The Canadian life and health insurance industry says it welcomes the fiscal stimulus measures set out in the federal budget announced Tuesday by Finance Minister Jim Flaherty.

“The industry is supportive of the initiatives to promote financial stability and maintain efficient and well-functioning markets, as well as the tax relief provided to Canadian consumers,” says Frank Swedlove, president of the Canadian Life and Health Insurance Association (CLHIA).

With respect to the financial services sector, the industry particularly welcomes the repeal of Section 18.2 of the Income Tax Act which restricts the deduction of interest for certain investments in foreign subsidiaries. “This would have put Canadian multinational companies at a competitive disadvantage to foreign competitors,” explains Swedlove.

The industry also appreciates the government initiative to create the Canadian Life Assurance Facility, similar to what had been provided earlier to the banks. This facility will ensure that Canadian life insurers are put on an equal footing relative to foreign life insurers that benefit from guarantee programs provided by their home governments, CLHIA says.

The life and health insurance industry is also supportive of the government’s financial investment in the Canada Health Infoway with the goal of providing 50% of Canadians with an electronic health record by 2010.

IE