The Canadian Life and Health Insurance Association (CLHIA) is making several recommendations to the Ministry of Finance in Alberta, ahead of the release of that province’s 2023 budget. “The CLHIA believes that these recommendations will help support the Albertan economy as the province faces added pressures from higher inflation and recent natural events,” they write.
The 2023 Provincial Budget Submission discusses the COVID-19 pandemic saying in 2021 the industry added 5,200 jobs across the country, including 1,000 in Alberta, as its members shifted to remote work and as Canadians made increased use of the health benefits. It further discusses the development of dental care, pharmacare and rare disease strategies occurring at the federal level. “This is work of interest to the government of Alberta, as the province has its own programs,” they write. “Collaboration with our sector and the province is essential.”
They advocate for new programs to expand dental care coverage, but with eligibility criteria targeting those without existing coverage through workplace plans. “The program should not result in fewer Canadians accessing dental benefits through their workplace plans,” they write.
In pensions, the association further lobbies for the government to explicitly allow employers to deduct employee contributions to plans automatically. It also addresses Variable Payment Life Annuities (VPLAs), allowed by the federal government in 2021.
“The CLHIA continues to believe the VPLA legislation, as enacted, would only enable a select minority of Canadians participating in defined contribution registered pension plans (DC plans) or pooled registered pension plans (PRPPs), which is an issue, as we estimate it requires at least 10,000 plus active members to provide the scale for a stable VPLA solution,” the submission states. “The current measures do not take into consideration many other retirees who are members of smaller DC or PRPP plans that lack scale for a standalone VPLA solution.” It goes on to encourage Alberta to monitor and parallel federal measures to introduce new retirement income options, and to encourage the federal government to permit standalone VPLAs.
The submission also encourages the government to leverage the industry’s investment capacity in infrastructure projects.
Notably, it concludes with a discussion about premium taxes – Alberta currently imposes a three per cent tax on life, health and disability insurance premiums. These taxes totalled more than $203 in 2021, according to the association.
“The premium tax is outdated – it predates corporate income taxes and imposes a supplemental tax burden five times the $42 million in corporate income taxes levied on life and health insurance companies in Alberta in 2021. Canada’s life and health insurers oppose any form of consumption tax on insurance premiums,” they write. “An aging population and escalating health care costs are increasing Alberta residents' need for income security and supplementary health care. We believe that discouraging individual responsibility for these benefits by taxing the purchase of insurance coverage is not sound public policy.”
