Revenue Canada Taxation Head Office
A.B. Adler (613) 957-8962
December 9, 1988
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This is in reply to your letter dated November 30, 1988 in which you raised a number of questions concerning a proposal to amend the Income Tax Act to prohibit a deduction for past service additional voluntary contributions (AVC) made after October 6, 1986 to a money purchase registered pension plan.
Our comments follow the order of your questions.
(1) The October 6, 1986 Ways and Means Motion in question reflects the intentions of the Government with respect to past service AVCs, but does not in itself carry the weight of the law. However, having stated its intentions clearly in that Motion and in the Department of Finance Release No. 88-32 dated March 28, 1988, the federal government is in a position to amend the relevant provisions of the Income Tax Act to have retroactive legal effect.
(2) We are not in a position to respond to your questions concerning the possibility of future deferrals in implementing the proposed legislation or even a change in the effective date of the Motion concerning past service AVCs. Since tax policy is the responsibility of the Honourable Michael H. Wilson, Minister of Finance, we suggest that you address these questions to the Minister of Finance.
Yours truly
for Director Financial Industries Division Rulings Directorate