The Investment Funds Institute of Canada says it is pleased with the federal government’s move to scrap foreign content limits yesterday, although its members are waiting until the budget actually passes before they leap to respond to the change.

In a news release, IFIC lauded the decision to remove the 30% cap on foreign content in RRSPs and pension plans, saying it will provide Canadians with more investment options. “It’s a victory that, quite frankly, we were not expecting this to happen all at once,” said John Murray, IFIC vice president, regulation & corporate affairs. “We had hoped the government might reduce the restrictions incrementally. We are very pleased with the results,” he said, noting IFIC would be sending a thank you note on the issue to Finance Minister Ralph Goodale.

However, the fund industry itself may be holding off on the thank-you notes until the budget actually passes, which is not a slam dunk with a minority government.

IFIC says that fund companies are generally waiting until there is more certainty that the budget will pass before opening up restricted funds. While the budget states the restriction has been lifted effective January 1, 2005, fund managers want to ensure both investors and fund companies make the appropriate decisions, said Murray.

IFIC added that it is asking the Canada Revenue Agency for immediate clarification of the effective removal of the 30% limit and the fund companies will make their decisions based on this information.

Murray also said IFIC is pleased to see an increase in RRSP contribution limits. But he added more needs to be done to help Canadians saving for retirement. “We had suggested to Ottawa that RRSP contributions be increased immediately to $27,000 with the limit indexed after that. The government’s announcement doesn’t go as far as we would have liked. With Canadians living longer, it is essential that they have the opportunities to save and not have to rely on government, or anyone else, during their retirement years.”

IFIC is also pleased to see some action on its primary pre-budget recommendation this year, movement towards a more-harmonized securities regulator. “IFIC, along with other industry groups, has been calling for increased co-operation among securities regulators for some time,” said Murray. “We hope the government will be inviting industry stakeholders such as ourselves to give our views on this critical initiative.”