Ottawa, August 23, 2013

Archived - Government Invites Comments on Legislative Proposals to Modernize the Life Insurance Policy Exemption Test

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The Government today released for public comment draft legislative proposals that would implement changes to modernize the exemption test and other life insurance policyholder taxation rules.

Economic Action Plan 2012 proposed to implement changes to update the rules that determine whether a life insurance policy is an exempt policy (the so-called “exemption test”) and to recalibrate, where appropriate, the investment income tax levied on life insurers. Economic Action Plan 2012 also announced that the Government would undertake consultations with key stakeholders on the proposed changes.

Following the completion of these consultations, Economic Action Plan 2013 confirmed the Government’s intention to proceed with legislative proposals implementing the proposed changes to the exemption test, as modified to take into account input from public stakeholders.

Comments on the attached draft legislation can be submitted to the Department of Finance at or to the address below. The closing date for comments is November 6, 2013.

Tax Policy Branch
Department of Finance
140 O’Connor Street
Ottawa, Ontario
K1A 0G5

For further information, media may contact:

Jack Aubry
Media Relations
Department of Finance

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