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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: jmanvegas who wrote (2937)	12/14/1999 5:15:00 PM
From: blaireo1	Respond to of 24042

*OT** This has been brought up several times over the years on this thread. canoe.ca Money News Let Canadian investors go, C.D. Howe urges TORONTO (CP) -- There is no point in phasing out the 20 per cent limit on foreign holdings in pension funds and RRSPs -- it should be scrapped immediately, the C.D. Howe Institute urges. ÿÿThe tax of one per cent a month on foreign assets over the limit amounts to "regulation without reason," University of Western Ontario economists Joel Fried and Ron Wirick argue in a commentary for the business think-tank. ÿÿThey say the 28-year-old foreign property rule lowers returns and increases risks for Canadians saving for retirement. ÿÿThe effect, they calculate, is to cut retirement incomes by 6.3 to 12.9 per cent a year, and this "discourages work by lowering its rewards." ÿÿFried and Wirick also see little evidence that the foreign content limit provides any benefit in the form of lower costs for Canadian users of capital. And they say its negative impact on retirement incomes will reduce tax revenue in the future. ÿÿThe study notes that there are ways to circumvent the rule -- for instance, through mutual funds that use Canadian derivatives to mirror foreign portfolios -- but "these measures involve a cost of their own." ÿÿAbolishing the limit would be painless, Fried and Wirick contend. ÿÿ"No major groups -- workers, governments, firms or the financial industry, gain economically from the foreign property rule," they say, and "investors' tendency to favour investment in their own countries would likely limit the size of portfolio shifts in the short term." ÿÿBut the argument against the foreign content limit isn't that cut-and-dried, Canadian Auto Workers union economist Jim Stanford said after the C.D. Howe study was released. ÿÿ"These tax-sheltered plans are receiving a very important subsidy from the Canadian taxpayers, one that costs both levels of government something like $30 billion a year now, so it seems reasonable in return for that kind of subsidy to say you should invest the money in Canada," Stanford said in an interview. ÿÿ"Secondly, in times of international financial turbulence, that 20 per cent rule can be an important stabilizing factor. I would argue it was very important in the summer of '98 when the loonie was under pressure and many investors were leaving Canada. Theoretically, 80 per cent of the money in some of the largest investment vehicles in the country had to stay