Did I read this right, Re: Foreign content

[Sylvanfan]

Did the federal budget delivered on Wednesday immediately remove the 30% limit for foreign content in RRSP's? Can I sell off all my Canadian investments and have a 100% foreign portfolio as my RRSP if I so choose? It just seems a bit strange to me that the one tax break out there for most Canadians would not have strings like having to turn around and put 50% of that money back into Canadian bussinesses. I haven't really done much with my RRSP contribution yet this year, but I'll definitely have to find some good professional advice if this is the case as it appears I have a lot more options now to chase down that ellusive 12% annual return!!

[albertGQ]

Yes, you read correct. The 30% foreign content maximum has been eliminated.

This will result in more diversified portfolios

[Cowperson]

I believe the new rules don't go into effect until the legislation is passed so you might still run into foreign content tax penalties if you are over 30% before then.

Cowperson

[Mccree]

It needs to pass in the house and is for the 2005 tax year. Any RRSP contributions made for the 2004 tax year will follow the old rules so I would be careful as the penalities are quite huge.

[Mike F]

As Mccree said, the change will be effective January 2005.

For anyone who wants to read a fairly thorough analysis of the budget here is Stikeman's Commentary

[Lurch]

This has almost no impact - you can already hold things like an S&P 500 Index Fund that is considered 100% Canadian content. Just the official death to a restriction that did not impact you anyway.