Modernize tax rules to keep global investment mandates in Canada
Canada risks losing global investment mandates unless its tax framework becomes more competitive.
Submission – Finance – International Competitiveness of the Canadian Asset Management Industry – Tax Policy Reforms
Recipients
Department of Finance Canada
Industry segments this resource supports
- Assets management
Summary
SIMA is urging the federal government to modernize Canada’s tax rules to strengthen the competitiveness of the country’s asset management industry and prevent the continued migration of global investment mandates to international financial centres. The submission highlights two priority reforms: establishing an elective Canadian Collective Investment Vehicle (CCIV) and updating section 115.2 of the Income Tax Act to reflect the growth of private equity, infrastructure, and alternative investment strategies. SIMA emphasizes that these reforms would help Canada capture a greater share of global investment flows, support job creation, and enhance capital markets competitiveness at minimal fiscal cost.
Why this matters: Canada risks losing global investment mandates unless its tax framework becomes more competitive.
Key takeaways
- SIMA is calling for targeted tax reforms to help Canada retain and attract globally mobile investment mandates.
- The proposal focuses on creating a Canadian Collective Investment Vehicle (CCIV) and modernizing section 115.2 (safe harbour) of the Income Tax Act.
- Canada’s asset management industry oversees $4.5 trillion in assets and supports over 415,000 jobs, yet continues to lose mandates to jurisdictions with more competitive tax regimes.
- Economic modelling suggests Canada could retain or attract $281 billion in foreign sourced mandates by 2030, generating $1.23 billion in annual revenue and supporting 3,510 direct jobs.
- The proposed reforms carry near zero fiscal cost because the income at issue is not currently taxed in Canada.
- SIMA is requesting a meeting with Finance officials and inclusion of asset management competitiveness in the 2026 federal budget pre consultation process.
The submission aligns with SIMA’s broader advocacy for capital formation, regulatory modernization, market access improvements, and retirement savings policy enhancements.
