressive” Canada Revenue Agency (CRA).
“It seems like every day brings new stories of CRA overreach: denying disability tax credits to people with diabetes, refusing benefits to single mothers because CRA is not satisfied with proof of separation, and auditing small businesses for tiny amounts while writing off large amounts owed by multinationals,” the platform said.
The Conservatives would impose a duty of care on the agency and revise the penalties so that first-time “problems or errors” receive minor fines. The party would also require the CRA to report on the tax gap so that resources could be devoted to problem areas, and increase funding to go after “wealthy tax cheats” and large corporations.
The NDP pledged to boost funding for the CRA and close certain tax loopholes.
For Canadians with disabilities, the Conservatives would reduce the number of hours
required to qualify for the disability tax credit (DTC) to 10 from 14 hours per week. The change would make it easier to access various programs and benefits for which the DTC serves as a gateway, the document said, including the RDSP and the child disability benefit.
The Tories would also double the disability supplement in the Canada workers benefit to $1,500 to help lower-income disabled Canadians. The plan would save a disabled person made eligible for the tax credit (or their family) an average of $2,100 per year, according to the platform.
The Liberals have proposed a Canada disability benefit modelled on the guaranteed income supplement (GIS) as well as changes to DTC eligibility. The NDP has promised a guaranteed livable income for Canadians with disabilities, as well as seniors.
As part of a plan to make housing more affordable, the Conservatives would encourage investments in rental housing by allowing those who sell a rental property and reinvest in rental housing to defer the capital gains tax.
The Tories also said they’d ban foreign investors not living in or moving to Canada from buying homes for a two-year period. A Conservative government would instead encourage foreign investment in purpose-built rental housing. The policy would be reviewed after two years. The NDP would introduce a 20% foreign buyer’s tax on homes, while the Liberals have proposed a 1% annual tax on the value of vacant real estate owned by non-residents.
The Conservative platform also had proposals to encourage more seniors to age in their homes. The home accessibility tax credit would change to $10,000 per person (rather than $10,000 per dwelling), and seniors and their caregivers would be eligible to claim the medical expense tax credit for home care. The party would also create a Canada seniors care benefit of $200 per month per household for anyone living with and caring for a parent over 70.
The platform has been costed internally and is being reviewed by the parliamentary budget officer, the Conservatives said.
Other measures from the Conservative platform include:
- doubling the Canada workers benefit to a maximum of $2,800 for individuals or $5,000 for families and pay it as a quarterly direct deposit rather than a tax refund at year-end;
- no longer requiring underfunded pension plans to convert to annuities, which can lock in losses;
- creating the Canada investment accelerator, a 5% investment tax credit for capital investment made in 2022 and 2023, with the first $25,000 refundable for small business;
- supporting gig economy workers ineligible for employment insurance (EI) by requiring gig economy companies to make contributions equivalent to CPP and EI premiums into a new, portable employee savings account every time they pay their workers. The money would grow tax-free and could be withdrawn by the worker when needed;
- converting the child care expense deduction into a refundable tax credit covering up to 75% of the cost of child care for lower income families;
- a one-month “GST holiday” this fall to help hard-hit retail stores recover; and
- eliminating the deficit, which hit $354 billion in 2020-21 as the federal government handled the Covid-19 crisis, within a decade.