The Canadian Life and Health Insurance Association (CLHIA) has released its 2020 Federal Budget Submission, which recommended initiatives to help give Canadians access to affordable prescription drugs and secure guaranteed lifetime incomes, as well the elimination of capital tax on Canadian financial institutions.
“[T]he industry recognizes that real problems exist in our prescription drug system today,” the CLHIA said. “Improvements must address access issues as well as the cost and financial sustainability of the
Praising the federal government’s efforts to address high medication costs, including the proposed Canadian Drug Agency and the development of a national formulary, the association urged the government to “ensure the continued viability of health benefit plans that the majority of Canadians rely upon and value today.”
It also encouraged the development of a standard, scientific evidence-based list of medicines for all Canadians, whether or not they are covered under a private or public plan. And to leverage the entire buying power of the Canadian market in drug-pricing negotiations conducted through the pan-Canadian Pharmaceutical Alliance (pCPA), the association recommended that private plans be represented in the pCPA.
The CLHIA also urged the development of a comprehensive strategy for Canadians to have access to high-cost medicines for rare diseases when needed.
On the issue of guaranteed retirement income, the association commended the changes in Budget 2019 to facilitate the use of Advanced Life Deferred Annuities (ADLAs) and Variable Payment Life Annuities (VPLAs) in certain pension plans. But it noted that only members of large DC pension plans can avail of VPLAs, while liquidity requirements in TFSAs prevent them annuities.
The CLHIA called on the government to permit VPLAs to pool participants from all registered retirement plans, and that liquidity requirements in TFSA rules be waved for Canadians to use TFSAs supplement retirement savings.
And while the association recognized that strong capital requirements are needed to protect consumers and taxpayer-funded bailouts, it noted that Canada remains the only G20 country to also impose a tax on financial institutions’ capital, with life insurers paying over $2 million in federal capital taxes on top of income taxes on corporate profits.
“While the CLHIA has repeatedly advocated eliminating this tax, the introduction of a new regulatory capital framework in 2018 has further increased the need to eliminate the capital tax burden of life insurers,” it said.
“[It] is time for the Government to eliminate capital tax on Canadian financial institutions to enhance their competitiveness,” the association said, calling for a complete elimination of the tax in the short term or its phaseout over a reasonable period.
The CLHIA also declared its support for climate change mitigation, saying it looks forward to continue working with the government on the issue.