Managed Money Reporter Newsletter — Issue 141, November 1998

Editors: Carl Spiess & Allan McGlade

Does the Foreign Property Rule Affect Me?

Did you know?

The government-imposed Foreign Property Rule (FPR) is limiting the potential returns that you could be earning in your retirement savings plan.

In the last decade, private savings such as RRSPs have become a critical component of retirement income planning. An aging population and fiscal restraint have put pressure on the ability of governments to provide for Canadians in retirement. An estimated eight million Canadians are counting on their personal RRSPs to maintain their current lifestyle in retirement.

Simply put, personal retirement savings are essential to Canadians.

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Currently, the federal government allows Canadians to hold up to 20% of registered pensions or retirement savings plans in foreign investments. In many other countries around the world, including the United States, United Kingdom, Australia, Ireland and the Netherlands, there are no foreign content investment restrictions. This means that many Canadians like you do not have the full benefits of investing in different sectors and regions worldwide that can potentially increase portfolio returns while minimizing risk.

Why is Canada so strict?

In the past, governments have believed that keeping investment money in Canada keeps Canadians employed. However, a recent study by the Conference Board of Canada showed that raising the foreign property limit would not affect the economy, and would benefit Canadians.

Does the Foreign Property Rule affect me?

You may not realize you are being affected by the Foreign Property Rule. It affects Canadians at every income level who are saving for retirement either through company pension plans or RRSPs. This includes:

  • Canadians who are currently contributing to pension and RRSP plans
  • Canadians who are already retired and receiving income from employer pension plans
  • Canadians who are already retired and receiving income from their RRSP savings

What will an increase in the foreign content limit mean to me?

A higher foreign content limit would allow Canadian investors to take advantage of potentially better investment returns in other markets.

  • For example, a Canadian investor making annual contributions of $5,000 to an RRSP or defined contribution pension plan for the last 25 years could have earned $32,000 more with 30% foreign content compared to 20% foreign content.

More foreign content could:

  • increase the future value of financial assets held for retirement
  • allow Canadians more flexibility in their retirement savings, while reducing risk through diversification of investments
  • provide greater access to the 97.6% of the world equities market that is outside Canada, allowing Canadians to participate in higher growth economies and industry sectors in which Canada is not as strong as other countries

What can I do about it?

Encourage Finance Minister Paul Martin to change the Foreign Property Rule. Write to your federal Member of Parliament (MP) and ask the federal government to increase the current allowable foreign content limits in your personal retirement savings plan. Write your own letter or follow the outline of one of the paragraphs below, place it in an envelope addressed to your MP at the House of Commons, Ottawa, Ontario K1A OA6, and drop it off at your nearest mailbox or post office. A stamp is not required to mail a letter to your MP.

Don't know who your MP is?

Call the House of Commons Public Information Centre at (613) 992-4793 and provide your postal code.

Sample Letters; Key Messages

  1. As a Canadian mutual fund holder and a member of your riding, I would like to see the federal government raise the current allowable foreign content limit in Canadian personal retirement savings plans to 30%. My retirement plan is important to my future, and the Canadian government should do everything it can to help future retirees look after themselves - that means changing the Foreign Property Rule.
  2. The current foreign content limit is too low for everyday Canadian investors like my family and me. In order to help us provide for our future retirement, the Federal government should increase the foreign content limit to 30%.
  3. I plan to rely on my RRSP to help me maintain my current lifestyle through retirement. Raising the current foreign content limit in retirement plans will give Canadians an opportunity to increase investment returns. Other industrialized countries in the world do not have the same investment limitations imposed upon them. Changing the current Foreign Property Rule to 30% is an important issue which the government should address today.

Fund News


Trimark announces changes to the Trimark RSP Equity Fund. As of October 1, 1998, the redemption schedule will be reduced to six years from nine, making it identical to all other Trimark DSC funds.

Change of Management:
Trimark is also making a management shift to differentiate Trimark RSP Equity Fund from our other Canadian equity funds. Keith Graham and Geoff MacDonald, managers of Trimark Canadian Small Companies Fund and

Trimark Canadian Resources Fund, will assume management of Trimark RSP Equity Fund.

New Funds:
  • Fidelity Disciplined Equity Fund
  • Fidelity Canadian Balanced Fund
  • Universal Select Managers Fund
  • Elliott & Page Active Bond Fund
  • Elliott & Page Generation Wave Fund
  • Elliott & Page Growth Opportunities Fund
  • Elliott & Page Sector Rotation Fund
  • Elliott & Page European Fund
Capped Funds:
  • Elliott & Page Equity Fund
Terminated Funds:
  • Elliott & Page Bond Fund
  • Elliott & Page Global Bond Fund
  • Elliott & Page Global Balanced Fund

For additional information on any one of these funds, please call one of our Investment Associates at (416) 863-7777 or 1-800-387-9273.


Contact Us

T.  416.863.RRSP (7777)
F.  416.863.7479

ScotiaMcLeod is a division of Scotia Capital Inc., member of CIPF.

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