https://www.cbc.ca/amp/1.4970490?cmp=rss&__twitter_impression=true
Millions of dollars owed to ordinary Canadians sits unclaimed in dormant bank accounts and terminated pension plans — and the federal Department of Finance is looking at fresh ways to tax some of that idle money and to reduce or eliminate any interest paid on it.
Proposals to significantly revamp the so-called "unclaimed balances" regime in Canada have undergone more than two years of consultations and review, and are now in the hands of department bureaucrats.
The goal is to modernize an archaic regime dating from the 1940s. The proposed changes also would save Ottawa money while modestly increasing federal revenues.
Each year, federally regulated banks and trust firms turn over to the Bank of Canada any money they find in accounts that have been inactive for a decade and are owned by people who can't be located.
As of Dec. 31, 2017, the central bank carried $742 million in these unclaimed balances. A central registry allows potential owners to search an online database, and about $10 million in claims are paid out each year.
The system dates from 1944, the year the federal cabinet also set the interest paid on interest-bearing unclaimed accounts at 1.5 per cent — a rate higher than the one currently paid on ordinary bank saving accounts.
The Bank of Canada holds the money for 30 years if the account balance is under $1,000, or for 100 years if it's more than $1,000. After the Bank of Canada releases the unclaimed cash, it goes into Ottawa's general revenues.
Finance Canada wants to cut or eliminate the interest paid on these balances. And small balances — those less than $100, which account for 70 per cent of all unclaimed balances — would be held for an as-yet unspecified period much shorter than 30 years before reverting to general revenues.
And the department wants to add dormant accounts in U.S. dollars and other foreign currencies — now excluded — to the mix.
Unclaimed pensions
Finance Canada also proposes expanding the regime to include unclaimed pension balances. There are more than 500 of these dormant accounts in federally regulated plans that have been terminated.
Many active pension plans also have dormant accounts. Bell Canada, for example, says about 3,000 of its more than 100,000 pension plan members are owed benefits but can't be located.
Dormant pension accounts eventually could be transferred to the Bank of Canada, where they would be included in a searchable online registry that lost owners could check, just as with unclaimed bank accounts.
Millions of dollars owed to ordinary Canadians sits unclaimed in dormant bank accounts and terminated pension plans — and the federal Department of Finance is looking at fresh ways to tax some of that idle money and to reduce or eliminate any interest paid on it.
Proposals to significantly revamp the so-called "unclaimed balances" regime in Canada have undergone more than two years of consultations and review, and are now in the hands of department bureaucrats.
The goal is to modernize an archaic regime dating from the 1940s. The proposed changes also would save Ottawa money while modestly increasing federal revenues.
Each year, federally regulated banks and trust firms turn over to the Bank of Canada any money they find in accounts that have been inactive for a decade and are owned by people who can't be located.
As of Dec. 31, 2017, the central bank carried $742 million in these unclaimed balances. A central registry allows potential owners to search an online database, and about $10 million in claims are paid out each year.
The system dates from 1944, the year the federal cabinet also set the interest paid on interest-bearing unclaimed accounts at 1.5 per cent — a rate higher than the one currently paid on ordinary bank saving accounts.
The Bank of Canada holds the money for 30 years if the account balance is under $1,000, or for 100 years if it's more than $1,000. After the Bank of Canada releases the unclaimed cash, it goes into Ottawa's general revenues.
Finance Canada wants to cut or eliminate the interest paid on these balances. And small balances — those less than $100, which account for 70 per cent of all unclaimed balances — would be held for an as-yet unspecified period much shorter than 30 years before reverting to general revenues.
And the department wants to add dormant accounts in U.S. dollars and other foreign currencies — now excluded — to the mix.
Unclaimed pensions
Finance Canada also proposes expanding the regime to include unclaimed pension balances. There are more than 500 of these dormant accounts in federally regulated plans that have been terminated.
Many active pension plans also have dormant accounts. Bell Canada, for example, says about 3,000 of its more than 100,000 pension plan members are owed benefits but can't be located.
Dormant pension accounts eventually could be transferred to the Bank of Canada, where they would be included in a searchable online registry that lost owners could check, just as with unclaimed bank accounts.
