Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 4 - Evidence - January 30, 2014
OTTAWA, Thursday, January 30, 2014
The Standing Senate Committee on Banking, Trade and Commerce met this day, at 10:30 a.m., to study the ability of individuals to establish a registered disability savings plan (RDSP), with particular emphasis on legal representation and the ability of individuals to enter into a contract.
Senator Irving Gerstein (Chair) in the chair.
[English]
The Chair: Good morning and welcome to this meeting of the Senate Standing Committee on Banking, Trade and Commerce. Today the committee is holding its fifth meeting as part of its study on registered disability savings plans, or RDSPs, with particular emphasis on legal representation and the ability of individuals to enter into a contract.
As you know, the committee commenced its study on December 4, 2013, and to date has heard from the Minister of State (Finance), officials from the Department of Finance, several groups working with disabled Canadians, and some financial institutions.
Today the committee will hear from two financial planning institutions regarding RDSPs: Mackenzie Investments, which I understand is located in Toronto; and Assante Capital Management Ltd., which is in Burlington, Ontario. Welcome and thank you for appearing by video conference today.
We will start first with Ms. Carol Bezaire, Vice-President of Tax and Estates Advisory Services with Mackenzie Investments. Perhaps you could introduce your associate who is with you. Your presentation will be followed by Mr. Trevor Marsh, Financial Adviser with Assante Capital Management Ltd.
Carol Bezaire, Vice-President, Tax and Estates Advisory Services, Mackenzie Investments: My colleague Sophie Dagneau is the Manager of Operations Services at Mackenzie, and Sophie and I are pleased and honoured to be part of the discussions this morning.
Mackenzie Financial Corporation was founded in 1967. We provide, through multiple distribution channels, investment advisory and related services that are focused on the provision of financial advice. We package our investment advice into mutual funds, pooled funds, segregated accounts, and separate accounts for retail and institutional investments.
Sophie and her team oversee the technical aspects of the registered disability savings plan. My role at Mackenzie as Vice-President Tax and Estate Planning encompasses tax and estate education and planning, and practice management education and coaching for independent financial advisers who sell Mackenzie funds. I am also the product manager for the registered disability savings plan. The RDSP is a great savings tool that provides opportunities for Canadians who have disabilities and their families to save for the future of an eligible individual.
At the time of the introduction of the RDSP in 2008, I was an advocate for this plan to be included in the service offerings Mackenzie and affiliates supply to independent financial advisers. Based on feedback from our adviser clients, Mackenzie and the investors group of companies launched the RDSP in November 2011, after the major banks had been participating from inception.
Financial advisers who deal with families and help with their finances and planning issues were anxious to use the RDSP as another service and understand the value of the plan and how it affects Canadian families. I am pleased to say that we have opened over 6,000 accounts in two years.
The challenges with attracting eligible RDSP clients has always been the complexity of the program, the original restrictions and what we are here to talk to today: the legal representation and ability of a beneficiary to enter into a contract. Based on disability issues we have been encountering when speaking with advisers, the provisions under the Income Tax Act as to who can be a holder is not as clear cut when dealing with some eligible individuals who could benefit from the RDSP.
Some of the disabilities would potentially qualify an individual as contractually competent but, unfortunately, financial responsibility does not exist. For example, an individual who suffers from schizophrenia, is bipolar, or has autism to some degree may be contractually competent but should not be responsible for handling the money or making investment decisions over the long term.
While we have been able to allow a parent or qualified family member to be a joint holder with their adult child, the fact is that the payments out of the RDSP can go to the beneficiary at any time and may defeat the purpose of the RDSP and, indeed, force repayment of any disability grants or bonds received.
The amendment to allow a qualified family member to be the holder of an RDSP for a beneficiary, without the necessity of a legal appointment, has been well-received by advisers and their clients. This allows a larger range of individuals to benefit from the program.
