Ahead of the upcoming federal budget, the Investment Funds Institute of Canada is pressing Ottawa to encourage the development of a national securities regulatory system.

In a statement released today, IFIC calls for increased co-operation among securities regulators, with the ultimate goal of creating a harmonized, regulatory structure. “Building a national approach to regulation will be beneficial for investors and the mutual fund industry alike,” said Tom Hockin, president and CEO of IFIC. “A harmonized regulatory structure would reduce the current confusion prevalent within the current fragmented situation where different regulators have competing rules and philosophies.”

In addition to regulatory reform, IFIC is also calling for higher RRSP and RESP contribution limits. The trade association would like to see RRSP contribution limits hiked to $27,000 with the limit indexed afterwards, by doubling the contribution limit from 18% of $75,000 of earned income to 36%.

The RRSP limits have been increasing over the past couple of years, but Hockin said these increases do not compensate for the period when the contribution limit was frozen at $13,500 and inflation eroded the real value of the amount. “Increasing RRSP limits provides Canadians with flexibility in saving for their retirement,” he said.

Hockin called on the government to increase contribution limits for RESPs beyond the current lifetime limit of $42,000 and annual limit of $4,000. These limits have been fixed for many years and are not indexed for inflation, nor have they taken into account the skyrocketing costs of education, he said.

In addition, IFIC is encouraging Ottawa to adopt Tax-Prepaid Savings Plans, which it suggested it may adopt in last year’s budget. TPSP contributions are taxable in the year they are made but withdrawals are tax free. TPSPs provide additional flexibility to Canadians in securing their retirement incomes, at little to no revenue loss for the government, said Hockin.

He added that some reform of the treatment of RRIFs is also necessary, as Canadians are living longer and that could mean some may outlive their retirement savings. The Standing Committee on Finance has already recommended the government take a comprehensive look at retirement reforms, with a review to be completed by the end of June 2005.