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Canada May Introduce New Retirement Savings Plans, Post Reports

Bloomberg News

Canada

July 15, 2004

Elderly couple on bench, Ottawa - Fred Cattroll (photographer)

Photo By Fred Cattroll

The Canadian government is considering introducing a retirement savings plan that would allow investment gains to be tax-free, the National Post reported, citing government documents.

The plan would allow citizens to invest after-tax funds, and the returns from interest payments, dividends and capital gains would be sheltered from taxes when funds are withdrawn. The plan would supplement Canada's registered retirement savings plans, which shelter initial investments from tax and impose levies when funds are withdrawn, the Toronto-based newspaper said.

The proposal was initially discussed in last year's federal budget, and was later adopted as a campaign promise by the opposition Conservative Party in last month's election. The Liberal government failed to introduce it in this year's budget, suggesting the idea was dead.

Documents obtained under Canada's freedom-of-information laws now suggest the Finance Department favors such a plan, the Post said. The documents say such a system would be popular with Canadians because it would give them an additional incentive to save and it would be good for the economy, the newspaper said.


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