I would like to see more clarity as to definitions for ``qualified family member'' and ``contractually competent.'' Assume that an eligible adult individual had a parent as a qualified family member under the current definition. The only way for someone, for example, a sibling, to be the holder in the event of a death of the parent is to become a qualified person. That would require proof that the eligible adult individual is not contractually competent or that the sibling is legally authorized to act for the beneficiary.
This could put an existing RDSP at risk of collapse by the beneficiary while the legalities are being sorted. Allowing the sibling to take on the holder status in place of the parent may not only reduce the risk to the RDSP but would help ease the worry to the family.
As other witnesses have discussed, it is not particularly easy to get a court order of financial guardianship, even in those provinces or territories that have streamlined their processes. For example, a trustee of a group of individuals who are part of a Community Living environment, while eligible for an RDSP, usually have no qualified family member in touch with them. The trustee takes care of everything for them, including financial decisions. Allowing an agency such as the Canadian Association for Community Living to hold RDSPs for beneficiaries is another aspect of expanding the qualified family member that can be explored.
One suggestion would be to allow eligible individuals to make a personal appointment of a supportive person for decision making. I'm sure you have heard this suggestion from other parties, such as the Canadian Association for Community Living.
Mr. Chairman, Mackenzie Investments and the investors group of companies strongly support the RDSP as a need-to-have solution for many Canadian families who deal with the uncertainty and financial pressure of disability.
Ms. Dagneau and I are pleased to have the opportunity to appear before you today and welcome any questions you may have.
The Chair: Thank you very much, Ms. Bezaire. Mr. Marsh, do you have an opening statement?
Trevor Marsh, Financial Advisor, Assante Capital Management Ltd.: Yes. Thank you and good morning. I'm Trevor Marsh, long-time chartered accountant and certified financial planner for the past 25 years. I am currently a Financial Advisor for Assante Capital Management Ltd. in the St. Catharines, Ontario branch. Assante Capital Management Ltd. is one of the largest wealth management firms across the country, with over 900 professional advisers servicing over $26 billion in assets for their clients. As well, I operate a small tax preparation office. It is in both capacities, as a financial planner and a tax preparer, that I will be commenting on the RDSP today. My perspective will come more from my actual observations of and experiences in dealing with individuals regarding RDSPs.
I have observed the following challenges of the RDSP program: As a financial planner, I recognize that it is one of the most lucrative savings plans for disabled individuals to provide much-needed financial support later in life. Those who have opened the plan are extremely pleased with the rapid increase in value due to the grants and bonds they receive from the program. However, I have found in discussing this with individuals who are disabled and over the age of 40 that they feel the time frame to receive the full benefit of the plan makes it somewhat unattractive to them.
A second challenge is the lack of awareness that I find individuals have regarding the program. This may be due to the fact that there is a disconnect in the knowledge of the individual that they are even eligible to receive or apply for the RDSP. In most cases, the tax preparer, who may know of the individual's disability tax status, either does not communicate the fact that the individual is eligible for the RDSP; or they may be unaware that the program even exists. As well, lots of times there's no communication between the tax preparer and the financial adviser. In my personal experience, I have not had one client, identified as having the Disability Tax Credit, who was aware that they could open an RDSP. In fact, most weren't even aware that the plan existed.
One suggestion there might be that some awareness of the program be made at the initial level when the doctor prepares the Disability Tax Credit form and provides it to the client. Also, when the approval letter from the Canada Revenue Agency is received by the client, there could be some information in that correspondence on the RDSP program.
Another challenge we have noticed is in resolving issues, such as a discrepancy in the identification of the client, for example a social insurance number or other issue, when processing the application. In most instances, when a parent is opening an RDSP plan for a disabled child, we have found that the social insurance number information on file at HRSDC doesn't always correspond with the person's tax filing information or the social insurance number is the same but the spelling of a name or a missing middle initial causes a rejection of the application at HRSDC.
