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Willam W. Chan's Submission in Response to Finance Canada's Regulatory Framework for Federally Regulated Defined Benefit Pension Plans consultation:
My original comments:
Why does the Government want to spend the time and manpower to monitor a Lock-in-RRSP? Why should it be any different than the regular RRSP? I cannot understand the rationale of having two different RRSP's.
My additional comments:
These are comments on fairness. I do not think the tax rules are fair in treating the capital gain and dividend income earned in RRSP:
When a RRSP makes capital gains on disposition of shares or bonds, the net of capital gains and losses should flow thru to the recipient on withdrawa. When a RRSP earns dividend income, the dividend tax credit should flow thru to the recipient along with the dividend income.
Most financial institutions are already tracking the book costs in RRSP's. All what it needs are additional accounts within the RRSP to track the capital gains and capital losses and dividend income. The recipient could have an option of drawing from the capital gain, or dividend income and the non-capital gain pool. Relevant taxes and dividend tax credit could apply accordingly. With the present information technology, fairness in this aspect of RRSP could be accomplished.
Willam W. Chan