Budget Responds to Global Financial Crisis and Economic Slowdown

    OTTAWA, Jan. 27 /CNW/ - Canada's economic performance has faltered in the
wake of a financial crisis that has engulfed global capital markets. The
Investment Industry Association of Canada (IIAC) supports the announced budget
initiatives that provide short-term support to individual Canadians and
businesses, facilitate the flow of credit through the capital markets, and lay
the foundation for recovery.
    The federal stimulus package, in line with the magnitude of actions taken
in other industrial countries, will result in a $34 billion deficit for the
fiscal year 2009-10 and $30 billion the following year. "While this budget
marks a return to deficit financing, it is a temporary fiscal strategy to
offset the impact of the global slowdown. Moreover, unlike the years of
similar deficits in the first half of the 1990s, public finances are in far
better shape to absorb the increased debt load," said Ian Russell, President
and CEO, IIAC.
    The Investment Industry Association supports the measures to improve the
functioning of capital markets to stimulate credit flows to the real economy.
"Measures such as an additional $50 billion to the Insured Mortgage Purchase
Program and the establishment of a credit facility to purchase asset-backed
securities will bolster liquidity and encourage increased lending," said Ian
Russell. Additionally, the IIAC is pleased the government has announced a
transition plan for a Canadian Securities Regulator. A single securities
regulator will improve the efficiency of capital markets and facilitate needed
reforms to protect against systemic risks in financial markets.
    Steps taken to provide tax relief to individual Canadians are welcomed.
However, the IIAC is disappointed the budget has not lowered taxes on capital
gains to stimulate savings and investment in the economy, nor introduced
needed reform of the RRSP and RRIF programs to rebuild retirement savings
devastated by the recent market collapse.

    The Investment Industry Association of Canada (IIAC) advances the
position of the Canadian investment industry on regulatory and public policy
issues. As the professional association for the industry, IIAC has a mandate
to promote efficient, fair and competitive capital markets for Canada while
helping its member firms across the country succeed in the industry.

For further information:

For further information: Katie O'Dell, Public Affairs Consultant, Tel.
(416) 687-5478, Cell (416) 312-7275, kodell@iiac.ca

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Investment Industry Association of Canada (IIAC)

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