That kind of issue is usually a client's fault for not providing us with their actual social insurance card. However, the real problem comes when we as financial advisers need to try to resolve the matter and we cannot get any information from HRSDC due to privacy and confidentiality laws. In our situation, the client, who may not be fully able or aware of how to go about correcting this problem, has to contact HSRDC and resolve the issue. It creates a delay in the application, and we have noticed frustration amongst those who could set up an RDSP.
One suggestion there would be to have something similar to the Canada Revenue Agency's provision for the adviser to represent the client. Perhaps there could be such a mechanism whereby we could represent our clients in their dealings with HSRDC.
In closing, we strongly support the RDSP program as it is a great program for individuals. I would like to answer any questions you may have.
The Chair: Thank you, Mr. Marsh, for your presentation.
Senator Hervieux-Payette: Good morning. My first question is for Mackenzie Investments. You were talking about 6,000 accounts. Could you give us the types of disabilities, mental or physical? Yesterday we were told that in terms of mental disability, the administrative problems were quite high; and in terms of blind people, only 30 per cent were even aware of the program or had access, which means that 70 per cent don't.
Among your 6,000 accounts, on average, who goes to you to get these benefits?
Ms. Bezaire: Thank you for the question. Of the 6,000 accounts, we see a trend in parents opening accounts for autistic children, and those with Down's syndrome. I think our biggest issue will be when those children reach the age of majority as the legal representation will be an issue for these parents. At the moment, they're opening the plans when the children are young.
With the RRSP and RIF rollover, we're finding more accounts being opened for people who may be paraplegic or schizophrenic. They are rolling their RRSPs and RIFs over at a higher percentage and not really caring about the grant bond. Our biggest trend is autism.
Senator Hervieux-Payette: Would you agree with Mr. Marsh that those who hold the funds don't have any support? Where should the support come from? We're dealing with parents who may not be financially knowledgeable as to how to administer the plan. As well, there are various players. Yesterday witnesses talked about banks not being very helpful about bank accounts for them and other things like that. Would you think that there should be one place where these people could carry out all the requirements for the administration of creating that fund and following it up, apart from the question of representation when the parents are dying, which is another matter. In my case, it is a civil question: Who will represent whom? To join the program, do you think there should be one place? Who should be responsible for giving access and explaining to the parents, not to the children, about how to manage this benefit?
Ms. Bezaire: I'm sorry, was that for Mr. Marsh or for me?
Senator Hervieux-Payette: For you.
Ms. Bezaire: At Mackenzie we work through financial advisers. We deal with financial advisers who know the family and most of the issues surrounding that family. That's where we rely on the activity for the RDSP: talking about it, introducing it and making sure that the investments are in there for them.
Senator Hervieux-Payette: What are your administrative costs for these funds?
Ms. Bezaire: We have outsourced all of the administration to CitiFinancial. We have a contract with them, but I can't tell you the exact number because I don't know it. I do know that we pay per account.
Sophie Dagneau, Manager, Operations Services, Mackenzie Investments: Yes, and per transaction as well.
Senator Hervieux-Payette: Would you mind asking them because I think this is an important factor. This committee has studied over and over again about the costs to administer mutual funds. They were quite high, and that's why I asked you about it.
Senator Ringuette: It's not the same. You asked about their operating costs.
Senator Hervieux-Payette: No, no.
Senator Ringuette: That's not related to the fees that they charge for the account.
Senator Hervieux-Payette: No, no. They contract out to an adviser. That's what I understood. Mackenzie does not administer the funds; another group does that. We now have three parties involved. At the end of the day, what are the costs to the client —the handicapped person — to do the whole thing?
Ms. Bezaire: The cost to the handicapped person would simply be the same mutual fund cost that any other person would pay. There's no extra cost for running the account for them. Mackenzie and the Investors Group of Companies pay that.
Senator Hervieux-Payette: Okay.
Ms. Bezaire: We receive the management fee, as we would charge anyone else. It is exactly the same fee as anyone else would pay.
Senator Hervieux-Payette: What is that fee?
Ms. Bezaire: It would run anywhere from 1.5 per cent of the value of the account to 2 per cent. It is the same market as anyone else per fund.
Senator Hervieux-Payette: My question is to Mr. Marsh. Normally when I deal with my accountant when he is preparing my income tax return, I sign a form so he can talk to the people at CRA to exchange information. First, they don't bother me and, second, the accountant can answer any questions about the return.
I was wondering about something when you talked about representing the client. Even though you are an accountant, you don't qualify to contact CRA or HRSDC for the client to have the proper information from these two organizations.
Mr. Marsh: That's correct. As a tax preparer for my client, I am allowed to have them authorize me to represent them at Canada Revenue Agency. I have that access. However, I cannot represent my client at HRSDC. If there's anything wrong with the application form, we can't even get any information on what is wrong, other than it is wrong.
I am in a unique situation because I have clients that I represent for tax and advising. Most advisers aren't the tax preparer so they would be at a loss in both instances where they couldn't contact the CRA or HRSDC. In that case, the adviser is relying on the client to be able to coordinate and call these different agencies to get to the bottom of the problem.
Senator Hervieux-Payette: Would it be a good approach if the committee were to recommend in its report that the qualified financial adviser as well as the accountant be able to represent the client with the proper qualification? We could have a form similar to the one we give to our accountant for our income tax return. You could be provided with that form and be authorized by the holder of the account to release the information. Then you could give full service to the family of the child or to the individual. Would that be a good approach?
Mr. Marsh: Yes, that would be wonderful.
Senator Hervieux-Payette: We have another solution.
You mentioned doctors. In my experience with doctors, and I apologize to the financially smart doctors, they're not necessarily taking good care of their own finances. So I say it should be in the hands of those who are financially responsible in that sector. I joke with my doctor about that — I probably advise him.
You said that you have 900 advisers. Are you in touch with this large group? Have you discussed that? Is it part of the agenda of your discussions at Assante Capital Management Ltd. so that all of you would be on the same track?
Mr. Marsh: I'm not aware. We are basically independent advisers. I am not aware of any large discussion around registered disability savings plan issues. Unfortunately, I can't really comment on whether other advisers are having similar issues.
Senator Hervieux-Payette: My final question is: You say it is a very lucrative plan, but you have the final decision for the investment. You don't contract that out to another firm and you manage these funds.
Mr. Marsh: As an adviser, I assist in suggesting and recommending the investments inside the RDSP. At Assante, we hold those as off-book or client-named accounts. We have used Bank of Montreal, which was the first institution to allow independent advisers to offer this product. Assante doesn't manage it in-house at all. It is done by BMO Guardian.
Senator Hervieux-Payette: Is there a cost or is it a total cost when you open the account? Do you charge fees?
Mr. Marsh: No. The fees are the same as the Mackenzie representatives mentioned, depending on the investment inside the RDSP. If it's a mutual fund, there's a 1.5 per cent to 2 per cent fee. If it's a GIC, there's really no cost to the client at all, if they want to hold the investment that way. There are no additional fees for me to open up an account for a client.
Senator Hervieux-Payette: I'm happy to see we have so many volunteers. Thank you.
Senator Black: Thank you for being with us today. I found your presentations to be extraordinarily constructive and helpful. Thanks very much for that. I have three questions, if I may. Would you all please summarize for us what you believe to be the barriers to opening these accounts?
Ms. Bezaire: I will speak first, I guess, because I like to speak.
The biggest barrier for us is the knowledge base of people with disabilities who actually want to be classified as ``disabled.'' The biggest barrier is having someone actually apply for the Disability Tax Credit if they don't already have it. We try to help them to understand or to help their adviser explain it to them.
The other big issue is the uncertainty around accessing the money for anyone who may need it before age 60. For example, we have a client that I suggested did not open an RDSP because she has cystic fibrosis and her longevity is probably not more than the age of 35. An RESP would be better for her. Legal representation is the third issue.
Senator Black: Mr. Marsh, do you have anything to add to that?
Mr. Marsh: I agree with all the comments Carol made. The only additional one would be, as I mentioned before, around the administration of processing an application, especially if there happen to be some issues related to identification. To reiterate the issues around knowledge of individuals trying to apply, in most cases they really are not aware of this program.
Senator Black: That was very helpful.
Mr. Marsh, you made an interesting comment in your testimony. You said you have experienced some frustration with some of your clients with the timeline for withdrawals. What were you saying there and what would you suggest?
Mr. Marsh: I found that individuals who are 40 or older keep that within the plan for the full 20 years until age 60 and need to wait until age 70 to withdraw, many of them are looking at age 70. They realize that is a pretty ripe old age to be able to access that money and get the full benefit of all the grants.
Senator Black: Not wanting to put words in your mouth, but might you suggest that the 10-year period be reduced?
Mr. Marsh: It could be reduced or have an age qualification as well. If they hit a certain age, they could potentially withdraw and accelerate the withdrawals.
Senator Black: Thank you very much. That's constructive as well.
You have all referred to the fact that your clients don't know about this program. Let's pretend that the Government of Canada or governments of Canada say to the three of you: Please design a program that will communicate to the target audience that this program exists. What would you do?
Ms. Bezaire: If we were to design it, I would most likely bring in the medical professionals so that they know about it. I would make it so that the point of contact who deals with these individuals would be conversant about how this works. I have made a number of presentations to social workers who deal with individuals with disabilities. I've also gone to some community and Community Living centres. The influencers around the people with disabilities need to be reached.
Senator Black: Very constructive.
Mr. Marsh: Maybe on the Disability Tax Credit form that the individual brings to their doctor to have signed there could be an indication of the additional benefit they could look into. Have it so the doctor can point that out to their patient. I'm not sure how they would receive the idea or why they would do that but hopefully they would.
The tax preparer has more knowledge of the RDSP. Sometimes tax software has pop-up messages in the preparation of a return. For example, if someone claims a Disability Tax Credit, maybe there could be a pop-up that asks: Have you considered opening up an RDSP account?
Senator Black: All good thoughts. Thank you all very much for your commitment to this.
Senator Ringuette: Thank you for your comments. In your experience, what would the average yearly contribution to the plan be from your clients?
Ms. Bezaire: At Mackenzie Investments for most people we will advise each year of the maximum carry forward for someone who has not yet opened an RDSP. It would be $3,500 this year, which will max them out at $10,500. We construct it that way.
The average right now is about $12,000 contributed to the plan.
Senator Ringuette: Is that per year?
Ms. Bezaire: Per year, yes. It's higher than average, I guess, simply because we average that out with some lump sum transactions that go in for parents and grandparents who want to save for the future, notwithstanding grant and bond. They want to put some money aside for the future of an affected child or grandchild.
Senator Ringuette: How much would $12,000 a year generate in government grants to the portfolio?
Ms. Bezaire: If they qualify, on the first $1,500 they would get the full $3,500. They wouldn't get any grant or bond over that.
Senator Ringuette: What would be the average earning from a mutual fund?
Ms. Bezaire: Within the account?
Senator Ringuette: Yes.
Ms. Bezaire: It depends on the mutual fund or the portfolio because some people have more than one fund depending on the amount of money. Mr. Marsh may be better able to talk about the mutual fund returns. The earning varies by mutual fund but they all follow the market. Most of the funds chosen are balanced, so they're pretty conservative and they grow and compound on that account. I don't have a percentage but perhaps Mr. Marsh does.
Mr. Marsh: I can comment in general. It all depends on the risk profile of the owner of the RDSP as to what they want to invest in. A balanced mutual fund, which has a component of bonds and stocks, could historically average anywhere from 5 per cent to 8 per cent long-term. Over the last few years they have done fairly well because of the increase in the markets, but it solely depends on what investment is inside. For example, if you were to have a GIC, the best you could get is 2 per cent or 3 per cent. If you were to go high-risk, you could do substantially better. It varies based on the individual's investment objectives and, of course, the funds and investments selected for the plan.
Senator Ringuette: On average you would say roughly 5 per cent, if someone is lucky and has the right adviser.
Mr. Marsh: I would say that 5 per cent over the last few years would be probably the low end. Likely they would be more in the range of 8 per cent in a well-balanced fund or even higher. It's hard to tell because every account is individual.
Senator Ringuette: This might be a tricky question but I don't want it to be tricky. I just want it to be very objective in respect of the program objective of helping disabled persons down the road. In terms of the mutual fund average return, conservative investors will probably seek an average return of 5 per cent, which includes the $3,500 from the federal government. On that return administrative fees, as you indicated earlier, are 1.5 per cent to 2 per cent. I suspect that some mutual fund administrators are even higher than 2 per cent. In other files, we've received that kind of information.
Almost half of the yearly income benefits of the capital are being captured in fees.
Mr. Marsh: I would like to actually correct something. When I mentioned 5 per cent, that is after the mutual fund fees. That would be what the client would receive after all fees are paid — 5 per cent.
Senator Ringuette: What would be your average fee on your average program? If you look at 2 per cent — you said earlier that we're looking at an average $12,000 a year investment, which is very high; you have to be in a very high income bracket to be able to put $12,000 a year in such a program. Then you add the $3,500. So we're roughly at an average of $15,000 a year, at 2 per cent, on average.
Ms. Bezaire: The 2 per cent is taken on average — well, the 2 per cent is taken from the entire fund, so all the investors —
Senator Ringuette: So it's more.
Ms. Bezaire: No, it's not. It's about 1.5 to the 2 per cent, but then it's pro-rated for the amount that each person has. The cost of the portfolio manager to actually manage the investments and the stock portfolio or underlying securities in the mutual fund — that's what they're paying for, instead of sitting with the GIC that is that much have less cost to them, but they're going to get less of a return. So they're paying for the advice — no more or less than anyone else who buys a mutual fund would.
Senator Ringuette: What you're saying, from my perspective, is even more drastic, because the 2 per cent is not solely on the contribution on a yearly basis but is on the cumulative capital, plus interest received from the fund. That is a lot of money.
Ms. Bezaire: Again, it varies by the fund. If it is a fund that doesn't move very often and the portfolio manager doesn't trade a lot, it's going to have a lower fee on it. That's what a lot of people in RDSPs are taking: balanced funds or conservative funds. If it's an active fund, it will cost more because of trading fees.
Senator Ringuette: On the one hand, the taxpayers and the government, through this program, are trying to create a fund to help disabled persons have a decent or better income in the future. I've opened up a can of worms with regard to the fees that are being charged in that there is no break for them in comparison to any other mutual portfolio. Maybe at the end of the day, it's one of the barriers to the program. From a financial adviser point of view and mutual fund society, it's not really different than any other.
Ms. Bezaire: There is no fee for the account itself; it's what is chosen to go into it. The fact that we have higher contributions going in on average is simply because we have the assistance of a financial adviser for those families.
They can certainly go to the banks or they can use the RDSP that Mackenzie Investments sets up. The point I want to make is that they have as much choice as anyone who does not have a disability. That's the overriding issue with the RDSP, but I certainly do understand what you're saying about the fees.
Senator Nancy Ruth: Mr. Marsh, you talked about a number of frustrations, but I wanted to ask you about the clients who want to get their money out earlier or who did not pick up plans, as Mackenzie said, because they had cystic fibrosis. In the idea of lowering the amount of time, would you do this by disease or simply by years?
It would seem to me that someone who is a paraplegic could have lung problems, heart problems and a whole set of other medical problems, and that the age of 55 or even 50 might be reasonable, because their work lives are so complicated by these other diseases. Had you thought about what age you would like to see some of this lowered to so people could withdraw?
Mr. Marsh: I haven't actually come up with an age number. You make a good point, though, that depending on the severity of the disability, not only would age be a limiter or a mechanism to withdraw sooner, the type of disability or the potential longevity of their life could also be more prevalent in the withdrawal of the RDSP.
If the life expectancy is under five years, I believe there is something that can be submitted from their doctor to release those funds earlier. I do not know the details around it, but I'm aware of it.
Senator Nancy Ruth: To the women from Mackenzie, I was interested in your idea of using an agency like Community Living after parents die — or the transfer to a brother, sister or whatever.
What kind of legal structure would a group like Community Living need to have to be the fiduciary or legal agent? Have you talked to them about this?
Ms. Bezaire: I have. When there are individuals living within a Community Living environment, normally — in Ontario I know for sure — the Community Living agency is actually named as trustee for the people. Provincially, they are provided the trusteeship.
So I would think that would pretty much indemnify everyone if we could use the trustee. They handle the Ontario disability support payments for them. They handle their everyday welfare. I think an RDSP would fall into that for them as well, and most provinces have the same mechanism with Community Living.
Senator Nancy Ruth: Help me understand. Is there not a national group composed of provincial groups called Community Living?
Ms. Bezaire: Yes, there is both a provincial and — Community Living stretches across all of Canada, so it is national, but it's overseen by provincial governments.
Senator Nancy Ruth: When you talk about them having the financial agency to deal with provincial financial programs, are you talking about the provincial Community Living or are you talking about the individual housing place?
Ms. Bezaire: The provincial Community Living.
Senator Nancy Ruth: The agency?
Ms. Bezaire: Yes.
Senator Nancy Ruth: It's not an agency; it's a non-governmental organization — a volunteer organization, or run by a volunteer board.
Ms. Bezaire: Correct.
Ms. Dagneau: If I may comment on the previous question about ``on what basis would the age be established to access the funds'' — if that were to be changed, whether or not it would be on the condition of the individual. I would suggest it would be more of a general decision or reduction in age. The complexity of the RDSP product is certainly something that could be considered a barrier in either offering or being able to explain what all of these rules are. I would think that a general reduced age to access the funds would probably be more beneficial.
Senator Nancy Ruth: If Community Living became the trustee for the person and the agent for the funds, does Mackenzie Investments see developing a special mutual fund for all those who use that agency of Community Living and Community Living could sell off units, or you would sell off units for Community Living? Do you see it remaining the way it is, with your own individual agents who sell?
Ms. Bezaire: At Mackenzie, we use financial advisers like Mr. Marsh. Our funds would be sold through a financial adviser dealing with a Community Living environment.
Senator Nancy Ruth: My last question to both of you: You didn't mention the legal profession as a group that might help sell these things. It seems to me a lot of the estate and will folks might use this. Have you ever talked to that section of the bar about this?
Ms. Bezaire: Yes, we have. Most of the estate trust lawyers I've spoken to are excited and have been using the RDSP, because they have pension trusts or other monies set aside for individuals with disabilities, and they want a way to help them further their future. So they have been adopting the RDSP quite nicely as they get to understand it better.
Senator Nancy Ruth: Does every bank and financial institution like yours go out and hustle those bars? How does that sales job work?
Ms. Bezaire: I like the ``hustle'' thing. We work with financial advisers. The will and estate lawyers are ``a centre of influence,'' because if you have a client like Mr. Marsh, you need to know some lawyers who can help their clients get their wills and powers of attorney done and set up trusts. It becomes a whole relationship, going back and forth. So when we are asked to go with a financial adviser to speak to some of the law firms, that's what we do, and we talk about the RDSP there.
Senator Black: I have a supplementary question. In respect of an excellent question that my colleague asked you, are you suggesting to us that there might be a possibility from your point of view that the respective provincial trustees could assume a role as trustees for these clients who do not have individuals to oversee their interests? Are you suggesting we could look at that?
Ms. Bezaire: Yes, I am. Community Living has specifically asked for that as well.
Senator Black: Wonderful. I wanted that on the record. Thank you.
The Chair: Thank you for that clarification.
Senator Massicotte: A slightly technical question: As you know, sometimes the life expectancy of some of these people is shorter than the average, and the issue was raised that maybe 70 years old is too long. I think somebody noted there is a provision that if you have a medical certificate suggesting that your life expectancy is less than five years, you can draw earlier.
Also, would another solution not be that, if life expectancy is less than 70, you can stop contributing, and 10 years afterwards you can start to withdraw? Is that not the case?
Ms. Dagneau: It is the case. The specified disability savings plan, which is the five-year provision you alluded to, but in that period, contributions are not allowed. So there are restrictions to applying to have that notation on the plan.
Senator Massicotte: But if you look at the purpose of the savings plan — I appreciate it's too complicated, but we want to ensure we don't have abuse of these people's money by third parties — but the purpose is for retirement. If you think you will not be with us in five to seven years, it is odd that you're contributing, because the purpose is to use this money eventually. There is a dichotomy of motivations here.
Ms. Dagneau: That contribution may come from another parent or grandparent such that the holder would approve that contribution to be made into the plan.
Senator Massicotte: Good point.
The Chair: That concludes our round 1. I have one senator who would like to ask a question in round 2.
Senator Ringuette: My question is to Mr. Marsh, because of his experience with income tax return filing. With regard to, for instance, the Ontario disability program, yesterday we heard that it was in the neighbourhood of $700 maximum a month, currently. Within that provincial program, is there a mechanism that would reduce the amounts paid from the Ontario program by the amounts that one would cash from the RDSP program? Did I explain myself correctly?
Mr. Marsh: Yes. My understanding is that the RDSP does not impact that program at all during the savings program of it. I would have to check to see, but I don't think it affects it on the withdrawal, but maybe Carol from Mackenzie would have further information on that.
Ms. Bezaire: Yes, the income and the assets for Ontario disability support are exempt.
Senator Ringuette: Currently, whatever income that a disabled person would get from the RDSP would not affect their potential income from the Ontario disability program?
Ms. Bezaire: That's correct.
The Chair: Thank you for that clarification, Senator Ringuette.
Senator Hervieux-Payette: I'm curious. When we did our study on the RSP, we saw that a limited number of people in Canada are benefiting from that income tax measure.
When it comes to children and adults in that program, first of all, I think it's probably .01 per cent of the population of Canada who would benefit from that. But within that population who would benefit from the RDSP, what's the picture with regard to children with disabilities and their parents putting away the money? Are the adults doing that themselves? Would you say that's 50-50, or is it more the parents or grandparents who are preparing for the future of their children? Or is it more the adults themselves who try to use and make use of that benefit?
Ms. Bezaire: From my experience, it's parents and grandparents who are putting the money in on behalf of someone. We have fewer people with disabilities who are participating in RSPs. I know a couple of lawyers; they have RSPs and opened an RDSP because they are legally blind, so they thought that's another way of saving.
But most families are using the RDSP for their child or grandchild.
Senator Hervieux-Payette: Mr. Marsh? Do you have any idea about those who are going through —
Mr. Marsh: I concur. In most instances, it's the parent who is opening the account on behalf of the child.
Senator Hervieux-Payette: I think that's valuable to know.
The Chair: Thank you, Ms. Bezaire, Ms. Dagneau, Mr. Marsh. You have been very helpful to our deliberations in preparing the report we are now undertaking. On behalf of all members of our Senate Banking Committee, I express our great appreciate for your participation today.
(The committee adjourned.)